Deck 14: Sales and Lease Contracts

Question 1

Under the UCC,if a contract for a sale of goods does not specify the quantity,a court will objectively determine what is a reasonable quantity.

Answer 1

False

Question 2

Unless the parties agree otherwise,the buyer or lessee has an absolute right to inspect the goods before making payment.

Answer 2

True

Question 3

Under the UCC,an oral contract for a sale of goods is enforceable if goods have been received and accepted.

Answer 3

True

Question 4

When a document of title is required,title passes to a buyer when and where the document is delivered.

Question 5

The UCC requires that the mirror image rule be followed for all acceptances.

Question 6

Even if goods are not identified to the contract,the title and risk of loss can still pass from the seller to the buyer.

Question 7

A lessor is a party who transfers the right to the possession and use of goods under a lease.

Question 8

The UCC requires a contract modification to be supported by new consideration.

Question 9

Intangible property has conceptual existence and thus comes under Article 2.

Question 10

When no delivery terms are specified in a contract for a sale of goods,there is no basis for determining a remedy.

Question 11

To be characterized as a "good" under the UCC,an item of property must be movable.

Question 12

The UCC imposes some different rules on merchants.

Question 13

When a buyer breaches a contract,the risk of loss immediately shifts to the buyer.

Question 14

In most situations involving sales,rights and liabilities are determined by who has the title to the goods.

Question 15

When the risk of loss for goods passes from a seller to a buyer is generally determined by the contract between the parties.

Question 16

A seller has an insurable interest in goods as long as the goods are in existence.

Question 17

Under the UCC,an offeree can accept an offer to buy goods only by a promise to ship conforming goods.

Question 18

The risk of loss in a shipment contract passes to the buyer when the goods are delivered to the buyer at the specified destination.

Question 19

Under the UCC,parties to sales and lease contracts are free to establish whatever terms they wish.

Question 20

The seller's or lessor's major obligation under a sales contract is to tender conforming goods to the buyer or lessee.

Question 21

Unlike the UCC,the United Nations Convention on Contracts for the International Sale of Goods does not apply to consumer sales.

Question 22

Lucy owns a condominium that she leases to Marie,gives her son Neal $450 on his sixteenth birthday,and sells her car to her neighbor Odalles for $1,500.UCC Article 2 covers

A)the lease with Marie.
B)the gift to Neal.
C)the sale to Odalles.
D)all of the choices.

Question 23

Leslie pays Mobile Electronics $600 for a new phone.Under the UCC,this is​

A)a merchant's firm offer.
B)a lease.
C)a sale.
D)a requirements contract.

Question 24

To be merchantable,goods must be at least average,fair,or medium-grade quality.

Question 25

The seller's right to cure does not affect the right of the buyer or lessee to reject goods.

Question 26

Refined Grains,Inc. ,agrees to sell to Sunny Cereal Company a certain quantity of refined oats each week but no mention is made of where the goods are to be delivered.In general,the UCC requires that the delivery take place at​

A)a neutral place of business halfway between the parties' locations.
B)a "reasonable" place of delivery.
C)Refined's place of business.
D)Sunny's place of business.

Question 27

When a seller refuses to deliver goods that are unique,a buyer can obtain specific performance.

Question 28

Only a statement made after a contract is entered into can be an express warranty.

Question 29

If a buyer breaches a contract,the seller can simply cancel the contract.

Question 30

Under the UCC,a seller's tender of goods that do not conform in every way to a contract is still a valid tender.

Question 31

Real Gear Corporation enters into a contract to sell ski equipment to Sno-Sports Inc. ,which sells a pair of the skis to Tyra,a consumer,who later sells them to Upton,another consumer.Article 2 of the UCC applies to the sales transactions between​

A)all of the buyers and sellers.
B)Real Gear and Sno-Sports only.
C)Sno-Sports and Tyra only.
D)Tyra and Upton only.

Question 32

Revocation of acceptance is effective on notice to the seller or lessor.

Question 33

The doctrine of commercial impracticability only extends to problems that are foreseen.

Question 34

In the absence of any specific agreements,the buyer or lessee must make payment after receipt of the goods.

Question 35

The United Nations Convention on Contracts for the International Sale of Goods provides international sellers and buyers with remedies similar to those available under the UCC.

Question 36

A warranty against infringement is a promise by the seller that the product is free from any patent,trademark,or copyright claims of a third person.

Question 37

If a buyer repudiates a contract,the seller can bring an action to recover damages.

Question 38

Acceptance of goods precludes the buyer or lessee from exercising the right of rejection.

Question 39

Medico Inc.enters into a contract to sell medical supplies to New Hospital Corporation,which sells some of the items to Physicians Clinic,which later sells them to Oscar,a patient and consumer.Article 2 of the UCC applies to the sales transactions between​

A)all buyers and sellers.
B)Medico and New Hospital only.
C)New Hospital and Physicians Clinic only.
D)Physicians Clinic and Oscar only.

Question 40

A warranty of title does not arise automatically under a contract for a sale of goods.

Question 41

A contract between Fruit of the Valley Corporation and Green Grocer,Inc. ,requires Fruit to deliver goods to Green's place of business.This is​

A)a bill of lading.
B)a destination contract.
C)a shipment contract.
D)a warehouse receipt.

Question 42

Talk,Inc. ,offers to buy from Ultra Corporation 1,000 phones.Without notifying Talk,Ultra timely ships phones of a different quality.With respect to the offer and a possible contract,this shipment is an acceptance and​

A)a breach.
B)an accommodation.
C)complete performance.
D)a cure.

Question 43

Roofing Company buys asphalt tiles from Shingles,Inc.The parties agree that the tile will be shipped "F.O.B.Shingles warehouse" to Roofing's location via Shipping Corporation.The tiles are lost in transit.The loss is suffered by​

A)Shipping Corporation.
B)Shingles,Inc.
C)Roofing Company.
D)Roofing's customers by an increase in the prices of goods and services.

Question 44

Dian,an agent for Expo Motors,Inc. ,writes a letter to Flynn on November 1 stating that she will sell him a 217 Subaru Outback for $25,000 between November 1 and December 31.Dian's letter to Flynn is​

A)a merchant's firm offer.
B)an acceptance.
C)an option contract.
D)none of the choices.

Question 45

Global Outfitters Outlet and Holly,a consumer,enter into a contract for a sale of camping gear.If the contract includes a clause that is perceived as grossly unfair to Holly,its enforcement may be challenged under​

A)the mirror image rule.
B)the principle of fair trade.
C)the predominant-factor test.
D)the doctrine of unconscionability.

Question 46

Confections Corporation orders Delicious-brand Chocolate Bars from Edibles Company.Edibles identifies the goods.Before they are shipped,an insurable interest in the goods exists in​

A)Confections only.
B)Edibles only.
C)both Confections and Edibles.
D)Delicious only.

Question 47

Fresh Milk,Inc. ,is the offeror and Guernsey Dairy Farm is the offeree under a unilateral sales contract.Fresh is not notified of Guernsey's performance within a reasonable time.Fresh​

A)may treat the offer as having lapsed.
B)must assume that Guernsey has started to perform.
C)must contact Guernsey.
D)must assume that Guernsey has rejected the offer.

Question 48

Pine Mills Inc.and Quality Lumber Company enter into a contract for a sale of plywood to be delivered under a destination contract.This contract requires Pine Mills,the seller,to​

A)allow the buyer to reject the goods for any reason.
B)deliver the goods to a particular destination.
C)inspect the goods before tendering their delivery.
D)place the goods into the hands of a carrier.

Question 49

Pavers Inc.contracts to buy some heavy equipment from Earthmovers,Inc.Before either party performs,Earthmovers sells its assets to Excavation Corporation.On learning of the sale,Pavers is concerned about its contract with Earthmovers.Pavers should​

A)demand assurances of performance from the seller.
B)consider the contract repudiated and sue the seller for breach.
C)buy the equipment from a different firm and bill the seller for the price.
D)buy the equipment from a different firm and bill Excavation for the price.

Question 50

ABC Toy Store orders one hundred board games from Big Board Games Inc.When the games are delivered,they are all missing pieces.ABC rejects the shipment.To cure,Big Board must​

A)promptly notify ABC of the intent to cure.
B)pay a cure fee.
C)pick up the nonconforming games before the end of the business day.
D)enter into a new contract with ABC.

Question 51

Minerals Ltd.contracts to provide several manufacturers with tin.When a cartel of tin-producing countries suddenly embargoes future shipments of tin to Minerals so that it cannot fulfill its contracts,the distributor​

A)can substitute some other material for the tin.
B)is excused from the performance of its contracts.
C)is liable for breach of contract.
D)must still supply the tin needs of its customers.

Question 52

Quest Outdoor Store orders RiverRun-brand kayaks from Sports Merchandise,Inc.Sports Merchandise mistakenly ships kayaks of the wrong size,which Quest rejects and returns via Trans-State Shipping Company.During the return,the kayaks are lost.The loss is suffered by​

A)Quest .
B)Trans-State.
C)RiverRun.
D)Sports Merchandise.

Question 53

Elegant Carpets,Inc. ,and Fantastic Floors Stores enter into a contract for a sale of carpeting to be delivered under a shipment contract.This contract requires Elegant Carpets,the seller,to​

A)allow the buyer to reject the goods for any reason.
B)deliver the goods to a particular destination.
C)inspect the goods before shipping them.
D)place the goods into the hands of a carrier.

Question 54

Business Rental Corporation (BRC)and Cartage Trucking Company enter into a contract for a lease of ten hydraulic lifts.Under the perfect tender rule,BRC must ship or tender goods to the lessee that​

A)approximately conform to the contract description.
B)entirely conform to the contract description except in one or two details.
C)conform to the contract description in every way.
D)substantially conform to the contract description in most details.

Question 55

Household Products Corporation sells Ideal-brand vacuum cleaners to Jolly Discount Stores and other retailers.Household will have an insurable interest in the cleaners as long as​

A)Household remains in business.
B)Household retains title to the goods.
C)the goods are in existence.
D)there is no risk of loss.

Question 56

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 covers​

A)the sale of any of the property evidenced by a writing.
B)the entire deal,including the marketer's services.
C)the sale of the furnishings priced at $500 or more.
D)the sale of the land and the building.

Question 57

Equipment Rentals Corporation (ERC)agrees to lease two backhoes to Dig & Fill Construction,Inc.Before any interest in the backhoes can pass from ERC to Dig & Fill,they must be​

A)in existence and identified as the goods in the contract.
B)in ERC's physical possession.
C)in Dig & Fill's physical possession.
D)listed in a document of title and filed in the appropriate state office.

Question 58

Clean Mouth Clinic offers to buy from Dental Supplies Company a certain quantity of floss and other items for a certain price.Dental can accept the offer by​

A)a material alteration of the terms within a reasonable time.
B)a promise to ship or a prompt shipment of the goods.
C)a prompt shipment of the goods only.
D)a shipment of nonconforming goods with a notice of accommodation.

Question 59

Swift Trucking,Inc. ,and Trailer Rents Corporation are parties to an oral agreement for a one-year lease of six doublewides with payments totaling more than $40,000.They may satisfy the Statute of Frauds by​

A)mutually agreeing not to commit fraud.
B)repeating the terms in a phone call.
C)setting out the terms in a memo.
D)shaking hands on the deal.

Question 60

Pipes & Culverts Company orders six irrigation pumps from Quality Plumbing,Inc.The pumps are stored in Restorers Warehouse.Under the terms of the order,Quality must give Pipes & Culverts a warehouse receipt for the goods,which the buyer will then pick up.Title to the goods passes to Pipes & Culverts when​

A)Quality stores the pumps.
B)Pipes & Culverts orders the pumps.
C)Pipes & Culverts picks up the pumps.
D)Quality gives Pipes & Culverts a warehouse receipt for the pumps.

Question 61

Asian Noodle Company contracts to sell 1,000 cases of rice noodles to Beau's Bistros,Inc. ,but refuses to deliver.Due to a rice shortage,Beau's cannot obtain the noodles elsewhere.The buyer's right to recover the goods from the seller is the right of​

A)cover.
B)cure.
C)tender.
D)specific performance.

Question 62

TackMaker,Inc. ,and Silver Stallion Stables enter into a contract for a sale of bridles,saddlery,and other equine equipment.TackMaker delivers,but Silver does not pay.TackMaker can normally recover as damages​

A)any profit lost minus any loss avoided.
B)whatever amount the seller wishes to claim.
C)the purchase price plus incidental damages.
D)the market price at the place at which the seller delivered the goods.

Question 63

Langston steals from MindGames,Inc. ,ten game players,which Langston sells to Nu2U Games store.Unaware that the players are stolen,Nu2U reconditions them and sells them to Online Distributors,Inc.With the reconditioned drives,Nu2U gives Online Distributors a written statement that disclaims "any and all warranties." MindGames learns that Online Distributors has the players and demands their return.Online Distributors gives the equipment to MindGames and files a suit against Nu2U.Will Online Distributors succeed in its suit? Why or why not?​

Question 64

Owen and Pablo enter into a contract for a sale of well-drilling equipment.Pablo pays,but Owen does not deliver.Pablo can normally recover as damages the difference between​

A)any loss avoided and any profit gained.
B)the actual price and the hoped-for price.
C)the contract price and the market price.
D)the current prices in the parties' locations.

Question 65

Grande Floors,Inc. ,and Home Decor Stores enter into a contract for a sale of carpeting.Grande Floors,a merchant who deals in goods of the kind sold,makes express warranties in connection with the sale.Under the UCC,at the time a contract is formed,an express warranty can be disclaimed or modified​

A)by clear,conspicuous language called to the buyer's attention.
B)by implied affirmations of fact relating to the goods.
C)in any way that the seller sees fit for the ordinary purpose.
D)in no way.

Question 66

ReQwest LLC agrees to sell one hundred servers to Social Media Networks,Inc. The servers,which Social Media Networks expressly requires to have certain amounts of memory,are to be shipped "F.O.B.Social Media Networks distribution center in Tampa,FL." When the servers arrive,Social Media Networks rejects them and informs ReQwest,claiming that the servers do not conform to Social Media Networks' memory requirement.A few hours later,the servers are destroyed in a fire at Social Media Networks' distribution center. Will ReQwest succeed in a suit against Social Media Networks for the cost of the goods?​

Question 67

Field Farms and Gourmet Restaurant enter into a contract for a sale of produce.After Field ships the lettuce but before the restaurant receives it,the buyer declares bankruptcy.The seller can stop delivery of the goods in transit​

A)only if the quantity is at least 50 percent of the contract amount.
B)only if the quantity is in a single "unit."
C)only if the quantity is at least a truckload.
D)regardless of the quantity.

Question 68

Band Instruments,Inc. ,sells seventy-six trombones to Community & School Band Source,Inc.To avoid liability for most implied warranties,Band Instruments should state in writing that the trombones are sold​

A)as is.
B)by a merchant.
C)in perfect condition.
D)with no known defects.

Question 69

Eliza buys a new motorcycle from Fab Cycles,Inc.The most important factor in determining whether an express warranty is created is whether​

A)Eliza expresses to Fab Cycles what she wants warranted.
B)Eliza's desire for the cycle becomes part of her motivation to deal.
C)Fab Cycles expresses to Eliza what it expects of its customers.
D)Fab Cycles's promise becomes part of the basis of the bargain.

Question 70

River Gear Company and Scenic Trips,Inc. ,enter into a contract on August 1 for the sale of fifty inflatable river rafts.Scenic cancels the contract ten days later.River Gear is unable to sell the rafts to another buyer.River Gear can​

A)force the buyer to accept the rafts and pay for them.
B)recover the contract price but must hold the rafts for the buyer.
C)recover the contract price and keep the rafts.
D)recover the contract price but must destroy the rafts.

Question 71

The 1980 United Nations Convention on Contracts for the International Sale of Goods (CISG)has been adopted by eighty-four countries,including the United States and China.Glide Ride Inc.in the U.S.and Hangzhou Bikes Ltd.in China enter into a contract for a sale of bicycle parts.A dispute arises that leads to a conflict between the CISG and the UCC.In this situation,the CISG applies because​

A)it is a treaty of the U.S.national government.
B)it is a convention of the United Nations.
C)it has been ratified by both parties' countries.
D)China has not adopted the UCC.

Question 72

Home Remodelers,Inc. ,and Imogen enter into a contract for a sale of cabinets and countertops.Home Remodelers,a merchant who deals in goods of the kind sold,notes that its goods come with an implied warranty of merchantability.Under the UCC,this means that the goods are reasonably​

A)fit for the buyer's particular purpose.
B)fit for the ordinary purpose for which such goods are used.
C)suitable for resale at an acceptable price.
D)the best quality that money can buy.