Question 1

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.

Accepted Answer

The doctrine of unconscionability allows a court to refuse to enforce a contract because the terms are so extremely favorable to one party over the other that they are deemed unconscionable or shockingly unjust. This would be the appropriate legal challenge for Holly to bring against the contract if she perceives a clause to be grossly unfair. The other options are not applicable in this scenario.

Question 2

Jack sells a grand piano to Kyle for $5,000 and a gold ring to Lauren for $999. A writing is required to enforce the sale of
A) ​the piano only.
B) ​the piano and the gold ring.
C) ​neither the piano nor the gold ring.
D) ​the gold ring only.

Accepted Answer

Since both the piano and the gold ring were sold, a writing is required to enforce the sale of both items.

Question 3

Raul agrees to ship to Ben one hundred ceiling fans for $5,000. Raul initials his notes of the deal, which include 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​
A) ​enforceable, because under the UCC a contract need not written.
B) ​enforceable, because Raul's initialed notes are a sufficient writing.
C) ​enforceable, because Ben's initialed notes are a sufficient writing.
D) ​not enforceable.

Accepted Answer

Under the UCC, a contract for the sale of goods over $500 does not need to be in writing to be enforceable. However, if there is a writing, it must contain the essential terms of the agreement and be signed by the party to be charged with enforcement. In this case, Raul and Ben both initialed their notes of the deal, which included the essential terms of the agreement, and therefore the deal is enforceable under the UCC.

Question 4

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.

Accepted Answer

According to the Statute of Frauds, any agreement for more than $500 must be in writing. Therefore, an oral agreement for a lease of six doublewides with payments totaling more than $40,000 would need to be put in writing to satisfy the Statute of Frauds. Choice C, setting out the terms in a memo, is the best option for satisfying this requirement.

Question 5

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.

Accepted Answer

The answer of Clean Machines Company makes washing machines. Over...

Question 6

Fact Pattern 20-1
Farmers Produce, Inc., and Growers Market enter into a contract for the delivery of locally grown fruits and vegetables. The parties use a standard Farmers Produce form that contains some of the terms the parties agree on but not others. Some of the produce spoils before it can be cooked, served, and eaten, or sold. Growers Market refuses to pay for the spoiled goods.
-Refer to Fact Pattern 20-1. Growers Market contends that the practice in the trade with respect to payment for spoiled produce justifies its refusal to pay. Growers Market is arguing that the court should take into account
A) ​the course of dealing.
B) ​the course of performance.
C) ​the usage of trade.
D) ​none of the choices.

Accepted Answer

The argument made by Growers Market is related to the usage of trade, which is the general practice in the particular industry or market. Thus, the court should take into account the usage of trade when determining the parties' obligations in the contract.

Question 7

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
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.

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 8

Fact Pattern 20-1
Farmers Produce, Inc., and Growers Market enter into a contract for the delivery of locally grown fruits and vegetables. The parties use a standard Farmers Produce form that contains some of the terms the parties agree on but not others. Some of the produce spoils before it can be cooked, served, and eaten, or sold. Growers Market refuses to pay for the spoiled goods.
-Refer to Fact Pattern 20-1. Farmers Produce files a suit against Growers Market, claiming that the buyer assumed the risk of the spoilage of the unsold 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.

Accepted Answer

If the contract is not fully integrated, evidence of additional terms not included in the written agreement can be presented in court. In this case, since the Farmers Produce form did not contain all the terms, evidence of the buyer assuming the risk of spoilage could be presented.

Question 9

Coffee Roasters, Inc., sells whole bean and ground coffee to Delicioso Deli under an existing contract. When the cost of coffee beans increases, Delicioso agrees to a price increase, but later wants to cancel the contract. Delicioso may
A) ​cancel the contract immediately.
B) ​cancel the contract only after accepting a final shipment.
C) ​cancel the contract only on reasonable notice.
D) ​not cancel the contract.

Accepted Answer

Delicioso may not cancel the contract because they have already agreed to a price increase under the existing contract, indicating acceptance of the modified terms. Contracts, once agreed upon and modified by mutual consent, are binding unless provisions within the contract allow for cancellation under specific conditions, which are not indicated in this scenario.

Question 10

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

Accepted Answer

The answer of Key of G Products, Inc., offers to...

Question 11

Fact Pattern 20-1
Farmers Produce, Inc., and Growers Market enter into a contract for the delivery of locally grown fruits and vegetables. The parties use a standard Farmers Produce form that contains some of the terms the parties agree on but not others. Some of the produce spoils before it can be cooked, served, and eaten, or sold. Growers Market refuses to pay for the spoiled goods.
-Refer to Fact Pattern 20-1. Farmers Produce responds that it did not waive payment for spoiled goods in the parties' previous transaction. Farmers Produce is arguing that the court should take into account
A) ​the course of dealing.
B) ​the course of performance.
C) ​the usage of trade.
D) ​none of the choices.

Accepted Answer

Farmers Produce is arguing that the court should consider the course of dealing, which refers to the parties' previous transactions and the business practices they have established between them. By bringing up their previous dealings, Farmers Produce is suggesting that there was an implied agreement that Growers Market would pay for spoiled goods. The court can look at this course of dealing to interpret the parties' intentions and resolve the dispute.

Question 12

Toro, S.A., which is based in Mexico, enters into a contract for the purchase of portable livestock fencing from United Fencing Company, which is based in the United States. This contract is governed by
A) ​Mexican law.
B) ​the provisions in the laws of both countries that are similar.
C) ​the Uniform Commercial Code.
D) ​the United Nations Convention on Contracts for the International Sale of Goods.

Accepted Answer

The United Nations Convention on Contracts for the International Sale of Goods (CISG) governs international sales contracts for the majority of international sales transactions, and both Mexico and the United States are parties to the CISG. Therefore, the CISG would be the most appropriate governing law for this contract.

Quiz 20: The Formation of Sales and Lease Contracts

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

Jack sells a grand piano to Kyle for $5,000 and a gold ring to Lauren for $999. A writing is required to enforce the sale of

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

Coffee Roasters, Inc., sells whole bean and ground coffee to Delicioso Deli under an existing contract. When the cost of coffee beans increases, Delicioso agrees to a price increase, but later wants to cancel the contract. Delicioso may

Toro, S.A., which is based in Mexico, enters into a contract for the purchase of portable livestock fencing from United Fencing Company, which is based in the United States. This contract is governed by