Question 1

The standard for rejection requires that any defect in the good be material.

Accepted Answer

A) True 
 B)False  False

Question 2

When goods are shipped COD:

Accepted Answer

A)  the buyer always has the right to examine them before making payment. 
B)  the underlying contract must specify when the buyer may inspect the goods. 
C)  the buyer has no right to examine the goods until payment is made. 
D)  the buyer gives up all rights to inspection of the goods. 
A)  the buyer always has the right to examine them before making payment. 
B)  the underlying contract must specify when the buyer may inspect the goods. 
C)  the buyer has no right to examine the goods until payment is made. 
D)  the buyer gives up all rights to inspection of the goods. C

Question 3

In January, a buyer and a seller agreed on the sale of 10,000 pounds of tomatoes to be delivered on July 1. The contract stated that the seller would set the price on June 15 and that the buyer would pay the price on delivery. On June 15, the market price of tomatoes was approximately 75 cents per pound. The seller set the price at $1.50 per pound and the buyer demanded that the price be lowered.
When the parties could not agree, a lawsuit developed. The key issue was whether the seller had the right to set the $1.50 price. Decide.

Accepted Answer

Each party to a sales contract is required to act in good faith. For a merchant, the requirement of good faith includes observing reasonable commercial standards of fair dealing. In this case, when the market price was 75 cents, the seller was arguably not acting in good faith when it established a price of $1.50. Assuming the court concludes that the buyer was not acting in good faith in setting an unreasonably high price, the merchant will be deemed to have breached the contract.

Question 4

If a buyer accepts goods but later claims the goods suffered from a substantial impairment, he is:

Accepted Answer

A)  only required to prove the goods do not conform to the contract. 
B)  only required to prove the goods are shown to be worthless. 
C)  only required to prove the use to the buyer is materially different than the contract promised. 
D)  automatically canceling the contract. 
A)  only required to prove the goods do not conform to the contract. 
B)  only required to prove the goods are shown to be worthless. 
C)  only required to prove the use to the buyer is materially different than the contract promised. 
D)  automatically canceling the contract.

Question 5

When a method of transportation called for by a contract becomes unavailable for any reason, the contract is automatically voided.

Accepted Answer

A) True 
 B)False

Question 6

All of the following can be considered an acceptance by the buyer except:

Accepted Answer

A)  An express statement of approval by the buyer. 
B)  The buyer's examination of the goods. 
C)  The buyer's retention of goods for an unreasonable period of time. 
D)  The buyer's modification of the goods. 
A)  An express statement of approval by the buyer. 
B)  The buyer's examination of the goods. 
C)  The buyer's retention of goods for an unreasonable period of time. 
D)  The buyer's modification of the goods.

Question 7

Unless otherwise agreed by the parties, payment by a buyer requires payment either in cash or by certified check.

Accepted Answer

A) True 
 B)False

Question 8

If a party refuses to perform a contract when the time for performance arises, the other party has the right to seek assurances.

Accepted Answer

A) True 
 B)False

Question 9

To be adequate, after a proper demand an assurance of performance must:

Accepted Answer

A)  include consideration. 
B)  allow for the additional examination of the goods. 
C)  be sufficient to assure a reasonable person that the contract will be performed. 
D)  be written. 
A)  include consideration. 
B)  allow for the additional examination of the goods. 
C)  be sufficient to assure a reasonable person that the contract will be performed. 
D)  be written.

Question 10

A party to a sales contract who is afraid that the other party will not perform may seek some form of:

Accepted Answer

A)  bailment. 
B)  security. 
C)  assurances. 
D)  assignment. 
A)  bailment. 
B)  security. 
C)  assurances. 
D)  assignment.

Question 11

The standard for determining commercial impracticability is objective, not subjective.

Accepted Answer

A) True 
 B)False

Question 12

In a cash sale that does not require the physical moving of the goods, the:

Accepted Answer

A)  parties are required to perform concurrently. 
B)  seller is required to tender the goods before the buyer must pay for them. 
C)  buyer must pay for the goods in advance. 
D)  buyer must actually receive the goods before he or she is required to pay for them. 
A)  parties are required to perform concurrently. 
B)  seller is required to tender the goods before the buyer must pay for them. 
C)  buyer must pay for the goods in advance. 
D)  buyer must actually receive the goods before he or she is required to pay for them.

Question 13

When a contract to sell identified goods does not specify a place of delivery, the goods are considered delivered at the seller's place of business.

Accepted Answer

A) True 
 B)False

Question 14

The statement, "I doubt that I can perform the contract," is a repudiation of the contract.

Accepted Answer

A) True 
 B)False

Question 15

A buyer has the right to accept some commercial units of a shipment and reject other commercial units.

Accepted Answer

A) True 
 B)False

Question 16

Unless otherwise specified, the place of delivery is the seller's place of business.

Accepted Answer

A) True 
 B)False

Question 17

Under Revised Article 2, a repudiation occurs when the repudiating party furnishes a record with express language of repudiation.

Accepted Answer

A) True 
 B)False

Question 18

The UCC requires assurances to be in writing and signed by the company President.

Accepted Answer

A) True 
 B)False

Question 19

The UCC does not specify the form that the assurance of performance is to take.

Accepted Answer

A) True 
 B)False

Question 20

The seller's right to cure a defective tender means that the seller will be given a second chance to make a proper tender of conforming goods.

Accepted Answer

A) True 
 B)False

Exam 25: Obligations and Performance

The standard for rejection requires that any defect in the good be material.

When goods are shipped COD:

If a buyer accepts goods but later claims the goods suffered from a substantial impairment, he is:

When a method of transportation called for by a contract becomes unavailable for any reason, the contract is automatically voided.

All of the following can be considered an acceptance by the buyer except:

Unless otherwise agreed by the parties, payment by a buyer requires payment either in cash or by certified check.

If a party refuses to perform a contract when the time for performance arises, the other party has the right to seek assurances.

To be adequate, after a proper demand an assurance of performance must:

A party to a sales contract who is afraid that the other party will not perform may seek some form of:

The standard for determining commercial impracticability is objective, not subjective.

In a cash sale that does not require the physical moving of the goods, the:

When a contract to sell identified goods does not specify a place of delivery, the goods are considered delivered at the seller's place of business.

The statement, "I doubt that I can perform the contract," is a repudiation of the contract.

A buyer has the right to accept some commercial units of a shipment and reject other commercial units.

Unless otherwise specified, the place of delivery is the seller's place of business.

Under Revised Article 2, a repudiation occurs when the repudiating party furnishes a record with express language of repudiation.

The UCC requires assurances to be in writing and signed by the company President.

The UCC does not specify the form that the assurance of performance is to take.

The seller's right to cure a defective tender means that the seller will be given a second chance to make a proper tender of conforming goods.

The Nature and Sources of Law

The Court System and Dispute Resolution

Business Ethics, Social Forces, and the Law

The Constitution As the Foundation of the Legal Environment

Government Regulation of Competition and Prices

Administrative Agencies

Crimes

Torts

Intellectual Property Rights and the Internet

The Legal Environment of International Trade

Nature and Classes of Contracts: Contracting on the Internet

Formation of Contracts: Offer and Acceptance

Capacity and Genuine Assent

Consideration

Legality and Public Policy

Writing, Electronic Forms, and Interpretation of Contracts

Third Persons and Contracts

Discharge of Contracts

Breach of Contract and Remedies

Personal Property and Bailments

Legal Aspects of Supply Chain Management

Nature and Form of Sales

Title and Risk of Loss

Product Liability: Warranties and Torts

Remedies for Breach of Sales Contracts

Kinds of Negotiable Instruments and Negotiability

Transfers of Negotiable Instruments and Warranties of Parties

Liability of the Parties Under Negotiable Instruments

Checks and Funds Transfers

Nature of the Debtor Creditor Relationship

Consumer Protection

Secured Transactions in Personal Property

Bankruptcy

Insurance

Agency

Third Persons in Agency

Regulation of Employment

Equal Employment Opportunity Law

Types of Business Organizations

Partnerships

LPs, LLCs, and LLPs

Corporate Formation

Shareholder Rights in Corporations

Securities Regulation

Accountants Liability and Malpractice

Management of Corporations

Real Property

Environmental Law and Land Use Controls

Leases

Decedents Estates and Trusts

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