Deck 19: The Formation of Sales and Lease Contracts

Question 1

When a sales contract contemplates shipment of the goods but does not specify the arrangements, either party can make those arrangements.

Answer 1

False

Question 2

If a contract for a sale of goods leaves the quantity term open, there is a basis for determining a remedy.

Answer 2

False

Question 3

Corporate stocks and bonds meet the requirements to be among the items of property characterized as goods under the UCC.

Answer 3

False

Question 4

When the parties to a contract for a sale of goods do not specify a payment term, and the parties are unaware of the UCC's rules, those rules do not apply.

Question 5

If a court determines that a contract involving both goods and services is primarily a goods contract, any dispute over the deal will be decided under the UCC.

Question 6

Under the UCC, if a dispute occurs over the existence of a contract, a purchase order can be sufficient to indicate that there is a contract.

Question 7

A contract for a sale of natural gas is a contract for a sale for goods.

Question 8

An auto dealer is a merchant when selling or leasing a new car but not when selling or leasing a pre-owned vehicle.

Question 9

The UCC imposes certain special business standards on merchants because of their commercial expertise.

Question 10

An agreement to transfer the right to possess and use goods for a commercial purpose for a period of time in exchange for payment is a lease.

Question 11

Under the UCC, merchant's choice is the test to determine whether a contract is primarily for the sale of goods or services.

Question 12

The UCC states that an agreement sufficient to constitute a contract cannot exist if the moment of its making is undetermined.

Question 13

An agreement for the temporary use of goods for a personal, family, or household purpose in exchange for payment does not fall under the UCC.

Question 14

Except for an option contract, a firm offer by a merchant is irrevocable once it has been made.

Question 15

Parties to sales and lease contracts are not free to agree to terms different from those stated in the UCC.

Question 16

The UCC provides that a sale or lease contract will fail for indefiniteness if more than one of its terms is left open.

Question 17

The UCC promotes commerce by simplifying and streamlining commercial transactions.

Question 18

To qualify as a sale under the UCC, the price in the transaction must be payable in cash.

Question 19

An auto lease between a consumer and a car dealer is not governed by the UCC because the statute applies only to transactions between merchants.

Question 20

To the extent that it has not been modified by the UCC, the common law of contracts applies to sales contracts.

Question 21

If a writing indicating a sales contract contains only some of the terms that the parties agreed to, a court may allow evidence of consistent additional terms.

Question 22

To satisfy the UCC's Statute of Frauds, a writing indicating an intent to form a sales contract must be signed by both parties.

Question 23

Miko owns a lake house that she rents to vacationers. Miko gives her son Ninh a trip to Omaha on his graduation from community college. Miko sells her car to her neighbor Pye for $4,500. UCC Article 2 covers

A) the lake house rentals.
B) the gift to Ninh.
C) the sale to Pye.
D) none of the choices.

Question 24

Life Products Inc. enters into a contract to sell medical supplies to Med Clinic, which later sells some of the items to Nina, a patient and consumer. Article 2 of the UCC applies to

A) both transactions.
B) the sale from Life Products to Med Clinic only.
C) the sale from Med Clinic to Nina only.
D) none of the transactions.

Question 25

Under the UCC, contract modifications extorted by one contracting party from the other party are in bad faith but enforceable.

Question 26

Under the law that governs the international sale of goods, when an acceptance to a contract includes terms additional to those in the offer, the terms automatically become part of the deal.

Question 27

Generally, when an acceptance to a sales contract between merchants includes terms additional to those in the offer, the terms automatically become part of the deal.

Question 28

Skyscape LLC regularly engages in the business of leasing construction equipment, primarily to commercial contractors. Tilde, a consumer, leases a backhoe from Skyscape to landscape the property at her home. The price is less than the amount set by state statute. Under the UCC, the deal with Tilde is

A) a commercial lease.
B) a consumer lease.
C) a construction lease.
D) none of the choices.

Question 29

The United Nations Convention on Contracts for the International Sale of Goods is the law that governs contracts for the international sale of goods.

Question 30

If the acceptance to a sales contract between non-merchants includes terms different from those in the offer, no contract is formed under the UCC.

Question 31

Because contracting parties presumably know best what they meant by their words, the course of performance under their agreement is the best indication of what they meant.

Question 32

Under the UCC, the meaning of any agreement must be interpreted in light of commercial practices, so a court will not assume that the usage of trade was taken into account when the agreement was phrased.

Question 33

Acceptance of an offer to lease goods can be made by any means reasonable under the circumstances, including a prompt shipment of the goods.

Question 34

Jade offers to sell Khan a collection of baseball cards. To qualify as a sale under the UCC, Khan's payment must be

A) split into more than one installment.
B) in cash, or its equivalent, or in other goods or services.
C) specified on an invoice and evidenced by a receipt.
D) the fair market value of the goods.

Question 35

Aaron offers to sell Babe a collection of baseball cards. For their transaction to be a sale under the UCC, title to the collection must be passed from the seller to the buyer for

A) cash.
B) services.
C) a price.
D) goods.

Question 36

In response to an order for a hundred baseballs, the shipment of a hundred basketballs is both an acceptance of the offer and a breach of the contract.

Question 37

If a sales contract prohibits any changes unless they are in a signed writing, then only those changes agreed to in a signed writing are enforceable.

Question 38

Under the law that governs the international sale of goods, when the parties to a contract do not specify a price term, or at least provide for its specification, normally no contract will exist.

Question 39

An excessive price for goods and unequal bargaining power can indicate to a court that a sales contract is unconscionable.

Question 40

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

Question 41

Mara and Nim enter into a contract for a sale of orchids that requires payment within thirty days of delivery. Under the UCC, the payment term in the contract

A) removes the entire transaction from the UCC.
B) is superseded by the UCC rule that payment is due on delivery.
C) is fully enforceable.
D) is not enforceable because it does not specify a definite date.

Question 42

Interstate Transport Company pays Trucks & Trailers Inc. a stated price for the use of seven tractor-trailer rigs for a year. Under the UCC, this is

A) a contract for services.
B) a sublease.
C) a lease.
D) a sale.

Question 43

Excluded from Article 2 of the UCC is

A) all of the choices.
B) corporate stocks and bonds.
C) patents and copyrights.
D) ordinary contract rights.

Question 44

Embers Corporation orders twelve fire extinguishers from Firefighting Equipment Inc., which delivers the goods. This is most likely

A) a gift.
B) a lease of goods.
C) a sale of goods.
D) a contract for services.

Question 45

Marine Expeditions, Inc., pays Nate's Boats $4,000 to use an oceangoing vessel for a month. For the purposes of the UCC, this is

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

Question 46

Refined Metals Company and Superior Fabrication, Inc., enter into a contract under which Refined agrees to deliver a certain quantity of sheet metal to Superior each month. The contract does not include a price term. In a suit between the parties over the price, a court will

A) determine a reasonable price.
B) impose the lowest market price.
C) impose the highest market price.
D) return the parties to the positions they held before the contract.

Question 47

Jo owns a condominium that she leases to Katrina. Jo gives her daughter Lucia $450 on her sixteenth birthday. Jo sells her car to her neighbor Maria for $1,500. Article 2 of the UCC covers

A) the lease with Katrina.
B) the gift to Lucia.
C) the sale to Maria.
D) all of the choices.

Question 48

Auto Body & Paint Company orders custom paint from Best Hues Inc., but Best does not deliver. Auto Body will probably be unable to enforce the agreement if the parties omitted

A) a price term.
B) a delivery date.
C) a quantity term.
D) shipping arrangements.

Question 49

Rice Farm Corporation offers to sell Sushi Restaurants, Inc., five hundred bushels of rice. Sushi responds, "We agree to buy five hundred bushels only if the rice is Grade A quality." Without more, their contract is formed according to

A) the new terms of the acceptance.
B) whatever is reasonable.
C) the terms of the original offer.
D) none of the terms.

Question 50

Ferris is refinishing his kitchen floor and needs a floor sander to complete the job. Ferris's neighbor Gina suggests that he call Home Repair Rentals, Inc. Home Repair leases Ferris a floor sander. In this transaction, the lessor is

A) Ferris.
B) Gina.
C) Home Repair.
D) none of the parties.

Question 51

Curt enters into a contract with Drivers Lease Company for a three-year lease of a car. This contract is subject to

A) Article 2 of UCC.
B) Article 2A of the UCC.
C) none of the choices.
D) the common law only.

Question 52

Grains Inc., agrees to sell to Harvest Company a certain quantity of refined grains. Some of the other terms in the deal are left open. In the case of a dispute, a court will presume

A) whatever favors the non-breaching party.
B) whatever favors the plaintiff.
C) whatever is reasonable.
D) nothing.

Question 53

Power Company offers to buy from Quality Transformers LLC a specific quantity of a certain type of transformer for a stated price. Quality can accept the offer by

A) a counteroffer within a reasonable time.
B) a promise to ship the goods.
C) a rejection of the offer with an invitation to negotiate a different price.
D) any of the choices.

Question 54

Talk Inc. offers to buy from Ultra Corporation 1,000 phones with certain features. Without notifying Talk, Ultra timely ships phones with fewer features. With respect to the offer, this shipment is an acceptance and

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

Question 55

Bon, an agent for City Motors Inc., e-mails Dale on May 1 that the dealer will sell her a 2018 Ford pick-up truck for $25,000 between May 1 and July 1. Bon's offer to Dale is

A) irrevocable for the stated period.
B) irrevocable until Dale responds.
C) revocable at any time.
D) revocable on the payment of consideration to Dale.

Question 56

Ed sells his car to Fran for $5,000, his bike to Gwen for $600, his game player to Holly for $200, and three shares of stock to Inez for $100. Article 2 of the UCC does not apply to the sale of

A) the car.
B) the bike.
C) the game player.
D) the patent.

Question 57

Brooke is an art collector and hires a broker to buy and sell artworks on her behalf. Under the UCC, in those transactions, Brooke has the status of

A) a consumer.
B) an agent or other intermediary.
C) a merchant.
D) an employer and manager.

Question 58

Containers Inc. sends its standard order form to Distribution Corporation to evidence a sale of packing materials. Distribution responds with its own standard purchase order form. Additional terms in Distribution's form automatically become part of the contract unless

A) the terms materially alter the original contract.
B) the original offer expressly required acceptance of its terms.
C) Containers objects to the new terms within a reasonable time.
D) any of the choices.

Question 59

Mining Corporation purchases the business assets of Open Pit Inc., including its equipment and supplies, for an agreed-to price, payable in installments. Under the UCC, this transaction is

A) a contract for services.
B) a sublease.
C) a lease.
D) a sale.

Question 60

Dona offers to sell her used sofa, chair, coffee table, end table, and lamp to Erma for $700. Erma responds that she will pay that price if Dona's TV set is included. Neither party is a merchant. Their contract is formed according to

A) the new terms of the acceptance.
B) whatever is reasonable.
C) the terms of the original offer.
D) none of the terms.

Question 61

Joel sells a violin to Key for $5,000, a cello to Leda for $400, and five music stands to Mica for $50. A writing is required to enforce the sale of

A) the violin only.
B) the violin and the cello only.
C) the violin, the cello, and the music stands.
D) none of the choices.

Question 62

Under the second of two contracts with Citrus Orchard for deliveries of fruit, Distribution Center refuses to pay for fruit that arrives damaged. Citrus responds that the buyer did not waive payment for damaged goods in the parties' first contract. Citrus is arguing that the court should take into account

A) course of dealing.
B) course of performance.
C) usage of trade.
D) none of the choices.

Question 63

With respect to a contract for a sale of goods, when its express terms cannot be construed as reasonably consistent with the parties' course of performance and course of dealing, and the usage of trade, the UCC gives priority to

A) express terms.
B) course of performance.
C) course of dealing.
D) usage of trade.

Question 64

Under a contract with Assemble Inc. for the delivery of a shipment of TV sets, Buyers Store refuses to pay for sets with cracked cases. Assemble files a suit against Buyers, claiming that the defendant assumed the risk of damaged goods. The court may allow evidence of this term if it finds that the parties' contract is

A) fully integrated.
B) not fully integrated.
C) none of the choices.
D) a complete and final statement of their agreement.

Question 65

Tune Products, Inc., offers to sell to Unlimited Sales Company one hundred MP3 players at $50 a piece, subject to certain specific delivery dates. Unlimited replies with a signed purchase order that reads, "Accept your offer for 100 I-appliances at $50 each. Must be delivered to our warehouse." Tune does not respond or deliver the goods. Unlimited files a suit for breach of contract, to which Tune answers that there is no contract because Unlimited's purchase order contained additional terms and is not signed by Tune. Can Unlimited recover? Explain.

Question 66

Ron enters into written agreements with Sophie involving a sale of Timberline Motel, including the land, the building, and the furnishings. The UCC Statute of Frauds governs the sale of

A) all of the choices.
B) the building.
C) the furnishings priced at $500 or more.
D) the land.

Question 67

Under a contract with Farm Inc. for a delivery of vegetables, Growers Mart refuses to pay for some of the produce. The buyer contends that the practice in the trade with respect to payment for spoiled produce justifies its refusal to pay. Growers Mart is arguing that the court should take into account

A) course of dealing.
B) course of performance.
C) usage of trade.
D) none of the choices.

Question 68

Grass Farm LLC offers to sell fifty bales of hay at a certain price to Horse Stable Inc. The owner of the stable responds, "We agree if you agree to make it sixty bales for the price." Their contract is formed according to

A) the new terms of the acceptance.
B) whatever is reasonable.
C) the terms of the original offer.
D) none of the terms.

Question 69

Bert's Bagels Inc. and other bakeries refer to a "baker's dozen" as consisting of a collection of thirteen baked goods. According to the UCC, this is

A) a course of dealing.
B) a course of performance.
C) none of the choices.
D) a usage of trade.

Question 70

Clean Machines Company makes washing machines. Over the phone, Clean offers to sell Dealers Appliance Outlet one hundred model EZ2000 washers at a price of $150 per unit. Clean says that it will keep the offer open for ninety days. Dealers responds that within two or three weeks it will decide whether to accept. One week later, Clean faxes, and Dealer receives, notice that the offer is withdrawn. Dealer immediately phones Clean to accept the $150-per-unit offer. When Clean refuses to deliver at that price, Dealer files a suit. Clean asserts, first, that there is no contract and, second, that if there is a contract, it is unenforceable. Discuss Clean's assertions.

Question 71

Bean Processor Inc. agrees to ship a certain quantity of coffee beans to Coffee Café LLC. Bean sends to Coffee an e-mail indicating that the parties intended to form a contract. Against Bean, as a contract, the e-mail will be sufficient

A) if it is signed by Bean.
B) if it is signed by Coffee.
C) if Coffee responds with an acknowledgment of the deal.
D) under no circumstances.

Question 72

Speedy Trucking Inc. and Trailer Rents LLC 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.