Exam 13: Sales Contracts: Formation,title,and Risk of Loss

Massive Equipment Company sends machinery on approval to Mountain Moving Company.While in possession of the machinery,but prior to acceptance,Mountain becomes insolvent.The machinery is subject to the claims of Mountain's creditors.

A(n)________ can make a(n)________ because it deals in ________ in the ordinary course of business or has knowledge or skills peculiar to those goods.

Seth was the highest bidder for an antique chest at an auction sale.There was nothing to indicate whether the auction was with or without reserve.The auctioneer withdrew the chest from the auction without accepting Seth's bid because the bid was too low.Is the auctioneer legally entitled to withdraw the chest from the sale? Explain.

While 25 tractor mowers from the John Deere distribution center in Des Moines,Iowa were being shipped via shipment contract by EXpress Trucking to the Home Depot in Little Rock,Arkansas,the truck carrying the shipment was hijacked and all the mowers stolen.Since the mowers were being shipped by a shipment contract,EXpress bears the risk of loss.

A document of title allows the person who possesses it to:

Sellers always retain an insurable interest in the goods,even if they do not have title to them.

Alaskan Seafood Enterprises Inc. ,a wholesaler of fresh fish,agrees with Red Lobster Inc.to sell 12 boxes of fresh-caught lobsters at 'market value.' The contract is unenforceable because the UCC requires a price for the goods.

If the seller is not a merchant,the risk of loss passes to the buyer when the seller tenders the goods to the carrier.

Buyers obtain an insurable interest even though they might later reject or return the goods to the seller.

If both parties are merchants,the UCC modifies the common law "________" rule,by allowing ________ terms to become a part of the contract,unless they ________ change it.

The purchasing manager of Ethan Wholesale Furniture,Inc.sends an e-mail to the CEO of Ashley Furniture,Inc.promising to sell new couches for a total of $5,000,and to keep the offer open for 30 days.The promise is unenforceable because there is no consideration.

The main issue in the Classic Case of XCEL v.DeVault involved a question as to whether XCEL's shipment of conforming goods acted as an acceptance of DeVault's purchase order.

Joe leaves his $25,000 Rolex watch with Zayer's Jewelers to be cleaned and maintained.When the watch or jewelry is ready to be picked up,Zayer's usually displays it in a special counter.One day during a special sale,Mary comes into Zayer's and inquires about the watch and is told the watch is on sale for only $18,500.If Zayer's sells the watch to Mary,Joe has a cause of action against both Zayer's and Mary to recover the watch.

________ goods are those that are in accordance with the obligations under the contract.

The Emmett School District (ESD)contracts with the GoldenFarms Dairy for "all of the milk" GoldenFarms can produce during ESD's current school year.The contract specifies a price,but no exact quantity of milk to be purchased is set in the contract.This contract is a(n):

Sun Supply Co.offered to sell Apartment Management Inc.air conditioner filters at $15 per case in a signed writing that stated the price was good for sixty days.Apartment Management discovered that other sellers charge $20 per case for identical air conditioner filters,but before it can accept Sun Supply's offer,Sun Supply withdrew the offer after only 30 days,stating that changed market conditions had forced it to charge more.Discuss the case.

In an ________,after the auctioneer calls for bids on an article or lot,that article or lot cannot be withdrawn unless no bid is made within a reasonable time.

Braxton has a contract to deliver 500 cases of green beans to CostLess Wholesalers for $10,000.He sells CostLess the beans that he acquired through allegation of fraud from another vendor.If true,then Mary,who is another vendor,has voidable title to the green beans and can void the title to the green beans if she chooses to do so.However,she cannot sell the goods to her customers because of the clouded title.

Which of the following is true of insurable interest?

Lucky Used Cars,using their contracts form,agree to sell Alvin a truck for $5,000.The contract provides that it may not be modified-except by a signed writing.After entering into the contract,Lucky and Alvin orally agree that Lucky will include new floor mats and a bed liner for an extra $100.At the time of delivery,Lucky refuses to provide the new floor mats and bed liner unless Alvin pays an extra $250.Discuss the enforceability of the oral agreement Lucky and Alvin had.