Question 1

Discuss the effect of the Uniform Commercial Code on the law of sales contracts in the area of open terms.

Accepted Answer

The UCC makes the law of sales more flexible.Negotiations with open terms may create a binding agreement under the UCC even though the same negotiations under the common law would not have created a contract.The intent of the parties to create a contract is controlling under the UCC.UCC Section 2-204(3)states,"Even though one or more terms are left open,a contact for sale does not fail for indefiniteness if the parties have intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy." The UCC will not create a contract where the parties never intended to create one.A contract may state a method for determining missing terms,but if it does not,the UCC contains "gap-filler" provisions or rules for supplying the missing terms.

Question 2

David and George have a contract wherein George agrees to buy sporting goods and equipment.Since the goods are not to be delivered for several months,they left the price open.Under the UCC,which of the following will be true?

Accepted Answer

A) The price will be the reasonable price based on fair market value of the goods at the time of delivery. 
B) David has the freedom to set any price he wants considering George was foolish enough to enter into a contract without a price established. 
C) George has the right to establish a price because he is the buyer.David should have taken steps to protect his sales interest. 
D) None of the above.The contract is not valid because the terms are not definite and certain. 
A) The price will be the reasonable price based on fair market value of the goods at the time of delivery. 
B) David has the freedom to set any price he wants considering George was foolish enough to enter into a contract without a price established. 
C) George has the right to establish a price because he is the buyer.David should have taken steps to protect his sales interest. 
D) None of the above.The contract is not valid because the terms are not definite and certain. A

Question 3

What elements are necessary for an offer to be valid? Give two examples of nonoffers.

Accepted Answer

An offer is an act or statement that proposes definite terms and permits the other party to create a contract by accepting those terms.First the offeror has to intend to make a bargain.Second the terms of the offer need to be definite.Invitations to bargain,price quotes,letters of intent,advertisements,and items on the auction block are generally not offers.

Question 4

Acme Co.offers to buy 1000 widgets from Widget World Co.The written offer provides for 1000 at $10 per widget,to be delivered May 1.The offer has no other provisions.Widget World sends a written acceptance.However,the acceptance also states that if any claim arises under this contract,Widget World must be notified within 10 days.Acme does not object to this provision.Both parties are merchants.Which of the following best describes this situation?

Accepted Answer

A) No contract exists.The purported acceptance contains additional terms,so it is a counteroffer,which has not been accepted. 
B) No contract exists if the additional terms are construed to be material terms. 
C) A contract exists.If the additional terms are construed to be material,they are not part of the contract.If the additional terms are not material,they are part of the contract. 
D) A contract exists,but the additional terms are not part of the contract no matter what. 
A) No contract exists.The purported acceptance contains additional terms,so it is a counteroffer,which has not been accepted. 
B) No contract exists if the additional terms are construed to be material terms. 
C) A contract exists.If the additional terms are construed to be material,they are not part of the contract.If the additional terms are not material,they are part of the contract. 
D) A contract exists,but the additional terms are not part of the contract no matter what.

Question 5

Nella offers to sell her crop of strawberries,which have just been picked,to Morgan's Market.Since she does not specify a time limit for acceptance,Morgan's can accept the offer the following week,as long as Nella has not revoked it.

Accepted Answer

A) True 
 B)False

Question 6

A letter of intent summarizes progress made during business negotiations,but more importantly,it creates a binding contract.

Accepted Answer

A) True 
 B)False

Question 7

McCann Construction purchased a poured concrete form from Advance Concrete Forms,Inc.McCann purchased the concrete form by placing a phone call to Advance in Madison,Wisconsin.Advance delivered the concrete form with an invoice stating the terms of the sale required payment within 30 days and a 1 1/2 % interest per month finance charge would be charged on accounts over 30 days.When McCann failed to pay the invoice on time,interest was charged according to this rate.Later,McCann refused to pay the accumulated interest charge,claiming there was not a meeting of the minds regarding the finance charge in any conversation prior to the sale.The trial court concluded that the finance charge was in fact an additional term added by Advance when it accepted McCann's purchase order.Discuss Uniform Commercial Code Section 2-207 in general and with regard to this situation.Does McCann owe the interest accrued?

Accepted Answer

Yes,he does.UCC 2-207 dramatically chang

Question 8

Regency Construction placed an order for two hundred 2 x 4s from Lumber Jack.If the place of delivery and time for shipping the goods are not specified,the UCC provides:

Accepted Answer

A) the place of delivery is Lumber Jack's and the time for delivering the lumber is a reasonable time based on normal trade practice. 
B) the place of delivery is Regency Construction and the time for shipping is within 30 days. 
C) the place of delivery is Lumber Jack's and the time for delivering the lumber is within 30 days. 
D) there is no contract because having more than one open term made the offer too indefinite. 
A) the place of delivery is Lumber Jack's and the time for delivering the lumber is a reasonable time based on normal trade practice. 
B) the place of delivery is Regency Construction and the time for shipping is within 30 days. 
C) the place of delivery is Lumber Jack's and the time for delivering the lumber is within 30 days. 
D) there is no contract because having more than one open term made the offer too indefinite.

Question 9

Nunnsky's Retail sent out newspaper inserts advertising wool suits for $50.In fact,the store had only two,out-of-style suits for sale at this price.Their other wool suits started at $175.This constitutes bad faith in its advertising,so consumers may have protection through state statutes.

Accepted Answer

A) True 
 B)False

Question 10

In seeking to determine whether there is a meeting of the minds,the courts look to how a reasonable person would objectively view the language or actions of the parties.

Accepted Answer

A) True 
 B)False

Question 11

Bob signed an agreement with Joe under which Bob agreed to purchase all the hay that Joe grew during the coming growing season.This contract will be:

Accepted Answer

A) unenforceable due to its vagueness. 
B) unenforceable due to the difficulty of devising an appropriate remedy for a breach. 
C) enforceable as long as both parties act in good faith and Bob doesn't suddenly demand more hay than what was reasonably estimated. 
D) unenforceable unless state real estate law makes an exception. 
A) unenforceable due to its vagueness. 
B) unenforceable due to the difficulty of devising an appropriate remedy for a breach. 
C) enforceable as long as both parties act in good faith and Bob doesn't suddenly demand more hay than what was reasonably estimated. 
D) unenforceable unless state real estate law makes an exception.

Question 12

Software clickwrap and shrinkwrap agreements limiting the manufacturer's maximum responsibility to a refund of the purchase price even if the software destroys your hard drive have generally been found to be binding against consumers.

Accepted Answer

A) True 
 B)False

Question 13

Floyd offers to sell his 1967 Ford Mustang convertible to Tim.Before they conclude their negotiations,Floyd dies.Which of the following is true?

Accepted Answer

A) Floyd's heirs must sell the car to Tim. 
B) Floyd's heirs must continue to negotiate the offer and sell the car,if a reasonable price can be determined. 
C) The offer terminates automatically upon Floyd's death. 
D) There is a contract if Tim accepts before learning of Floyd's death. 
A) Floyd's heirs must sell the car to Tim. 
B) Floyd's heirs must continue to negotiate the offer and sell the car,if a reasonable price can be determined. 
C) The offer terminates automatically upon Floyd's death. 
D) There is a contract if Tim accepts before learning of Floyd's death.

Question 14

Seth told the salesperson at Outdoor Times that he wanted the sleeping bag that was advertised in the Sunday paper;one that would keep him comfortable if the temperature drops to 10 degrees Fahrenheit.The salesperson told Seth they were sold out of that bag,but there were two other styles that would meet his needs and were the same price.Seth insisted he wanted the advertised bag and threatened to sue for breach of contract.Which is true?

Accepted Answer

A) Outdoor Times is guilty of "bait and swap." 
B) Seth will prevail in his case,as Outdoor Times is responsible for having sufficient stock of advertised items. 
C) Seth will not prevail,as the advertisement was simply an invitation to negotiate. 
D) Outdoor Times must provide Seth with a raincheck,ensuring he can buy the same bag at the sales price at a later date. 
A) Outdoor Times is guilty of "bait and swap." 
B) Seth will prevail in his case,as Outdoor Times is responsible for having sufficient stock of advertised items. 
C) Seth will not prevail,as the advertisement was simply an invitation to negotiate. 
D) Outdoor Times must provide Seth with a raincheck,ensuring he can buy the same bag at the sales price at a later date.

Question 15

Revocation is the withdrawal of an offer by the offeror.

Accepted Answer

A) True 
 B)False

Question 16

Collector Carl displays his beer can collection at the local swap meet.Mary sees the collection and is interested in buying it.Carl says he will sell the collection for $1,500.Mary says she really likes the collection but is only willing to pay $1,000.Which of the following is correct?

Accepted Answer

A) Mary's counteroffer terminates Carl's offer of $1,500. 
B) If Carl rejects Mary's counteroffer,she can still accept Carl's offer of $1,500. 
C) Neither offer is valid.Who would ever pay $1,000 or $1,500 for a beer can collection? 
D) Mary's offer is a firm offer.Carl has an exclusive right to consider her offer for a reasonable period of time. 
A) Mary's counteroffer terminates Carl's offer of $1,500. 
B) If Carl rejects Mary's counteroffer,she can still accept Carl's offer of $1,500. 
C) Neither offer is valid.Who would ever pay $1,000 or $1,500 for a beer can collection? 
D) Mary's offer is a firm offer.Carl has an exclusive right to consider her offer for a reasonable period of time.

Question 17

Wally owns 200 acres of land.Wally offers to sell the land to Robert for $1,500 per acre.Robert replies that he does not need 200 acres of land but would like to buy 40 acres at $1,500 per acre.Wally agrees to sell but does not identify which 40 acres.Later,Wally refuses to sell any land to Robert.What is the result?

Accepted Answer

A) Robert wins;this is an enforceable contract with complete and definite terms. 
B) Robert wins;the UCC will decide which 40 acres are to be sold. 
C) Wally wins;the original offer was not intended to be an offer but merely an invitation to negotiate. 
D) Wally wins;this agreement is too indefinite since it does not identify which 40 acres are to be sold. 
A) Robert wins;this is an enforceable contract with complete and definite terms. 
B) Robert wins;the UCC will decide which 40 acres are to be sold. 
C) Wally wins;the original offer was not intended to be an offer but merely an invitation to negotiate. 
D) Wally wins;this agreement is too indefinite since it does not identify which 40 acres are to be sold.

Question 18

On Monday,Mick puts an offer in the mail to Sheri to sell his guitar for $50.Monday night when jamming with his buddies,he decides he will really miss his old guitar and has second thoughts about selling it.Tuesday morning he puts a revocation in the mail informing Sheri he has changed his mind and the guitar is no longer for sale.The revocation is effective on Tuesday morning.

Accepted Answer

A) True 
 B)False

Question 19

John owns a thoroughbred horse named Prince Charming that just ran in the Kentucky Derby.Prince Charming came in last,much to John's frustration and embarrassment.John exclaims in a loud voice,"I'm selling that horse to the first person who hands me $100 bucks!" John has:

Accepted Answer

A) made an offer to anyone within hearing distance and will be bound by his offer to the first person who produces $100. 
B) made a firm offer and will be bound by his offer for a reasonable period of time. 
C) made an acceptance to the first person who can produce $100. 
D) not made an offer because under the circumstances a reasonable person would not conclude that John had intent to make an offer. 
A) made an offer to anyone within hearing distance and will be bound by his offer to the first person who produces $100. 
B) made a firm offer and will be bound by his offer for a reasonable period of time. 
C) made an acceptance to the first person who can produce $100. 
D) not made an offer because under the circumstances a reasonable person would not conclude that John had intent to make an offer.

Question 20

April put an advertisement in the newspaper advertising the sale of her computer for $500.Simultaneously,six people responded to the ad by mail with formal written acceptances.April is bound on all six contracts to sell her computer for $500.

Accepted Answer

A) True 
 B)False

Exam 10: Agreement

Discuss the effect of the Uniform Commercial Code on the law of sales contracts in the area of open terms.

David and George have a contract wherein George agrees to buy sporting goods and equipment.Since the goods are not to be delivered for several months,they left the price open.Under the UCC,which of the following will be true?

What elements are necessary for an offer to be valid? Give two examples of nonoffers.

Nella offers to sell her crop of strawberries,which have just been picked,to Morgan's Market.Since she does not specify a time limit for acceptance,Morgan's can accept the offer the following week,as long as Nella has not revoked it.

A letter of intent summarizes progress made during business negotiations,but more importantly,it creates a binding contract.

Regency Construction placed an order for two hundred 2 x 4s from Lumber Jack.If the place of delivery and time for shipping the goods are not specified,the UCC provides:

Nunnsky's Retail sent out newspaper inserts advertising wool suits for $50.In fact,the store had only two,out-of-style suits for sale at this price.Their other wool suits started at $175.This constitutes bad faith in its advertising,so consumers may have protection through state statutes.

In seeking to determine whether there is a meeting of the minds,the courts look to how a reasonable person would objectively view the language or actions of the parties.

Bob signed an agreement with Joe under which Bob agreed to purchase all the hay that Joe grew during the coming growing season.This contract will be:

Software clickwrap and shrinkwrap agreements limiting the manufacturer's maximum responsibility to a refund of the purchase price even if the software destroys your hard drive have generally been found to be binding against consumers.

Floyd offers to sell his 1967 Ford Mustang convertible to Tim.Before they conclude their negotiations,Floyd dies.Which of the following is true?

Revocation is the withdrawal of an offer by the offeror.

Collector Carl displays his beer can collection at the local swap meet.Mary sees the collection and is interested in buying it.Carl says he will sell the collection for $1,500.Mary says she really likes the collection but is only willing to pay $1,000.Which of the following is correct?

John owns a thoroughbred horse named Prince Charming that just ran in the Kentucky Derby.Prince Charming came in last,much to John's frustration and embarrassment.John exclaims in a loud voice,"I'm selling that horse to the first person who hands me $100 bucks!" John has:

April put an advertisement in the newspaper advertising the sale of her computer for $500.Simultaneously,six people responded to the ad by mail with formal written acceptances.April is bound on all six contracts to sell her computer for $500.

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