Question 1

Why did contract law develop for hundreds of years and function well without a Uniform Commercial Code? Why did any need for standardized laws from one jurisdiction to another not get addressed until the beginning of the twentieth century?

Accepted Answer

The answer of Why did contract law develop for hundreds...

Question 2

A grocery store mails an offer to purchase 50,000 pounds of bananas to a produce importer.The importer immediately ships the 50,000 pounds of bananas by truck to the buyer but does not send notification to the buyer that it is making the shipment.Which of the following is true?

Accepted Answer

This scenario falls under the doctrine of "shipment of goods as acceptance." When the offer is for the sale of goods and the seller sends the goods to the buyer without any notification, it is considered an acceptance. Therefore, by shipping the 50,000 pounds of bananas, the importer has effectively accepted the offer. Option B is incorrect because acceptance can be made through any method, not just the same method used to receive the offer. Option C is partially correct, but it goes beyond the doctrine of shipment of goods as acceptance, which is applicable in this scenario. Option D is incorrect because the arrival of the bananas at the grocery store does not become a new offer but is still the original offer being accepted.

Question 3

A buyer agrees to purchase "two cars" from an elevator company.All material terms are contained in a written contract,but "two cars" is not further defined.Which of the following evidence can be admitted if there is a dispute over what "two cars" refers to?

Accepted Answer

Oral evidence that helps to clarify industry terms or definitions is admissible, so evidence that "car" refers to an elevator would be relevant and admissible. The other options involve evidence that contradicts or alters the terms of the written contract, which would not be admissible due to the parol evidence rule.

Question 4

A retailer ordered some inventory by phone from a manufacturer.The order was for 1,000 machines from the manufacturer's inventory at $300 each.The manufacturer sent the retailer a fax moments later detailing the order.The retailer looked at the fax and was satisfied that it stated the terms of the contract,but never responded in any way.When the goods were delivered on time a month later,the retailer refused to accept them,asserting that the contract was unenforceable.Which is true?

Accepted Answer

The written confirmation rule under the UCC states that if one party sends a written confirmation of a contract and the other party does not object within a reasonable time, the confirmation satisfies the writing requirement of the Statute of Frauds. In this case, the manufacturer sent a fax detailing the order, which can be considered a written confirmation. The retailer did not object within a reasonable time, which implies an acceptance of the terms of the contract. Therefore, the contract is enforceable.

Question 5

Which terms will be implied in a contract under the UCC if they are omitted in the express contract? Why does the UCC so freely imply these omitted terms? What are the risks of such a liberal policy of implying omitted terms?

Accepted Answer

The answer of Which terms will be implied in a...

Question 6

Company A signs a lease contract with Company B on Monday.The signor leaves the contract on his desk until Tuesday.The contract is brought to the post office on Tuesday afternoon.The post office temporarily misplaces the document,and does not locate it until Thursday.The contract is delivered to Company B on Friday.At what point was the contract accepted?

Accepted Answer

The contract is considered accepted when it is dispatched to the post office, as this is when Company A has completed its part in sending the acceptance.

Question 7

If a buyer and seller agree to a contract for the sale of goods amounting to $400,which modifications must be in writing in order to be enforceable?

Accepted Answer

The answer of If a buyer and seller agree to...

Question 8

Is the purpose of the UCC undermined by allowing nearly every one of its provisions to be made nonapplicable to a particular contract if the parties agree? Doesn't this interfere with the goal of the standardization of contract law? Why do you think that the UCC allows this?

Accepted Answer

The answer of Is the purpose of the UCC undermined...

Question 9

A newly opened retailer contracted with a computer component manufacturer for the purchase of some accessory keyboards.The contract was very detailed,specifying all aspects of the contract except for the quantity.Under these circumstances,a court would most likely:

Accepted Answer

A contract must have a definite quantity term to be enforceable. Without it, the contract is too indefinite to enforce.

Question 10

A buyer purchases some equipment that costs $20,000.As part of the contract,the seller agrees to install this equipment for an additional $2,000.After the buyer begins using the equipment,problems develop.Some of the problems relate to how the equipment was installed,while others relate to the equipment itself.Which of the following is true?

Accepted Answer

The entire contract is covered under the UCC because the sale of goods is governed by the UCC, and the installation services are incidental to the sale of the equipment.

Question 11

Seller offers to sell to Buyer 1,000 widgets at $5 each.Buyer responds in writing,stating that Buyer accepts the offer,but at a reduced price of $4.95.Seller refuses to deliver at this price.Buyer sues.Both parties are merchants.In this situation,which of the following is true?

Accepted Answer

The answer of Seller offers to sell to Buyer 1,000...

Question 12

Is it reasonable for certain provisions of the UCC to apply to merchants only or to apply differently to merchants than to nonmerchants? Shouldn't anyone who chooses to enter into a commercial transaction be held to the same standard? Is it unfair to have the two standards?

Accepted Answer

The answer of Is it reasonable for certain provisions of...

Question 13

A lessor and lessee orally agree to a lease of goods in the amount of $400 per month.The lease is later modified to $600 per month.Must the modification be in writing?

Accepted Answer

The modification of the lease from $400 to $600 per month constitutes a new agreement and should be in writing to comply with the Statute of Frauds, which requires written evidence for a contract to be enforced in court.

Question 14

Melissa purchased a compact satellite dish as part of a contract to obtain satellite television service.Melissa owns a small bar and plans to use the dish and cable service in her bar.The contract provided that she pay $200 for the dish,after which she would receive 12 months of television service through the satellite dish at no charge.After 12 months,in order to receive continued service,she would have to pay the company's regular monthly charge of $21,or her dish would be disabled.The dish is specially manufactured such that it can receive only the signals provided by the company that provided her with the dish.The company installed the dish in Melissa's bar as provided in the contract.For the first couple of months,Melissa was happy with the service.It was less expensive than regular cable television and the quality of the picture was superior.In the fourth month of the contract,Melissa began having problems.First,the dish became slightly warped.Second,the signals received by the dish began to fail frequently,at least once every week when bar patrons wanted to watch television.Melissa assumes the signal fails at other times when patrons are not watching.The warping of the dish appears to have affected the quality of the picture.Melissa had a friend hold the dish and push it into its original shape while Melissa watched the television,and the picture improved as long as the friend held the dish.The company refuses to address Melissa's complaints.Discuss whether the Uniform Commercial Code or common law would apply in resolving each of Melissa's problems.Also,discuss whether Melissa would be considered a merchant under the UCC.

Accepted Answer

The answer of Melissa purchased a compact satellite dish as...

Question 15

JetRed Airlines wants a new plane that is manufactured by the Boeing Corporation.A local bank agrees to purchase the plane from Boeing,and lease the aircraft to JetRed.The plane is delivered directly to JetRed.Who is the lessor in this arrangement?

Accepted Answer

The bank is the lessor in this arrangement as they are purchasing the plane from Boeing and leasing it to JetRed. Boeing is the manufacturer of the plane and JetRed is the lessee, who will be using the aircraft.

Question 16

A small consulting firm entered into a contract with an office machine retailer to purchase a photocopier for $3,000.The contract included a service agreement.The consultants inquired into dropping the service agreement,but because that would lower the price by only $250,they decided to pay the $3,000.After using the copier for several months,it began to need a few service calls.The copier generally worked well,and the problems were minor,but there were problems with the service.Many times it would take a couple of days for a technician to arrive and take care of the problem.More frustrating was the fact that many of the problems required only minor adjustments.Other times parts were not available.The consultants read the provisions of the agreement relating to the servicing and concluded that there had been numerous breaches.In a dispute over the service,what laws would apply and why?

Accepted Answer

The answer of A small consulting firm entered into a...

Question 17

A buyer and seller enter into a written contract for the sale of some specialty steel to be used by the buyer in the manufacture of some appliances.The contract specified all the terms of the contract except the price.Which of the following is true?

Accepted Answer

A reasonable price will be implied under the Uniform Commercial Code (UCC) for contracts involving the sale of goods when the price is not specified.

Question 18

Seller orally contracts to sell goods to Buyer for a total price of $450.Several days later,both parties orally agree to raise the price to $550 because of a shortage of these goods.When the goods are delivered,Buyer refuses to accept them.Seller sues.Both parties are merchants.In this situation,which of the following is true?

Accepted Answer

Under the UCC (Uniform Commercial Code), contracts for the sale of goods worth $500 or more must be in writing to be enforceable, except under certain circumstances which are not present in this scenario. However, there is an exception for modifications to contracts that have already been made, which allows modifications to be made orally even if the original contract required a writing. In this case, both parties are merchants, so this exception applies. Therefore, the modified contract is enforceable without a writing. The Buyer's refusal to accept the goods is a breach of contract, so the Seller can recover damages. However, since the original contract was for $450 and the modification raised the price to $550, the Seller can only recover the amount that both parties agreed upon, which is $550.

Question 19

A homeowner orally contracted to buy some custom-made parts that the homeowner will use to build a retaining wall in the homeowner's back yard.The contract price for these materials was $2,000.The buyer refused to take delivery even though the materials were conforming.The seller is unable to sell these parts to anyone else because they were individually designed for the homeowner.In a lawsuit against the homeowner by the seller of the parts,which of the following is true?

Accepted Answer

This contract is enforceable even though it is not in writing. Under the UCC, contracts for the sale of goods of $500 or more must be in writing to be enforceable, but this exception applies only to merchants. As long as the homeowner is not a merchant, this contract qualifies for the oral contract exception. The fact that the materials will become real property when installed does not affect the enforceability of the contract. Therefore, the seller can sue the homeowner for breach of contract and seek damages equal to the contract price. The seller may also be entitled to recover incidental damages, such as the cost of storage, and any consequential damages resulting from the breach.

Question 20

A buyer who is not a merchant in boats is at a boat store and orally agrees to purchase a sailboat for $2,000.The buyer sends a written confirmation to the boat dealer the next day describing all relevant terms of their agreement.When the buyer goes to the store a week later to pick up the boat,the store refuses to sell the boat for $2,000.Which is true?

Accepted Answer

The answer of A buyer who is not a merchant...

Quiz 18: Formation of Sales and Lease Contracts