Question 1

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 governs leases of goods, which includes vehicles like cars. Therefore, a lease contract for a car would be subject to Article 2A of the UCC.

Question 2

Alaskan salmon that fill the hold of Bill and Carla's fishing boat are fungible if the salmon are

Accepted Answer

Fungibility refers to the ability of one unit of a commodity to be interchangeable with another unit of the same commodity, without any difference in quality or value. Alaskan salmon that fill the hold of Bill and Carla's fishing boat are fungible if the salmon are alike naturally or by agreement or trade usage. This means that one salmon can be swapped for another salmon without causing any difference in value or quality. The other options like B, C, and D do not relate to the concept of fungibility.

Question 3

EZ Equipment Corporation leases six forklifts to Fresco Refining Company,but as the forklifts are delivered,they are lost in an explosion.Under the UCC,the parties' rights and obligations with respect to the loss depend on the concept of

Accepted Answer

The concept of risk of loss determines which party bears the loss when goods are damaged or destroyed. In this case, since the forklifts were lost in an explosion, the issue of risk of loss would determine whether EZ Equipment or Fresco Refining is responsible for the loss of the leased forklifts.

Question 4

Tasty Pastries,Inc. ,and other bakers refer to a "baker's dozen" as consisting of a collection of thirteen baked goods.This is an example of

Accepted Answer

This is an example of usage of trade, which refers to a practice or method of dealing regularly observed and followed in a particular industry or trade. In the baking industry, a "baker's dozen" is a common practice where an additional item is added to a dozen, resulting in 13 baked goods.

Question 5

Metro Daily and New City Newsstand enter into a contract under which Metro agrees to deliver a certain quantity of newspapers to New City each day.The contract does not include a price term.In a suit between the parties over the price,a court will

Accepted Answer

In contracts where no price has been specified, the court will imply a reasonable price, which will be determined based on market prices, fairness, and other relevant factors. Therefore, in this case, the court will determine a reasonable price for the newspapers.

Question 6

Ideal Gadgets,Inc. ,and Jolly Outlets Corporation enter into a contract for a sale of kitchenware.The contract requires Ideal to deliver the goods to Ladle Carrier Company for transport to Jolly's warehouse in Metro City.Risk of loss passes to Jolly when

Accepted Answer

According to the contract, risk of loss passes to Jolly when Ideal delivers the goods to Ladle Carrier Company for transport to Jolly's warehouse in Metro City.

Question 7

On behalf of Premier Shipbuilding Corporation (PSC),Rita orders 1,000 cases of 1/4-inch nuts from Steel Parts Company's 10,000-case lot.Steel Parts separates 1,000 cases from the lot.Title and risk of loss

Accepted Answer

The best choice is D because once Steel Parts separates the 1,000 cases from the lot, title and risk of loss shift to Premier Shipbuilding Corporation (PSC).

Question 8

VuTech Company agrees to sell digital video equipment to Home & Business Stores,Inc. ,for Home & Business to market to its customers.Their contract will not be enforceable unless it includes

Accepted Answer

The quantity of goods is a necessary term for a contract for the sale of goods to be enforceable under the Uniform Commercial Code (UCC).

Question 9

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

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 10

Uri sells 100 cases of vitamins to Wanda,but before she takes physical possession,the cases are lost.Under the UCC,the parties' rights and obligations with respect to the loss depend on the concept of

Accepted Answer

The parties' rights and obligations with respect to the lost vitamins depend on the concept of risk of loss. The UCC determines when the risk of loss passes from the seller to the buyer in a sales contract, and this determines which party bears the loss if the goods are lost or damaged before delivery.

Question 11

Office Equipment Leasing,Inc.(OEL),agrees to lease five computer workstations to Product Promotion Corporation (PPC).Before any interest in the workstations can pass from OEL to PPC,they must be

Accepted Answer

According to the UCC § 2-105(1), a contract for the sale of goods involves the passing of title or ownership from the seller to the buyer. Before this can happen, the goods must exist and be identified as the specific goods that are the subject of the contract. In this case, since it is a lease agreement, the same requirements apply as it involves the transfer of the right to possession and use of the goods to the lessee. Therefore, the workstations must be in existence and identified as the goods in the contract before the interest can pass from OEL to PPC.

Question 12

Timber Products,Inc. ,and Walt,a consumer,enter into a contract for a sale of plywood.If the contract includes a clause that is perceived as grossly unfair to Walt,its enforcement may be challenged under the doctrine of

Accepted Answer

The doctrine of unconscionability allows a court to refuse to enforce a contract if it is so one-sided and unfairly benefits one party over the other that it is deemed unconscionable. Therefore, if the clause in the contract that Walt perceives as grossly unfair is found to be unconscionable, he may challenge its enforcement under this doctrine.

Question 13

Lewey's Bicycle Store contracts to buy fifty bicycles from Mountain Bikes,Inc.Unless the contract states otherwise,this is

Accepted Answer

A shipment contract is a contract where the seller is responsible for delivering the goods to a carrier, and the buyer is responsible for arranging and paying for the transportation to the final destination. This is the most commonly used type of contract for the sale of goods, and unless the contract states otherwise, it is assumed to be a shipment contract where the buyer is responsible for arranging the transportation. Therefore, choice C is the best option.

Question 14

Rikki and Sid enter into a sales contract.With respect to the specific contractual provisions set out in the UCC,Rikki and Sid may

Accepted Answer

The answer of Rikki and Sid enter into a sales...

Question 15

Doctors Medical Clinic orders 1,000 bandages from Emergency Supplies Company but fails to specify the sizes.The bandages are delivered in an assortment of sizes.Doctors Medical Clinic may

Accepted Answer

Doctors Medical Clinic may accept only the bandages that it wants and reject the rest because they failed to specify the sizes, and it is the responsibility of the buyer to communicate their needs to the seller. Therefore, the seller cannot be held responsible for delivering an assortment of sizes. By accepting only the bandages needed, Doctors Medical Clinic can avoid unnecessary costs and waste.

Question 16

Raw Material,Inc. ,and Sewn Fabric Corporation enter into a contract for a sale of muslin.The terms do not clearly indicate whether it is a destination or shipment contract.A court would most likely presume that it is

Accepted Answer

When the terms of a contract for sale do not indicate whether it is a destination or shipment contract, the Uniform Commercial Code (UCC) provides a presumption that it is a shipment contract. Therefore, in this scenario, the court would most likely presume that it is a shipment contract.

Question 17

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 UCC imposes special business standards on merchants, which may be different and more detailed compared to the standards that apply to consumers. This is because merchants have expertise in their business and enter into transactions regularly, whereas consumers are not expected to have the same level of knowledge or experience.

Question 18

Kip,a representative for Lite-Weight Shipping Company,delivers a bill of lading to Meg,the owner of Capacity Storage Warehouse.A bill of lading is

Accepted Answer

The answer of Kip,a representative for Lite-Weight Shipping Company,delivers a...

Question 19

A specific grade of corn that fills BioFuel Cooperative's silo is fungible.This means that the corn is

Accepted Answer

Fungible means that the product is alike naturally or by agreement or trade usage, meaning that each unit of corn in the silo is interchangeable with any other unit of corn in the silo. This is important for trading and pricing purposes, as the quality and value of the corn is consistent throughout the silo.

Question 20

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

Accepted Answer

According to the Uniform Commercial Code (UCC), a merchant is defined as someone who holds themselves out as having knowledge or skill unique to the goods in the transaction. Therefore, the court would assess whether Elle's Hobby Shop held itself out by occupation as having knowledge or skill unique to the bike in the transaction to determine whether or not it is a merchant in this situation.

Quiz 13: The Formation of Sales and Lease Contracts