Question 1

Dona offers to sell her used sofa, chair, coffee table, end table, and lamp to Etta for $700. Etta 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.

Accepted Answer

The answer of Dona offers to sell her used sofa,...

Question 2

Grinders Mill 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.

Accepted Answer

In contract law, when certain terms of a deal are left open or are ambiguous, a court will typically presume whatever is reasonable under the circumstances to fill in the gaps or resolve the ambiguity. This approach aims to enforce the contract in a manner that reflects the parties' intentions as closely as possible, based on the available evidence and the norms of fairness and reasonableness in commercial dealings.

Question 3

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B)is superseded by the UCC rule that payment is due on delivery.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.

Accepted Answer

The payment term in the contract is fully enforceable under the UCC. The UCC allows for flexibility in payment terms, including payment within a specified period after delivery, as long as the terms are clear and agreed upon by both parties.

Question 4

Rice Farm 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.

Accepted Answer

Sushi Restaurants Inc.'s response adds a condition to the acceptance, making it a counteroffer. The contract is formed on the new terms of the acceptance, which include the stipulation that the rice must be Grade-A quality.

Question 5

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.

Accepted Answer

Under the Uniform Commercial Code (UCC) for the sale of goods, additional terms in an acceptance become part of the contract unless they materially alter it, the offer expressly limits acceptance to its terms, or the offeror objects to the new terms within a reasonable time.

Question 6

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.

Accepted Answer

This transaction is considered a sale under the Uniform Commercial Code (UCC) because it involves the transfer of ownership of goods (equipment and supplies) from one party to another for a price. The UCC primarily governs sales of goods and certain aspects of their financing.

Question 7

Excluded from Article 2 of the UCC are
A)all of the choices.
B)corporate stocks and bonds.
C)patents and copyrights.
D)ordinary contract rights.

Accepted Answer

Article 2 of the UCC applies to transactions in goods, not to corporate stocks and bonds, patents and copyrights, or ordinary contract rights, which are excluded.

Question 8

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.

Accepted Answer

This shipment is considered an acceptance of the offer but also constitutes a breach because Ultra Corporation did not fulfill the specific terms of the offer by shipping phones with fewer features than were agreed upon.

Question 9

Seacoast 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.

Accepted Answer

This is considered a lease under the Uniform Commercial Code (UCC) because it involves the transfer of the right to possess and use goods (tractor-trailer rigs in this case) for a term in return for consideration.

Question 10

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.

Accepted Answer

Under the UCC (Uniform Commercial Code), Brooke would have the status of a merchant because she is dealing in goods of the kind (in this case, artworks) and by hiring a broker, she is engaging in buying and selling artworks as part of her business. The UCC defines a merchant as someone who deals in goods of the kind or otherwise holds themselves out as having knowledge or skill peculiar to the practices or goods involved in the transaction.

Question 11

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 choices.

Accepted Answer

In this transaction, Home Repair Rentals, Inc. is the lessor because they are the company leasing the floor sander to Ferris. The lessor is the party that rents out or leases the property (in this case, the floor sander) to another party.

Question 12

Jo owns a condominium that she leases to Kia. Jo gives her daughter Liu $450 on her sixteenth birthday. Jo sells her car to her neighbor Maia for $1,500. Article 2 of the UCC covers
A)the lease with Kia.
B)the gift to Liu.
C)the sale to Maia.
D)all of the choices.

Accepted Answer

Article 2 of the Uniform Commercial Code (UCC) applies to transactions involving the sale of goods. The sale of the car to Maia falls under this category, as a car is considered a good. The lease with Kia is a real estate transaction, and the gift to Liu does not involve a sale, so neither is covered by Article 2 of the UCC.

Question 13

Embers Corporation orders twelve fire extinguishers from Firefighting Inc., which delivers the equipment. This is most likely
A)a gift.
B)a lease of goods.
C)a sale of goods.
D)a contract for services.

Accepted Answer

This scenario describes a sale of goods, where Firefighting Inc. delivers fire extinguishers to Embers Corporation in exchange for payment, fitting the definition of a sale transaction.

Question 14

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.

Accepted Answer

A promise to ship the goods is considered an acceptance of the offer in a sales contract, according to the Uniform Commercial Code (UCC), which governs commercial transactions.

Question 15

Auto Body 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.

Accepted Answer

A contract for the sale of goods must include a quantity term to be enforceable. Without specifying the quantity of goods to be purchased or sold, the agreement lacks sufficient definiteness for a court to enforce. Other terms like price, delivery date, and shipping arrangements can often be inferred or determined based on market value, reasonable time, or default provisions under the Uniform Commercial Code (UCC).

Question 16

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.

Accepted Answer

Article 2A of the UCC specifically deals with leases of personal property, including car leases, making it applicable to Curt's situation.

Question 17

Marine Expeditions Inc. pays Noah'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.

Accepted Answer

This is considered a lease under the Uniform Commercial Code (UCC) because it involves the transfer of the right to possess and use goods (in this case, an oceangoing vessel) for a period of time in exchange for payment.

Question 18

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.

Accepted Answer

Under the UCC (Uniform Commercial Code), if a contract is formed but does not include a price term, the court will determine a reasonable price at the time of delivery. This is to ensure fairness and uphold the validity of the contract despite the omission of specific terms.

Question 19

Elle sells a motorcycle to Fran for $5,000, a bike to Gwen for $600, a pool table 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 motorcycle.
B)the bike.
C)the pool table.
D)the stock.

Accepted Answer

Article 2 of the UCC applies to the sale of goods, and stocks are not considered goods but rather securities or intangible assets. Therefore, the sale of stock to Inez does not fall under Article 2 of the UCC.

Question 20

Bon, an agent for City Motors Inc., e-mails Dale on May 1 that the dealer will sell to 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.

Accepted Answer

An offer is irrevocable for the stated period if the offeror promises to keep the offer open for a certain period of time.

Quiz 20: Sales and Lease Contracts

Dona offers to sell her used sofa, chair, coffee table, end table, and lamp to Etta for $700. Etta 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

Grinders Mill 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

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

Rice Farm 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

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

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

Excluded from Article 2 of the UCC are

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

Seacoast 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

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

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

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

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

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

Auto Body 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

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

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

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

Elle sells a motorcycle to Fran for $5,000, a bike to Gwen for $600, a pool table 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

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