Question 1

Fresh Dairy,Inc.,is the offeror and Gelato Ice Cream Company is the offeree under a unilateral sales contract in which Hector's Helado Corporation is also interested. Gelato is not notified of Fresh Dairy's performance within a rea-son-able time. Gelato

Accepted Answer

If the offeree (Gelato) is not notified of the offeror's (Fresh Dairy) performance within a reasonable time, Gelato may assume that the offer has lapsed.

Question 2

Orange Vest Manufacturing Corporation orders twelve job-training and on-the-job safety videos from Plum Productions,Inc.,which delivers the itemsto Orange Vest. This is most likely

Accepted Answer

The transaction involves the ordering and delivery of goods (job-training and on-the-job safety videos), which suggests a sale of goods.

Question 3

Savannah and Tim enter into a sales contract for orchids. With respect to the specific contractual provisions set out in the UCC,Savannah and Tim may

Accepted Answer

The answer of Savannah and Tim enter into a sales...

Question 4

Jamie is redoing his kitchen and decides he needs a floor sander to complete the job. Jamie tells Rachel,his neighbor,that he needs a floor sander. Rachel tells Jamie to call Home Repair Rentals,Inc. Home Repair Rentals leases Jamie a floor sander. In this transaction the lessor is

Accepted Answer

Home Repair Rentals is the lessor as they are the ones who are leasing the floor sander to Jamie. Jamie is the lessee (or renter) in this transaction. Rachel simply directed Jamie to the leasing company, but she is not directly involved in the lease agreement.

Question 5

Perfect Potato Chip Company makes an offer that Snack Foods Corporation would like to accept. Under the "mirror image rule",an acceptance

Accepted Answer

The mirror image rule states that an acceptance must include only those terms and conditions contained in the offer. Any additional or different terms proposed by the offeree would be considered a counteroffer rather than an acceptance. Therefore, option C is the correct answer. Options A and B are incorrect because they suggest that an acceptance may include additional terms, which is not true under the mirror image rule. Option D is incorrect because it suggests that all parties must agree to additional terms, when in fact the offeror must agree to the terms proposed by the offeree for them to become part of the agreement.

Question 6

Curtis enters into a contract with Drive-Away Lease Company for a three-year lease of a car. This contract is subject to

Accepted Answer

Article 2A of the UCC specifically deals with leases of goods, which would include a car lease like the one described in the scenario. Therefore, this contract is subject to Article 2A. Option A (Article 2) deals with the sale of goods, which is not relevant in this scenario, and Option C (Article 3) deals with negotiable instruments such as checks and promissory notes. Option D (the common law only) is not applicable because the UCC applies to this situation.

Question 7

Refined Grains,Inc.,agrees to sell to Sunny Breakfast 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

Accepted Answer

Under the UCC, if the place of delivery is not specified in the contract, the default rule is that delivery takes place at the seller's place of business.

Question 8

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

Accepted Answer

Since the contract does not include a price term, the court will have to determine a reasonable price based on the circumstances of the case. This may involve considering market prices, but it ultimately relies on the court's determination of what is a fair and reasonable price under the circumstances.

Question 9

Nature's Products,Inc.,sends its standard order form to Interbusiness Distribution Corporation (IDC)to evidence a sale of packing materials. IDC responds with its own standard purchase order form. Additional terms in the purchase order automatically become part of the contract unless

Accepted Answer

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

Question 10

Brian,an agent for Clarion Motors,Inc.,writes a letter to Dina on November 1 stating that he will sell her a 2016 Subaru Outback for $20,000 between November 1 and December 31. Brian's letter to Dina is

Accepted Answer

Brian's letter to Dina is a merchant's firm offer because it is a definite and specific offer made by him as a merchant, with a specific time limit and a specific price. This offer is made in the ordinary course of business, and is designed to create a binding contract if accepted by Dina within the time limit specified. Therefore, option C (an option contract) is not the best choice, since it would require Dina to make a separate payment for the right to purchase the vehicle at the agreed-upon price. Option B (an acceptance) is also not the best choice, since Dina has not yet accepted the offer.

Question 11

Bert sells his car to Conrad for $5,000 and his bike to Del for $600. Bert sells his vinyl collection to Elena for $1,000 and his stock in Altogether Now,Inc.-a firm that markets an app for organizing digital music files-to Franz for $4,000. UCC Article 2 covers all of these transactions except the sale of

Accepted Answer

UCC Article 2 covers transactions in goods, which are tangible and movable items. Stocks are considered securities, not goods, and are therefore not covered by UCC Article 2.

Question 12

TalkTalk,Inc.,offers to buy from Voice Media Corporation (VMC)100,000 smartphones. Without notifying TalkTalk,VMC timely ships phones of a different quality. With respect to the offer and a possible contract,this shipment is an acceptance and

Accepted Answer

The shipment of phones of a different quality without notifying TalkTalk is a breach of the initial offer, as it does not meet the terms and conditions of the offer.

Question 13

Expert Stitching Corporation enters into a contract to sell denim clothing to Fine Fashion Company,which in turn sells a pair of jeans to Grady,a consumer. In contrast to standards that apply to consumers,the UCC imposes on merchants

Accepted Answer

The answer of Expert Stitching Corporation enters into a contract...

Question 14

In a dispute over a sale involving a bicycle,Dain argues that as to this deal Emil's Hobby Shop,where Dain bought the bike,is a merchant. A court may determine whether Emil's is a merchant by assessing whether

Accepted Answer

A merchant is one who holds themselves out as having knowledge or skill unique to the goods being sold. Option A is not a reliable determinant as there could be many reasons why a merchant may not have sold any bikes within a year, while options C and D are not relevant to whether Emil's Hobby Shop is a merchant for the purpose of this transaction.

Question 15

Car n' Truck Body & Paint Company orders custom paint from Diverse Hues Inc.,but Diverse does not deliver. Car n' Truck will probably be unable to enforce the agreement if the parties omitted

Accepted Answer

Under the Uniform Commercial Code (UCC), a contract for the sale of goods can be valid even if it leaves some terms open. However, the contract must specify the quantity of goods to be sold to be enforceable. Without a quantity term, it's impossible to determine the scope of the agreement, making enforcement difficult. Price, delivery date, and shipping arrangements can be determined based on reasonable terms or industry standards if not explicitly mentioned, but the quantity cannot be assumed or implied.

Question 16

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

Accepted Answer

The payment of $4,000 in exchange for the use of the vessel for a month constitutes a lease agreement. The UCC defines a lease as "a transfer of the right to possession and use of goods for a term in return for consideration," which is precisely what is taking place in this scenario. Option contracts involve the granting of the right to purchase goods at a specified price within a certain time frame. A merchant's firm offer and a sale involve the transfer of ownership, which is not happening in this situation.

Question 17

County Dentists Clinic offers to buy from Dental & Medical Supplies Company a certain quantity of floss and other items for a certain price. Dental & Medical can ac-cept the offer by

Accepted Answer

Acceptance can be made through a promise to ship or prompt shipment of the goods. Any material alteration of terms by Dental & Medical Supplies Company would be considered a counteroffer and not an acceptance. A shipment of nonconforming goods with a notice of accommodation would also not be considered an acceptance as it is indicating a willingness to modify the terms of the original offer.

Question 18

GroAgri Farms offers to sell Hearty Bakeries,Inc.,fifty bushels of wheat. Hearty's representative Milena responds,"We agree to buy fifty bushels only if the wheat is Grade A quality." Between GroAgri and Hearty

Accepted Answer

Milena's statement is not an acceptance as it includes a condition (Grade A quality) which needs to be fulfilled before a contract can be formed. This means that GroAgri's offer is still open for negotiation and acceptance.

Question 19

Bram buys a bulldozer from Construction Equipment Corporation,which he leases to Earth Movers,Inc. In this situation,the lessee is

Accepted Answer

The lessee is the party who leases the equipment i.e. the one who is renting it. In this case, it is Earth Movers, Inc. Bram is the owner of the bulldozer and Construction Equipment Corporation is the seller. Therefore, the best choice is C - Earth Movers, Inc.

Question 20

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 betwee

Accepted Answer

Article 2 of the UCC applies to the sales transactions between merchants, which means that it applies to the sales transactions between New Hospital and Physicians Clinic, who are both merchants. Medico and New Hospital may also be merchants, but the contract between them may have been governed by a different set of laws or regulations. The sale between Physicians Clinic and Oscar is not between merchants, so Article 2 of the UCC would not apply to that transaction.

Quiz 20: The Formation of Sales and Lease Contracts