Question 1

The battle of the forms takes place between a merchant and a nonmerchant.

Accepted Answer

The battle of the forms refers to a situation in contract law where two parties, typically both merchants, exchange documents (like purchase orders and invoices) with differing terms, leading to a conflict over which terms control the agreement.

Question 2

A ________ is a document that is issued by a bank on behalf of a buyer who purchases goods on credit from a seller that guarantees that if the buyer does not pay for the goods, then the bank will pay the seller.
A) remittance advice
B) certified check
C) cashier's check
D) letter of credit

Accepted Answer

A letter of credit is a document issued by a bank on behalf of a buyer that guarantees payment to the seller if the buyer does not pay. It is often used in international trade to reduce risk for both parties involved. A remittance advice is a document that accompanies a payment and provides details of the payment. A certified check and a cashier's check are both types of checks that provide guaranteed payment, but they are not specifically used in the context of purchasing goods on credit.

Question 3

Course of performance between the parties is taken into account when the express terms of their written contract are not clear.

Accepted Answer

If the express terms of a written contract are unclear, the course of performance between the parties can be used as evidence of their intentions and may be taken into account to interpret the contract. This is consistent with the principle of contract interpretation that looks at the parties' objective intentions and the context in which they made their agreement.

Question 4

The battle of the forms occurs when the offeror receives an acceptance drafted from the offeree's own form contract.

Accepted Answer

The battle of the forms refers to a situation where both parties attempt to include their own preferred terms and conditions into a contract during the negotiation process. It commonly occurs in situations where the offeree responds with an acceptance that departs from the terms originally offered by the offeror and includes additional or different terms on the offeree's own form contract.

Question 5

A computer program or an electronic or other automated means used independently to initiate an action or respond to electronic records or performances in whole or in part, without review or action by an individual, is known as ________.
A) electronic agent
B) electronic record
C) digital mapper
D) automation

Accepted Answer

An electronic agent is a computer program or an electronic or other automated means used independently to initiate an action or respond to electronic records or performances in whole or in part, without review or action by an individual.

Question 6

Under the common law, a written contract must be signed by the party against whom enforcement is sought.

Accepted Answer

Under the common law, specifically the Statute of Frauds, certain types of contracts must be in writing and signed by the party against whom enforcement is sought to be legally enforceable. This includes contracts for the sale of goods over a certain value, real estate transactions, and contracts that cannot be performed within one year.

Question 7

A sales contract evidenced by writing cannot be contradicted by a prior oral or written agreement.

Accepted Answer

This statement follows the "parol evidence rule," which provides that a written contract is the final and complete expression of the parties' agreement, and prior or contemporaneous oral or written statements cannot be used to contradict its terms.

Question 8

The ________ requires all contracts for the sale of goods costing $500 or more and lease contracts involving payments of $1,000 or more to be in writing.
A) parol evidence rule
B) gap-filling rule
C) firm offer rule
D) Statute of Frauds

Accepted Answer

The Statute of Frauds requires certain contracts, such as sales and lease contracts, to be in writing if they meet certain dollar thresholds ($500 for sales contracts and $1,000 for lease contracts). The parol evidence rule limits the use of oral or written statements outside of a written contract to interpret or change the terms of the contract. The gap-filling rule is a default rule used when a contract does not provide sufficient detail on a particular issue. The firm offer rule applies only to offers for the sale of goods under the Uniform Commercial Code.

Question 9

Article 2(A) of the Uniform Commercial code requires that all lease contracts requiring payments of $500 or more must be in writing.

Accepted Answer

Article 2 of the Uniform Commercial Code (UCC) deals with the sale of goods and requires that contracts for the sale of goods priced at $500 or more be in writing to be enforceable. However, it is Article 2A that deals specifically with leases of personal property, and the threshold for requiring a written lease can vary.

Question 10

Miranda Airways, a commercial air carrier, has a contract with Wurtherton Inc., an airplane manufacturer, to purchase a new plane. Due to a sudden shortage of cash, Miranda Airways goes to MetrosBank. MetrosBank issues a document to Wurtherton that if Miranda does not pay for the transaction, MetrosBank would. Wurtherton considers the offer and then sends an acceptance with additional terms. The additional terms stipulate that Miranda Airways could have the new airplane for a period of 10 years and then return it to Wurtherton. Miranda Airways agrees to the acceptance, and Wurtherton hands over the new airplane to them. Which of the following documents did MetrosBank issue to Wurtherton to help Miranda Airways secure the airplane?
A) a bill of exchange
B) a proforma invoice
C) a letter of credit
D) a remittance advice

Accepted Answer

MetrosBank issued a letter of credit which ensured that if Miranda Airways was unable to pay for the transaction, the bank would cover the costs. This document helped Miranda Airways secure the airplane from Wurtherton.

Question 11

Article 2 of the Uniform Commercial code requires that all contracts for the sale of goods priced at $500 or more must be in writing.

Accepted Answer

Article 2 of the Uniform Commercial code does require that all contracts for the sale of goods priced at $500 or more must be in writing.

Question 12

E-signature is the signature of a person that appears on an electronic record but is not recognized as a lawful signature.

Accepted Answer

E-signature is recognized as a lawful signature in many jurisdictions around the world, including the United States, European Union, and many Asian countries. It is governed by various laws and regulations, such as the Electronic Signatures in Global and National Commerce Act (ESIGN) in the US and the eIDAS Regulation in the EU, which have established the legal validity and enforceability of electronic signatures.

Question 13

Article 5 of the Uniform Commercial Code governs ________.
A) sales of intangible goods
B) finance leases
C) letters of credit
D) general provisions

Accepted Answer

Article 5 of the Uniform Commercial Code (UCC) specifically governs letters of credit, which are used in commercial transactions to assure payment.

Question 14

Mirror image rule is more liberal than UCC 2-207(1).

Accepted Answer

The mirror image rule is stricter than UCC 2-207(1). The mirror image rule requires that the acceptance must exactly match the offer, with any changes considered a counteroffer. On the other hand, UCC 2-207(1) allows for a contract to be formed even if the acceptance contains additional or different terms from the original offer, as long as the acceptance does not expressly make acceptance conditional on the additional or different terms.

Question 15

What are the methods and manners of acceptance as defined by the Uniform Commercial Code (UCC)?

Accepted Answer

The answer of What are the methods and manners of...

Question 16

The written confirmation rule requires that both parties to an oral agreement send written confirmation of the sale or lease.

Accepted Answer

The written confirmation rule only applies to agreements for the sale of goods over $500, as specified in the Statute of Frauds. It does not apply to leases or all types of agreements. Additionally, the rule only requires one party to send the written confirmation, not both.

Question 17

In which of the following situations involving oral contracts can the Statute of Frauds be raised?
A) if a written confirmation has not been objected by a party in an oral agreement
B) if the seller of specially manufactured goods has made a commitment for their procurement
C) if the party against whom enforcement of an oral contract is sought has not admitted of such a contract in pleadings in court
D) when a contract that requires written confirmation has been agreed-on orally

Accepted Answer

The Statute of Frauds applies to contracts that require written confirmation, and can be raised in situations where such a contract has been agreed-upon orally. Options A, B, and C do not necessarily involve contracts that require written confirmation and therefore cannot be used to raise the Statute of Frauds.

Question 18

Shipment of the original offer to a buyer is called accommodation.

Accepted Answer

Accommodation refers to making special concessions or adjustments to meet the needs or preferences of a buyer, and is not related to the shipment of the original offer.

Question 19

In which of the following can the Statute of Frauds be raised under the common law of contract?
A) when a seller of specially manufactured goods has made commitments for the procurement for an oral agreement
B) when the party against whom enforcement of an oral sales or lease contract is sought admits to such a contract in court
C) when the writing must be signed by the party against whom enforcement is sought
D) when there has been no written confirmation of a contract between two merchants

Accepted Answer

The Statute of Frauds requires certain contracts to be in writing to be enforceable. One of the requirements is that the writing must be signed by the party against whom enforcement is sought (option C). Option A involves specially manufactured goods, which fall under a different exception to the Statute of Frauds. Option B is incorrect because admitting to a contract in court does not negate the requirement for a written agreement under the Statute of Frauds. Option D relates to the requirement for written confirmation between merchants, which is a different provision under the Uniform Commercial Code.

Question 20

Option contracts are examples of irrevocable offers.

Accepted Answer

Option contracts are binding agreements between two parties, and once the terms are agreed upon and the contract is executed, it cannot be revoked by either party. Therefore, option contracts are examples of irrevocable offers.

Quiz 18: Formation of Sales and Lease Contracts

The battle of the forms takes place between a merchant and a nonmerchant.

A ________ is a document that is issued by a bank on behalf of a buyer who purchases goods on credit from a seller that guarantees that if the buyer does not pay for the goods, then the bank will pay the seller.