Question 1

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 the sale of

Accepted Answer

The answer of Quinn enters into a series of agreements...

Question 2

Overseas Corporation (OC), a U.S. firm, orally agrees to sell six freezers to Pisa Pizza, Ltd., in Italy. OC fails to deliver. Under the CISG, Pisa Pizza can

Accepted Answer

The CISG allows for contracts to be made orally and does not require a written agreement. The price term can be determined by any means necessary and consideration is presumed to exist in international sales contracts. Therefore, Pisa Pizza can enforce the oral agreement with OC for the sale of the freezers.

Question 3

Over the course of a year, Retail Market, Inc., sells goods from its inventory and one of its warehouses. In exchange, Retail receives checks and other items that substitute for cash, which Retail uses to repay a loan from Savers Bank. Article 2 of the UCC governs

Accepted Answer

Article 2 of the UCC governs the sale of goods, which is the primary activity of Retail Market, Inc. The other options (A, B, C) are not directly related to the sale of goods, which is what Article 2 governs.

Question 4

Rio Engineering Corporation pays PC Technologies, Inc., $1,000 to use a computer for a month. For purposes of the UCC, this is

Accepted Answer

The payment of $1,000 to use a computer for a month is considered a lease under the UCC. In a lease, the lessor allows the lessee to use the property for a specific period of time in exchange for payment. This is different from a sale, in which ownership of the property is transferred to the buyer.

Question 5

Bild-Rite, Inc., is a Colorado-based firm that does business with clients throughout North America. Bild-Rite oversees construction projects, and buys and sells commercial buildings, undeveloped land, and construction supplies and other goods. Bild-Rite has had to deal with work-site theft and vandalism. With respect to these circumstances, the Uniform Commercial Code (UCC) provides a framework for

Accepted Answer

The UCC provides a framework for commercial transactions for the sale of goods, which includes buying and selling construction supplies and other goods. It does not pertain to international construction contracts or domestic/foreign real estate transactions, nor does it provide for the prosecution of crimes.

Question 6

Sweet Tooth 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

The practice of referring to a "baker's dozen" as thirteen baked goods is an example of usage of trade, which refers to any practice or custom regularly observed in a particular industry.

Question 7

Fresh Harvest, Inc., agrees to sell to Gina's Bed & Breakfast Inn a certain amount of locally grown produce 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

The answer of Fresh Harvest, Inc., agrees to sell to...

Question 8

Valley Farms offers to sell Whole Harvest Bakeries, Inc., five hundred bushels of wheat. Whole Harvest responds, "We agree to buy five hundred bushels only if the wheat is Grade A quality." This statement is

Accepted Answer

Whole Harvest's statement is a counteroffer, because they are proposing a new or different offer than what Valley Farms initially presented. They are adding a condition to the sale, which is that the wheat must be Grade A quality. Therefore, Valley Farms now has the option to accept the counteroffer, reject it, or make their own counteroffer.

Question 9

Pressing Music, Inc., offers to buy from Digital Media Corporation (DMC) one million blank CDs of a certain quality. Without notifying Pressing, DMC timely ships CDs of a different quality. With respect to the offer and a possible contract, this shipment is

Accepted Answer

The shipment is an acceptance because DMC sent CDs in response to Pressing's offer. However, it is also a breach because DMC shipped CDs that were of a different quality than what was offered in the contract.

Question 10

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

The three-year lease of a car is considered a lease of goods, which falls under Article 2A of the UCC (Uniform Commercial Code) that governs leases of goods.

Question 11

Trina pays Urban Edge Electronics store $1,500 for a laptop computer. Under the UCC, this is

Accepted Answer

The UCC (Uniform Commercial Code) governs commercial transactions and recognizes the transfer of ownership of goods from a seller to a buyer through a sale. Therefore, Trina's payment of $1,500 for the laptop computer would be considered a sale under the UCC.

Question 12

Rally Corporation enters into a contract to sell ski gear to SnoSportz Company, which sells a pair of the skis to Tyra, a consumer, who later sells them to Uli, another consumer. Article 2 of the UCC applies to the sales transactions between

Accepted Answer

The answer of Rally Corporation enters into a contract to...

Question 13

Five Star Flooring orders carpet from Textile Mills Corporation, but Textile does not deliver. Five Star will probably be unable to enforce the agreement if the parties omitted

Accepted Answer

Without a quantity term, it is impossible to determine the amount of carpet to be delivered and therefore, impossible to determine if Textile Mills Corporation breached the contract by not delivering.

Question 14

Omni Corporation is a Pennsylvania-based firm that does business throughout the United States. With respect to this circumstance, the UCC has been adopted by, and applies in,

Accepted Answer

The UCC (Uniform Commercial Code) has been adopted by all 50 states in the United States in whole or in part. Therefore, it applies to Omni Corporation's business dealings in all states.

Question 15

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

Accepted Answer

The definition of a merchant, according to the Uniform Commercial Code, includes those who "by occupation deals in goods of the kind or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction." Therefore, the most relevant factor is whether Emory's Hobby Shop holds itself out as having knowledge or skill unique to the bike in question. The other factors are not relevant in determining whether Emory's Hobby Shop is a merchant.

Question 16

Pop Culture Clothiers, Inc., sells t-shirts to Trendwell Stores, Inc., under an existing contract. When textile costs increase, Trendwell agrees to a price increase, but later wants to cancel the contract. Trendwell may

Accepted Answer

The answer of Pop Culture Clothiers, Inc., sells t-shirts to...

Question 17

Fact Pattern 19-A1
Olisa enters into a contract to buy a stove from Pay-to-Own Appliance store with the price to be paid in monthly installments. After thirty-six months of payments, Olisa has paid more than twice the price of a similar stove. Eighteen payments remain due under the contract.
-Refer to Fact Pattern 19-A1. Olisa files a suit against Pay-to-Own, claiming that their contract is so unfair and one sided that it would be unreasonable to enforce it. Olisa is asserting

Accepted Answer

Olisa is arguing that the contract is unconscionable, meaning that it is so one-sided and oppressive that it would be unfair to enforce it. This is a valid defense under contract law.

Question 18

Sunny Glass Company and Collision Repair Center enter into a contract under which Sunny agrees to deliver a certain quantity of auto glass to Collision Repair each month. The contract does not include a price term. In a suit between the parties over the price, a court will

Accepted Answer

When a contract omits a price term, the court will generally imply a reasonable price term. Therefore, the court will determine a reasonable price.

Question 19

Fact Pattern 19-A1
Olisa enters into a contract to buy a stove from Pay-to-Own Appliance store with the price to be paid in monthly installments. After thirty-six months of payments, Olisa has paid more than twice the price of a similar stove. Eighteen payments remain due under the contract.
-Refer to Fact Pattern 19-A1. Under the UCC, the court can evaluate the contract to determine whether it was unreasonably unfair and one sided

Accepted Answer

The UCC provides that a court can evaluate a contract for unconscionability at the time it was made. In this case, Olisa has already made thirty-six monthly payments and has paid more than twice the price of the stove. Therefore, it is unclear whether Olisa could successfully argue that the contract was unconscionable at the time it was made. However, the court can evaluate the contract at that time to determine whether any provisions were unfair or one-sided.

Question 20

Cleo sells kitchen appliances to persons who come into her store, Buy n' Sell Appliances. One afternoon, Cleo sells a used display shelf to Earline. At a garage sale at her home, Cleo sells a used sofa to Flavia. Under the UCC, Cleo is a merchant of

Accepted Answer

The answer of Cleo sells kitchen appliances to persons who...

Quiz 19: The Formation of Sales and Lease Contracts

Overseas Corporation (OC) , a U.S. firm, orally agrees to sell six freezers to Pisa Pizza, Ltd., in Italy. OC fails to deliver. Under the CISG, Pisa Pizza can