Question 1

Under the UCC, a modification to a contract for the sale of goods needs no consideration to be binding.

Accepted Answer

A) True 
 B)False

Question 2

Long's Department Store contracted to buy 1,000 drop-waist velour dresses in heather gray from Durham. Subsequently, Durham called and asked to ship mink-colored dresses instead of heather gray. Long agreed, in writing, to the change. Which statement is correct?

Accepted Answer

A) The modification is not enforceable since there was no consideration for the change. 
B) The modification is not enforceable since the parties are merchants. 
C) The modification is enforceable. 
D) Whether the modification is enforceable depends on the gap-filler rule. 
A) The modification is not enforceable since there was no consideration for the change. 
B) The modification is not enforceable since the parties are merchants. 
C) The modification is enforceable. 
D) Whether the modification is enforceable depends on the gap-filler rule.

Question 3

In which of the following cases is the predominant purpose the sale of goods?

Accepted Answer

A) Juanita goes to her dentist to have a cavity filled; while there, she buys a tube of whitening toothpaste the dentist sells at the front desk. 
B) Anderson makes an appointment with his stockbroker to purchase 100 shares of Microsoft stock. 
C) Millicent purchases ten bags of gravel from a landscaping company; an employee carries them to her truck and loads them for her. 
D) Thomas purchases a membership to a health club; his membership entitles him to a free bottle of water with every visit. 
A) Juanita goes to her dentist to have a cavity filled; while there, she buys a tube of whitening toothpaste the dentist sells at the front desk. 
B) Anderson makes an appointment with his stockbroker to purchase 100 shares of Microsoft stock. 
C) Millicent purchases ten bags of gravel from a landscaping company; an employee carries them to her truck and loads them for her. 
D) Thomas purchases a membership to a health club; his membership entitles him to a free bottle of water with every visit.

Question 4

Which article of the UCC covers the sale of goods?

Accepted Answer

A) Article 1 
B) Article 2 
C) Article 3 
D) Article 4 
A) Article 1 
B) Article 2 
C) Article 3 
D) Article 4

Question 5

In a "mixed contract," one involving a sale of both goods and services, the court will

Accepted Answer

A) apply the UCC to the provisions of the contract involving the sale of goods and the common law to the provisions involving the sale of services. 
B) apply the lex mercatoria to the contract. 
C) first determine the dominant purpose of the contract. If the sale of goods dominates the contract, then the court will apply the law of the UCC, Article 2. If the sale of services dominates the contract, the court will apply the common law. 
D) apply UCC Article 2A. 
A) apply the UCC to the provisions of the contract involving the sale of goods and the common law to the provisions involving the sale of services. 
B) apply the lex mercatoria to the contract. 
C) first determine the dominant purpose of the contract. If the sale of goods dominates the contract, then the court will apply the law of the UCC, Article 2. If the sale of services dominates the contract, the court will apply the common law. 
D) apply UCC Article 2A.

Question 6

Mark, a power tool salesman, promises Jill, a customer, that the Turbo Power Hedge Trimmer 1000 will easily cut through bamboo up to 3 inches thick. Mark's statement constitutes an express warranty if Jill purchases the hedge trimmer.

Accepted Answer

A) True 
 B)False

Question 7

Wanderlust gave a security interest in his Conestoga wagon to Iowa Bank who perfected its security interest by filing a financing statement with the appropriate officials in Iowa. Five months later, Wanderlust hit the trail again, moving to Montana. If Iowa Bank wants to continue its perfected interest in the Conestoga wagon, it should

Accepted Answer

A) file a continuation statement for another five years in Iowa before Wanderlust moves on. 
B) re-perfect by filing a financing statement in the appropriate place in Montana, according to Montana law, within four months of Wanderlust's entering Montana. 
C) repossess the Conestoga wagon. 
D) file a continuation statement for another four months in Iowa before Wanderlust moves on. 
A) file a continuation statement for another five years in Iowa before Wanderlust moves on. 
B) re-perfect by filing a financing statement in the appropriate place in Montana, according to Montana law, within four months of Wanderlust's entering Montana. 
C) repossess the Conestoga wagon. 
D) file a continuation statement for another four months in Iowa before Wanderlust moves on.

Question 8

Wimble ordered 1,000 pro-quality luminescent orange tennis balls from Sports Unlimited at a cost of $800. On June 1, Sports Unlimited shipped standard white tennis balls, but Wimble rejected them. Wimble bought the same number of pro-quality luminescent orange balls from another supplier the same day for $650. In a suit against Sports Unlimited, Wimble may recover $800.

Accepted Answer

A) True 
 B)False

Question 9

Article 9 of the UCC only applies to goods and does not include intangibles such as stocks, bonds or bills of lading.

Accepted Answer

A) True 
 B)False

Question 10

Bagsby owns a business selling insects for organic gardening. Bagsby is seeking a loan from First Natural Bank. The loan officer is asking that the loan be secured by Bagsby's inventory of insects, now owned or hereafter acquired. In order to do this, a new security agreement will need to be signed each time Bagsby gets new insects or sells his insects.

Accepted Answer

A) True 
 B)False

Question 11

If a seller includes an express warranty in the written sales contract, any disclaimer is invalid.

Accepted Answer

A) True 
 B)False

Question 12

In a mixed contract involving both goods and services, Article 2 of the UCC will govern if the predominant purpose is the sale of goods.

Accepted Answer

A) True 
 B)False

Question 13

Under which circumstances has the buyer accepted goods?

Accepted Answer

A) A shipment of goods was delivered to Kamala, who immediately picked up the box from her porch and placed it on her dining-room table. 
B) Peter received a shipment of 100 toy soldiers on Monday; by the end of the week, he had already sold half of them. 
C) Goods were delivered to Lao-tzu, who told the seller that he had received them; two days later, Lao-tzu informed the seller that, upon inspection, the goods were not conforming. 
D) None of these are correct. 
A) A shipment of goods was delivered to Kamala, who immediately picked up the box from her porch and placed it on her dining-room table. 
B) Peter received a shipment of 100 toy soldiers on Monday; by the end of the week, he had already sold half of them. 
C) Goods were delivered to Lao-tzu, who told the seller that he had received them; two days later, Lao-tzu informed the seller that, upon inspection, the goods were not conforming. 
D) None of these are correct.

Question 14

A buyer's material breach gives the seller the right to refuse to deliver the goods.

Accepted Answer

A) True 
 B)False

Question 15

Aubry purchased a washing machine, a freezer, and a refrigerator from Gateway Appliances on credit, giving Gateway a security interest in the appliances. The appliances were for Aubry's household use. Gateway did not file a financing statement. Six months later, Aubry had a garage sale and sold the appliances to Tam. Tam bought the appliances for her student rental property. Aubry left town owing money on the appliances. If Gateway can trace the appliances to Tam, can Gateway repossess the appliances? Explain in detail.

Accepted Answer

Yes. Generally with consumer goods, a bu

Question 16

A baseball team ordered 500 wooden baseball bats from Bats, Inc., for delivery on June 1. On May 15, the ball team received 500 aluminum bats instead of the wooden ones. As of May 16, Bats, Inc.

Accepted Answer

A) may cure before June 1. 
B) has breached the contract and is liable for damages. 
C) has breached the contract only if the baseball team rejects the goods. 
D) may cure if the baseball team gives Bats, Inc. permission to do so. 
A) may cure before June 1. 
B) has breached the contract and is liable for damages. 
C) has breached the contract only if the baseball team rejects the goods. 
D) may cure if the baseball team gives Bats, Inc. permission to do so.

Question 17

Sean of Sean's Shrimp House was enjoying a cup of cappuccino while visiting with Ollie at Ollie's Ocean Front Bar & Grill. During the course of their conversation, Sean agreed to supply 100 pounds of shrimp per month for the next year to Ollie's restaurant at the price of $2.50 per pound. When Sean got back to his office, he sent a written confirmation of the agreement to Ollie. Six weeks after receiving the confirmation Ollie wrote back, stating that he had not agreed to the price of $2.50 per pound. Is Ollie bound to the confirmation?

Accepted Answer

Probably. Shrimp is a "good," and theref

Question 18

All of the following parties had a hand in creating the UCC except

Accepted Answer

A) the U.S. Senate. 
B) the American Law Institute. 
C) the National Conference of Commissioners on Uniform State Laws. 
D) None of these are correct. 
A) the U.S. Senate. 
B) the American Law Institute. 
C) the National Conference of Commissioners on Uniform State Laws. 
D) None of these are correct.

Question 19

A tag attached to a tree in a nursery identifying the tree as a Southern Magnolia creates an express warranty.

Accepted Answer

A) True 
 B)False

Question 20

The UCC is federal legislation enacted by Congress.

Accepted Answer

A) True 
 B)False

Exam 14: The UCC: Sales and Secured Transactions

Under the UCC, a modification to a contract for the sale of goods needs no consideration to be binding.

Long's Department Store contracted to buy 1,000 drop-waist velour dresses in heather gray from Durham. Subsequently, Durham called and asked to ship mink-colored dresses instead of heather gray. Long agreed, in writing, to the change. Which statement is correct?

In which of the following cases is the predominant purpose the sale of goods?

Which article of the UCC covers the sale of goods?

In a "mixed contract," one involving a sale of both goods and services, the court will

Mark, a power tool salesman, promises Jill, a customer, that the Turbo Power Hedge Trimmer 1000 will easily cut through bamboo up to 3 inches thick. Mark's statement constitutes an express warranty if Jill purchases the hedge trimmer.

Article 9 of the UCC only applies to goods and does not include intangibles such as stocks, bonds or bills of lading.

If a seller includes an express warranty in the written sales contract, any disclaimer is invalid.

In a mixed contract involving both goods and services, Article 2 of the UCC will govern if the predominant purpose is the sale of goods.

Under which circumstances has the buyer accepted goods?

A buyer's material breach gives the seller the right to refuse to deliver the goods.

A baseball team ordered 500 wooden baseball bats from Bats, Inc., for delivery on June 1. On May 15, the ball team received 500 aluminum bats instead of the wooden ones. As of May 16, Bats, Inc.

All of the following parties had a hand in creating the UCC except

A tag attached to a tree in a nursery identifying the tree as a Southern Magnolia creates an express warranty.

The UCC is federal legislation enacted by Congress.

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