Question 1

Fresh Produce, Inc., and Great Grocery Stores dispute the interpretation of an ambiguous phrase in their contract. In a suit between the parties to con?strue the contract, a court may accept evidence of

Accepted Answer

The answer of Fresh Produce, Inc., and Great Grocery Stores...

Question 2

Community Construction Corporation offers to buy from Solid Cement Company a certain quantity of cement for a certain price. Solid can ac?cept the offer by

Accepted Answer

Solid Cement Company can accept the offer by either promising to ship or promptly shipping the cement. A promise to ship alone would not be sufficient as it does not constitute acceptance of the offer. Doing nothing or promptly shipping the cement without prior communication with Community Construction Corporation would not be considered a clear acceptance of the offer.

Question 3

Quinn enters into a series of agreements with Reba involving a sale of a Suite Dreams Motel, including the land, building, furnishings, shares of stock in Suite Dreams Company, and a contract with Trudy to create an ad campaign. Reba suspects that Quinn may be misrepresenting the facts. The UCC Statute of Frauds governs

Accepted Answer

The UCC Statute of Frauds specifically applies to the sale of goods, and furnishings priced at $500 or more would fall under this category as goods. The UCC does not apply to real estate transactions or services, such as the sale of land, buildings, or marketing services.

Question 4

Grace purchases three tons of fine merino wool on behalf of Woolen Creations. Woolen Creations wants the wool to remain in the warehouse where it is being stored until it is needed. Grace makes an offer for the wool on Monday. The offer is accepted on Tuesday. The warehouser gives Woolen Creations a warehouse receipt on Wednesday. Woolen Creations picks up the wool from the warehouse three months after the sale. Title for the wool passed to Woolen creations

Accepted Answer

Title for the wool passed to Woolen Creations when they were given the warehouse receipt on Wednesday. This is because a warehouse receipt is a document of title and represents ownership of the goods stored in the warehouse. Therefore, Woolen Creations had legal title to the wool when they received the warehouse receipt on Wednesday, even though they did not physically possess the wool until three months later.

Question 5

Mountaineer Sales, Inc., is the offeror and Camping Goods Corporation is the offeree under a unilateral sales contract in which Forest Recreation Products Company is also interested. Mountaineer is not notified of Camping's performance within a rea?son?able time. Mountaineer

Accepted Answer

If Mountaineer is not notified of Camping's performance within a reasonable time, Mountaineer may treat the offer as having lapsed. This means that Camping's failure to notify Mountaineer of performance effectively terminates the offer.

Question 6

Raul agrees to ship to Ben one hundred ceil?ing fans for $5,000. Raul ini?tials his notes of the deal, which in?clude the terms, and files the notes in his office. Ben initials his own notes of the deal, which include the terms, and files the notes in his office. Raul fails to ship the fans. Against Raul, as a contract, the deal is

Accepted Answer

The deal is enforceable because Raul's initialed notes are a sufficient writing under the UCC's statute of frauds, which requires a writing signed by the party to be charged. Ben's notes also serve as additional evidence of the agreement.

Question 7

Jackson owns an antiques store. He sells a grand piano to Fred for $5,000, a old jukebox to Sam for $499, an antebellum chest of drawers to Josephine for $659 and a gold ring to Wendy for $999. Which of Jackson's sales must be in writing to be enforceable?

Accepted Answer

The answer of Jackson owns an antiques store. He sells...

Question 8

Jason contracts with Golf Carts Unlimited, Inc. to buy five golf carts. The contract lists the five carts as GC001, GC002, GC003, GC004, GC005. Identification

Accepted Answer

The identification of the subject matter (the five golf carts) has already taken place by listing them as GC001, GC002, GC003, GC004, and GC005 in the contract.

Question 9

Nature's Products, Inc., sends its standard order form to Interbusiness Distribution Corporation (IDC) to evidence a sale of packing materials. IDC responds with its own standard purchase order form. Additional terms in the purchase order automatically become part of the contract unless

Accepted Answer

The answer of Nature's Products, Inc., sends its standard order...

Question 10

Big Beef, Inc. raises calves to sell. Big Beef breeds its cows in April, and the cows calve in February of the following year. In January Andrea contracts with Big Beef to buy fifty calves. Identification takes place in

Accepted Answer

The answer of Big Beef, Inc. raises calves to sell....

Question 11

Bill orders 1,000 nails from Super Hardware, Inc. Super Hardware keeps its nails in packages of 100,000. Bill and the agent for Super Hardware both sign the contract for the sale of the nails on Monday. The agent separates 1,000 nails on Wednesday. The agent delivers the nails to Bill on Thursday morning, and Bill pays for the nails on Friday. Identification of the nails took place on

Accepted Answer

The answer of Bill orders 1,000 nails from Super Hardware,...

Question 12

A contract between Fresh Fruit Corporation and Green Grocer, Inc., re?quires Fresh Fruit to deliver goods to Green Grocer's place of business. This is

Accepted Answer

A destination contract is a type of contract where the seller is responsible for delivering the goods to a specific destination, often the buyer's place of business. This is in contrast to a shipment contract where the seller is responsible for delivering the goods to a carrier for transport to the buyer's location. In this scenario, Fresh Fruit Corporation is responsible for delivering the goods to Green Grocer's place of business, indicating a destination contract.

Question 13

Perfect Potato Chip Company makes an offer that Snack Foods Corporation would like to accept. Under the "mirror image rule" relating to offer and acceptance, an acceptance

Accepted Answer

The "mirror image rule" requires that acceptance must mirror the terms of the offer. This means that an acceptance cannot include additional terms or conditions not contained in the original offer. If the acceptance includes any additional terms, it will be considered a counteroffer, and the initial offer will be terminated. Therefore, choice C is correct.

Question 14

Megan, an agent for a department store, orders one hundred dresses from Sal's Clothing Shop for the Spring Blossom Sale. There is no specific agreement in the sale contract indicating when title will pass to the department store. The title will pass to the department store when

Accepted Answer

The passing of title is determined by the Uniform Commercial Code (UCC), which states that unless otherwise specified in the contract, title passes to the buyer (the department store in this case) at the time and place the seller (Sal's Clothing Shop) delivers the goods to the buyer. Therefore, the correct answer is C, when Sal's Clothing Shop physically delivers the dresses to the department store.

Question 15

Gail enters into a contract with Hi-Price Appliances, Inc. In a suit be?tween the parties over payment under the contract, Gail claims that a certain clause is unconscionable. If the court agrees, it may

Accepted Answer

If the court determines that a clause in a contract is unconscionable, it may choose to enforce the rest of the contract while limiting or refusing to enforce the disputed clause. This allows for the parties to still have a valid contract while addressing the unfairness of the unconscionable clause. Therefore, option A is the correct choice.

Question 16

Rita, the manager of the State University (SU) soccer team, orally agrees to lease a certain number of specially made SU banners from Top Banners, Inc. This lease is enforceable only if Top has made a substan?tial start on making the banners and

Accepted Answer

The answer of Rita, the manager of the State University...

Question 17

Peter, an agent for Zippy Cars, Inc., writes a letter to Cassandra on March 1 stating that he will sell her a 2011 Suburu Outback for $20,000 between March 1 and April 30. Peter's letter to Cassandra is

Accepted Answer

Peter's letter to Cassandra constitutes a firm offer because it is a definite promise to sell a specific product for a specific price within a specific time frame. The offer is clear and definite enough that Cassandra can accept it simply by meeting the stated conditions. This offer does not need any further negotiation or acceptance to create a binding contract between Peter and Cassandra.

Question 18

Trend-Rite Clothiers, Inc., sells t-shirts to Brand Name Stores, Inc., under an existing con?tract. When textile costs increase, Brand agrees to a price increase, but later wants to cancel the con?tract. Brand may

Accepted Answer

The answer of Trend-Rite Clothiers, Inc., sells t-shirts to Brand...

Question 19

Big Red Drinks, Inc. contracts to buy two tons of cranberries from Super Fruits, Inc. The contract states that Super Fruits is required to ship the cranberries to Big Red Drinks by Speedy Wind Air Freight. The contract is

Accepted Answer

The contract between Big Red Drinks, Inc. and Super Fruits, Inc. is a shipment contract since it specifies that Super Fruits is responsible for shipping the two tons of cranberries to Big Red Drinks. In a shipment contract, the seller is responsible for delivering the goods to the carrier, but the buyer assumes the risk of loss or damage during transportation.

Question 20

Equipment Rental Corporation and Floodlights, Inc., are parties to an oral agreement for a lease of goods with payments in excess of $10,000. They may satisfy the Statute of Frauds by

Accepted Answer

Under the Statute of Frauds, agreements for leases of goods with payments in excess of $10,000 must be in writing. While handshakes and verbal agreements are not enough to satisfy this requirement, setting out the terms of the agreement in an email would satisfy the statute because it is a form of writing.

Quiz 10: Sales and Lease Contracts