Question 1

When courts interpret sales and lease contracts, how do they prioritize the combination of the following four factors?

Accepted Answer

A)  (1) Express terms, (2) Course of performance, (3) Course of dealing, and (4) Usage of trade 
B)  (1) Usage of trade, (2) Course of performance, (3) Course of dealing, and (4) Express terms 
C)  (1) Express terms, (2) Course of dealing, (3) Course of performance, and (4) Usage of trade 
D)  (1) Course of performance, (2) Course of dealing, (3) Express terms, and (4) Usage of trade 
E)  (1) Express terms, (2) Usage of trade, (3) Course of dealing, and (4) Course of performance 
A)  (1) Express terms, (2) Course of performance, (3) Course of dealing, and (4) Usage of trade 
B)  (1) Usage of trade, (2) Course of performance, (3) Course of dealing, and (4) Express terms 
C)  (1) Express terms, (2) Course of dealing, (3) Course of performance, and (4) Usage of trade 
D)  (1) Course of performance, (2) Course of dealing, (3) Express terms, and (4) Usage of trade 
E)  (1) Express terms, (2) Usage of trade, (3) Course of dealing, and (4) Course of performance

Question 2

Under Article 2(A) of the UCC, what is the correct term for a person who acquires the right to possession and use of goods under a lease?

Accepted Answer

A)  Buyer 
B)  Seller 
C)  Lessee 
D)  Lessor 
E)  Acquirer 
A)  Buyer 
B)  Seller 
C)  Lessee 
D)  Lessor 
E)  Acquirer

Question 3

Article 2 of the UCC defines ________ as tangible things which are movable at the time of identification to the contract for sale.

Accepted Answer

A)  Merchandise 
B)  Attachments 
C)  Goods 
D)  Personable Property 
E)  Sales Items 
A)  Merchandise 
B)  Attachments 
C)  Goods 
D)  Personable Property 
E)  Sales Items

Question 4

The UCC has different rules for transactions involving merchants and transactions involving nonmerchants.

Accepted Answer

A) True 
 B)False

Question 5

Under the UCC, since both Leyland and Melanie are merchants, when Leyland sends his acceptance to Melanie's contract terms, when would his acceptance be effective?

Accepted Answer

A)  When Leyland dispatches it. 
B)  When it is received by Melanie. 
C)  When received by Melanie but only if acceptance by electronic means is made, otherwise on dispatch. 
D)  When Leyland dispatched it but only if the U.S. mail is used, otherwise on receipt. 
E)  When Leyland dispatched it but only when the telephone is used, otherwise on receipt. 
A)  When Leyland dispatches it. 
B)  When it is received by Melanie. 
C)  When received by Melanie but only if acceptance by electronic means is made, otherwise on dispatch. 
D)  When Leyland dispatched it but only if the U.S. mail is used, otherwise on receipt. 
E)  When Leyland dispatched it but only when the telephone is used, otherwise on receipt.

Question 6

Which of the following is true regarding Chinese law?

Accepted Answer

A)  China currently has legislation that covers the sale of goods, the provision of services, and leases. 
B)  China currently has legislation that covers the sale of goods and the provision of services, but no legislation that covers leases. 
C)  China currently has legislation that covers the sale of goods, but not the provision of services or leases. 
D)  China currently has legislation that covers leases, but not the provision of services or the sale of goods. 
E)  China has legislation that covers leases and the sale of goods, but not the provision of services. 
A)  China currently has legislation that covers the sale of goods, the provision of services, and leases. 
B)  China currently has legislation that covers the sale of goods and the provision of services, but no legislation that covers leases. 
C)  China currently has legislation that covers the sale of goods, but not the provision of services or leases. 
D)  China currently has legislation that covers leases, but not the provision of services or the sale of goods. 
E)  China has legislation that covers leases and the sale of goods, but not the provision of services.

Question 7

Under the UCC, items are tangible if they ________.

Accepted Answer

A)  are on paper 
B)  are stock options 
C)  are able to be ascertained in a writing 
D)  exist physically 
E)  are saleable 
A)  are on paper 
B)  are stock options 
C)  are able to be ascertained in a writing 
D)  exist physically 
E)  are saleable

Question 8

According to Exhibit 21-6 of the text, which of the following statements about material terms under the UCC and the common law is true?

Accepted Answer

A)  Under both UCC and common law, all material terms must be specified in the contract. 
B)  Under both UCC and common law, material terms may be left open for subsequent determination by the parties. 
C)  Under both UCC and common law, all material terms other than price must be specified in the contract. 
D)  Under the UCC, all material terms must be specified in the contract, but under common law, material terms may be left open. 
E)  Under common law, all material terms must be specified in the contract, but under the UCC, material terms may be left open. 
A)  Under both UCC and common law, all material terms must be specified in the contract. 
B)  Under both UCC and common law, material terms may be left open for subsequent determination by the parties. 
C)  Under both UCC and common law, all material terms other than price must be specified in the contract. 
D)  Under the UCC, all material terms must be specified in the contract, but under common law, material terms may be left open. 
E)  Under common law, all material terms must be specified in the contract, but under the UCC, material terms may be left open.

Question 9

[Dress Shop Problems] Lara, who has a ladies' dress shop, reached an oral agreement with Kim, a wholesaler, to purchase 100 dresses for $80 each, with the dresses to be delivered within 30 days. Kim later orally agreed to a modification whereby she would add ten belts to go along with certain dresses at no extra charge. Kim did so because she wanted to maintain Lara's good will. Lara sent Kim a memo confirming their oral agreement, including the modification, but heard nothing. When the dresses did not arrive within 30 days, Lara checked with Kim. Kim told her that their agreement was no good because Kim never signed anything and that the UCC does not apply in the retail arena.
-Which of the following is true regarding Kim's statement that the UCC does not apply in the retail arena?

Accepted Answer

A)  Kim is correct in that the UCC does not apply in the retail arena. 
B)  Kim is partially correct. The UCC does not apply in the retail arena if the parties have had significant past dealings under common law. 
C)  Kim is partially correct. The UCC does not apply in the retail arena if the parties are located in the same state. 
D)  Kim is partially correct. The UCC does not apply in the retail arena if the contract at issue is for an amount under $10,000. 
E)  Kim is incorrect. 
A)  Kim is correct in that the UCC does not apply in the retail arena. 
B)  Kim is partially correct. The UCC does not apply in the retail arena if the parties have had significant past dealings under common law. 
C)  Kim is partially correct. The UCC does not apply in the retail arena if the parties are located in the same state. 
D)  Kim is partially correct. The UCC does not apply in the retail arena if the contract at issue is for an amount under $10,000. 
E)  Kim is incorrect.

Question 10

________ are contracts that combine a good with a service.

Accepted Answer

A)  Combined sales 
B)  Mixed sales 
C)  Sales agreements 
D)  Goods contracts 
E)  Total contracts 
A)  Combined sales 
B)  Mixed sales 
C)  Sales agreements 
D)  Goods contracts 
E)  Total contracts

Question 11

The most important focus of the UCC in determining contract formation is the intent of the parties to be bound by the contract.

Accepted Answer

A) True 
 B)False

Question 12

[Lucky Morton] Morton, who owns 500 acres of land in east Texas, has just discovered oil under his property. He calls OilEx, who wants to buy all of the oil from Morton's property. Morton is thrilled about the money he will make from selling the oil and he signs a contract allowing OilEx to set up a drilling station on his property. Thinking he can get more money off his land, Morton cuts down all of his trees with a chainsaw and then sells them to PaperCo to be made into paper. Meanwhile, Morton's neighbor offers to buy Morton's wheat crop after it is harvested in the Fall, and Morton agrees.
-Is Morton's contract for Winslow to purchase his wheat crop covered by the UCC?

Accepted Answer

A)  No, because the wheat is still growing and affixed to the land, and land sales are covered by common law. 
B)  No, because crops are not considered goods. 
C)  Yes, but only if Morton sells Winslow the right to come onto his property and remove the wheat. 
D)  Yes, but only if Morton cuts them down and then sells them to Winslow. 
E)  Yes, because crops that are sold while still growing in the field are considered goods. 
A)  No, because the wheat is still growing and affixed to the land, and land sales are covered by common law. 
B)  No, because crops are not considered goods. 
C)  Yes, but only if Morton sells Winslow the right to come onto his property and remove the wheat. 
D)  Yes, but only if Morton cuts them down and then sells them to Winslow. 
E)  Yes, because crops that are sold while still growing in the field are considered goods.

Question 13

Which article of the UCC governs lease contracts?

Accepted Answer

A)  2 
B)  2(
A)  
C)  4 
D)  4(
A)  
E)  6 
A)  2 
B)  2(
A)  
C)  4 
D)  4(
A)  
E)  6

Question 14

Under the UCC, a contract for the sale of goods valued at $500 or more ________.

Accepted Answer

A)  must be in writing in order to be enforceable 
B)  must be on a special form 
C)  is considered a mixed sale 
D)  must be purchased by credit 
E)  is an irrevocable sale 
A)  must be in writing in order to be enforceable 
B)  must be on a special form 
C)  is considered a mixed sale 
D)  must be purchased by credit 
E)  is an irrevocable sale

Question 15

[Customer Uncertainty] Luke wanted baseball caps with the name of the firm of which he was president, ABC Corporation, emblazoned on the front. Emilia, a merchant in specialized goods, orally agreed with Luke that she would sell him 200 baseball caps at $5 each. No writing was ever made, although there were a number of witnesses to the conversation. After the caps were finished, but before they were shipped, Luke called to cancel the order because his firm had just announced a merger and would no longer be known as ABC Corporation. Emilia told him she would not cancel the contract because she had just finished the caps. Luke told Emilia that she should have been smarter and had him sign something because without a writing, she would not have a chance in court. Emilia is also having problems with other customers. A father who voluntarily coached a youth softball league in his community called and orally ordered 150 baseball caps at a cost of $4 to give out at a league banquet. He wanted a variety of caps with no name on them because players from different teams would be at the banquet. Emilia sent a confirmation letter to the coach and had the caps packed up and ready to go. Just before she shipped them, the coach called and told her that there was a big feud, the banquet was canceled, and that he was canceling the order. She believes that the coach should pay damages, especially because a big order was involved. Finally, Emilia has a merchant customer who orally ordered 500 plain T-shirts at a cost of $5 each, but has not picked them up and has refused to do so after several demands. Emilia wants to take the merchant customer to small claims court.
-Which of the following is correct regarding Luke's assertion that Emilia cannot recover the cost of the caps?

Accepted Answer

A)  Luke is correct. Emilia cannot recover because she has nothing in writing. 
B)  Luke is incorrect because the cost of the caps is insufficient to come within the requirement of a writing under the UCC. 
C)  Luke is incorrect because Emilia has witnesses. 
D)  Luke is incorrect because Emilia had already made the caps and she cannot sell them to another buyer. 
E)  Luke is incorrect both because Emilia had already made the caps and also because she had witnesses. 
A)  Luke is correct. Emilia cannot recover because she has nothing in writing. 
B)  Luke is incorrect because the cost of the caps is insufficient to come within the requirement of a writing under the UCC. 
C)  Luke is incorrect because Emilia has witnesses. 
D)  Luke is incorrect because Emilia had already made the caps and she cannot sell them to another buyer. 
E)  Luke is incorrect both because Emilia had already made the caps and also because she had witnesses.

Question 16

Is Aranda correct that full payment should be made at the time of delivery?

Accepted Answer

A)  Yes, because the UCC requires "reasonable payment terms" to be supplied at the time of delivery. 
B)  Yes, since the terms of payment were left open, payment is due at the time and place at which the buyer is to receive the goods. 
C)  No, because all material terms must be specified. 
D)  No, because of the mirror image rule. 
E)  No, because the statute of frauds requires payment terms to be in writing. 
A)  Yes, because the UCC requires "reasonable payment terms" to be supplied at the time of delivery. 
B)  Yes, since the terms of payment were left open, payment is due at the time and place at which the buyer is to receive the goods. 
C)  No, because all material terms must be specified. 
D)  No, because of the mirror image rule. 
E)  No, because the statute of frauds requires payment terms to be in writing.

Question 17

The Uniform Internet Act was adopted by the National Conference of Commissioners on Uniform State Laws in order to answer questions involving Internet sales issues.

Accepted Answer

A) True 
 B)False

Question 18

The UCC recognizes something called the battle of the forms.

Accepted Answer

A) True 
 B)False

Question 19

[Customer Uncertainty] Luke wanted baseball caps with the name of the firm of which he was president, ABC Corporation, emblazoned on the front. Emilia, a merchant in specialized goods, orally agreed with Luke that she would sell him 200 baseball caps at $5 each. No writing was ever made, although there were a number of witnesses to the conversation. After the caps were finished, but before they were shipped, Luke called to cancel the order because his firm had just announced a merger and would no longer be known as ABC Corporation. Emilia told him she would not cancel the contract because she had just finished the caps. Luke told Emilia that she should have been smarter and had him sign something because without a writing, she would not have a chance in court. Emilia is also having problems with other customers. A father who voluntarily coached a youth softball league in his community called and orally ordered 150 baseball caps at a cost of $4 to give out at a league banquet. He wanted a variety of caps with no name on them because players from different teams would be at the banquet. Emilia sent a confirmation letter to the coach and had the caps packed up and ready to go. Just before she shipped them, the coach called and told her that there was a big feud, the banquet was canceled, and that he was canceling the order. She believes that the coach should pay damages, especially because a big order was involved. Finally, Emilia has a merchant customer who orally ordered 500 plain T-shirts at a cost of $5 each, but has not picked them up and has refused to do so after several demands. Emilia wants to take the merchant customer to small claims court.
-Which of the following is true regarding Emilia's assertion that she should be allowed to recover from the baseball coach?

Accepted Answer

A)  Based upon the facts given, Emilia cannot recover because the coach was not a merchant in regards to the transaction and had not signed anything showing that he was to be charged for the caps. 
B)  Emilia can recover because she sent the coach a confirmation letter, and he did not object within 10 days of receipt. 
C)  Emilia can recover because she sent the coach a confirmation letter, and he did not object within 20 days of receipt. 
D)  Emilia can recover because the transaction was not covered by the UCC. 
E)  Emilia can recover only if she can prove by testimony of a witness that the coach received the confirmation letter and read it. 
A)  Based upon the facts given, Emilia cannot recover because the coach was not a merchant in regards to the transaction and had not signed anything showing that he was to be charged for the caps. 
B)  Emilia can recover because she sent the coach a confirmation letter, and he did not object within 10 days of receipt. 
C)  Emilia can recover because she sent the coach a confirmation letter, and he did not object within 20 days of receipt. 
D)  Emilia can recover because the transaction was not covered by the UCC. 
E)  Emilia can recover only if she can prove by testimony of a witness that the coach received the confirmation letter and read it.

Question 20

Under Article 2(A) of the UCC, the ________ is the person who transfers the right to possession and use of goods under a lease.

Accepted Answer

A)  lessor 
B)  lessee 
C)  assignor 
D)  agent 
E)  actuary 
A)  lessor 
B)  lessee 
C)  assignor 
D)  agent 
E)  actuary

Exam 21: Introduction to Sales and Lease Contracts

When courts interpret sales and lease contracts, how do they prioritize the combination of the following four factors?

Under Article 2(A) of the UCC, what is the correct term for a person who acquires the right to possession and use of goods under a lease?

Article 2 of the UCC defines ________ as tangible things which are movable at the time of identification to the contract for sale.

The UCC has different rules for transactions involving merchants and transactions involving nonmerchants.

Under the UCC, since both Leyland and Melanie are merchants, when Leyland sends his acceptance to Melanie's contract terms, when would his acceptance be effective?

Which of the following is true regarding Chinese law?

Under the UCC, items are tangible if they ________.

According to Exhibit 21-6 of the text, which of the following statements about material terms under the UCC and the common law is true?

________ are contracts that combine a good with a service.

The most important focus of the UCC in determining contract formation is the intent of the parties to be bound by the contract.

Which article of the UCC governs lease contracts?

Under the UCC, a contract for the sale of goods valued at $500 or more ________.

Is Aranda correct that full payment should be made at the time of delivery?

The Uniform Internet Act was adopted by the National Conference of Commissioners on Uniform State Laws in order to answer questions involving Internet sales issues.

The UCC recognizes something called the battle of the forms.

Under Article 2(A) of the UCC, the ________ is the person who transfers the right to possession and use of goods under a lease.

An Introduction to Dynamic Business Law

Business Ethics

The Us Legal System

Alternative Dispute Resolution

Constitutional Principles

International and Comparative Law

Crime and the Business Community

Tort Law

Negligence and Strict Liability

Product Liability

Liability of Accountants and Other Professionals

Intellectual Property

Introduction to Contracts

Agreement

Consideration

Capacity and Legality

Legal Assent

Contracts in Writing

Third-Party Rights to Contracts

Discharge and Remedies

Title, Risk of Loss, and Insurable Interest

Performance and Obligations Under Sales and Leases

Remedies for Breach of Sales and Lease Contracts

Warranties

Negotiable Instruments: Negotiability and Transferability

Negotiation, Holder in Due Course, and Defenses

Liability, Defenses, and Discharge

Checks and Electronic Fund Transfers

Secured Transactions

Other Creditors Remedies and Suretyship

Bankruptcy and Reorganization

Agency Formation and Duties

Liability to Third Parties and Termination

Forms of Business Organization

Partnerships: Nature, Formation, and Operation

Partnerships: Termination and Limited Partnerships

Corporations: Formation and Financing

Corporations: Directors, Officers, and Shareholders

Corporations: Mergers, Consolidations, Terminations

Corporations: Securities and Investor Protection

Employment and Labor Law

Employment Discrimination

Administrative Law

Consumer Law

Environmental Law

Antitrust Law

The Nature of Property, Personal Property, and Bailments

Real Property

Landlord-Tenant Law

Insurance Law

Wills and Trusts

Filters