Question 1

If a contract does not state the method of payment,which of the following is likely to be unacceptable?

Accepted Answer

A) Foreign currency 
B) Cash 
C) Check 
D) Credit card 
A) Foreign currency 
B) Cash 
C) Check 
D) Credit card

Question 2

Coasters,Inc.notifies Big Box that it does not intend to perform under their contract.Which of the following statements is false?

Accepted Answer

A) Big Box may suspend its performance. 
B) Big Box must wait for performance for a reasonable time. 
C) Big Box only needs to await for performance for a reasonable time,if it chooses to wait. 
D) Big Box may sue for damages for breach of contract. 
A) Big Box may suspend its performance. 
B) Big Box must wait for performance for a reasonable time. 
C) Big Box only needs to await for performance for a reasonable time,if it chooses to wait. 
D) Big Box may sue for damages for breach of contract.

Question 3

________ is the standard used by the UCC that defines when a party is relieved of his or her contract obligations because of the occurrence of unforeseeable,external events beyond his or her control.

Accepted Answer

A) Commercial impracticability 
B) Repudiation 
C) Frustration of purpose 
D) Impossibility 
A) Commercial impracticability 
B) Repudiation 
C) Frustration of purpose 
D) Impossibility

Question 4

A contract calls for Baked Goods,Inc. ,a bakery,to deliver fresh cookies to a coffee shop,The Coffee Cup,every Monday and for The Coffee Cup to pay on delivery.Baked Goods regularly delivers the cookies on Thursday and The Coffee Cup pays and never objects to the late deliveries.One Thursday,The Coffee Shop refuses the delivery and wants to cancel the contract.Which of the following statements is true?

Accepted Answer

A) The Coffee Cup can cancel the contract because Baked Goods has breached it. 
B) The Coffee Cup must give Baked Goods an opportunity to cure the error. 
C) The Coffee Cup cannot cancel the contract because it failed to give Baked Goods reasonable notice of its dissatisfaction. 
D) The Coffee Cup cannot cancel the contract because it waived its right by accepting the previous late deliveries. 
A) The Coffee Cup can cancel the contract because Baked Goods has breached it. 
B) The Coffee Cup must give Baked Goods an opportunity to cure the error. 
C) The Coffee Cup cannot cancel the contract because it failed to give Baked Goods reasonable notice of its dissatisfaction. 
D) The Coffee Cup cannot cancel the contract because it waived its right by accepting the previous late deliveries.

Question 5

If there is a conflict between the express terms of the contract and trade usage,the:

Accepted Answer

A) past course of dealing between the parties will prevail. 
B) seller is excused. 
C) contract is voided. 
D) express terms of the contract prevail. 
A) past course of dealing between the parties will prevail. 
B) seller is excused. 
C) contract is voided. 
D) express terms of the contract prevail.

Question 6

The buyer usually can inspect goods before payment except:

Accepted Answer

A) where payment is made by check. 
B) when the goods are perishable. 
C) where the goods are shipped COD. 
D) when the buyer pays in a foreign currency. 
A) where payment is made by check. 
B) when the goods are perishable. 
C) where the goods are shipped COD. 
D) when the buyer pays in a foreign currency.

Question 7

Generally,the UCC uses the test of impossibility to determine if a person can be excused from performing his contractual obligations.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following statements about assignments is true?

Accepted Answer

A) Parties cannot delegate their duties,regardless of what the contract dictates. 
B) Parties cannot assign their right to receive payment. 
C) Parties cannot assign their right to receive goods. 
D) Parties cannot delegate their duties if the quality of performance may differ. 
A) Parties cannot delegate their duties,regardless of what the contract dictates. 
B) Parties cannot assign their right to receive payment. 
C) Parties cannot assign their right to receive goods. 
D) Parties cannot delegate their duties if the quality of performance may differ.

Question 9

Ace Appliances,an appliance store,orders 100 toasters from Consolidated Electric (CE).The toasters CE ships to Ace,however,are not the ones Ace ordered.Hence,Ace rejects them.CE then insists that Ace return them,at the expense of Ace.Can CE make Ace return the toasters? If so,who pays the cost of returning the toasters?

Accepted Answer

Ace has to return the toasters,but CE ha

Question 10

Which of the following can a buyer do if the goods delivered by the seller do not conform to the contract?

Accepted Answer

A) Accept only part of a commercial unit and reject the rest 
B) Accept all of them but not make the payment 
C) Accept a commercial unit and withhold payment for the accepted portion 
D) Accept any commercial units and reject the rest 
A) Accept only part of a commercial unit and reject the rest 
B) Accept all of them but not make the payment 
C) Accept a commercial unit and withhold payment for the accepted portion 
D) Accept any commercial units and reject the rest

Question 11

Under the Code,consideration is required to support a modification or rescission of a contract for the sale of goods.

Accepted Answer

A) True 
 B)False

Question 12

In the event goods are held by a bailee,which of the following is true about risk of loss?

Accepted Answer

A) The buyer has the risk of loss. 
B) Risk of loss remains with the seller until the buyer retrieves the goods from the bailee. 
C) Risk of loss remains with the seller until the bailee agrees to hold the goods for the buyer. 
D) The bailee has the risk of loss. 
A) The buyer has the risk of loss. 
B) Risk of loss remains with the seller until the buyer retrieves the goods from the bailee. 
C) Risk of loss remains with the seller until the bailee agrees to hold the goods for the buyer. 
D) The bailee has the risk of loss.

Question 13

If the goods required for the performance of a contract are destroyed without fault of either party prior to the time that the risk of loss passed to the buyer,the contract is voided.

Accepted Answer

A) True 
 B)False

Question 14

Customs and practices of the business that are known by people in the business and that are usually assumed by parties to a contract for goods of that type are known as ________.

Accepted Answer

A) usage of trade 
B) warranties 
C) courses of action 
D) fair norms 
A) usage of trade 
B) warranties 
C) courses of action 
D) fair norms

Question 15

In the case in the text,Grace Label,Inc.v.Kliff,the court held that:

Accepted Answer

A) the parties' course of dealing was irrelevant in deciding whether Kliff breached the contract because Barcel was responsible for printing the cards. 
B) course of dealing between the parties was admissible to explain or supplement the contract. 
C) course of dealing between two parties is irrelevant when a third party that has never been a party to a contract before is part of the agreement at issue. 
D) course of dealing between the parties demonstrating that Barcel was reasonable in assuming that the same card material would be acceptable. 
A) the parties' course of dealing was irrelevant in deciding whether Kliff breached the contract because Barcel was responsible for printing the cards. 
B) course of dealing between the parties was admissible to explain or supplement the contract. 
C) course of dealing between two parties is irrelevant when a third party that has never been a party to a contract before is part of the agreement at issue. 
D) course of dealing between the parties demonstrating that Barcel was reasonable in assuming that the same card material would be acceptable.

Question 16

If the goods are covered by a negotiable warehouse receipt,then the seller must:

Accepted Answer

A) notify the bailee about the buyer. 
B) endorse the receipt and give it to the buyer. 
C) obtain bailee's consent before selling his goods. 
D) release the goods to the buyer. 
A) notify the bailee about the buyer. 
B) endorse the receipt and give it to the buyer. 
C) obtain bailee's consent before selling his goods. 
D) release the goods to the buyer.

Question 17

A buyer who is not a merchant rejects nonconforming goods.She:

Accepted Answer

A) must return the goods to the seller. 
B) must sell the goods for the seller. 
C) must hold the goods for the seller for a reasonable time. 
D) may destroy the goods. 
A) must return the goods to the seller. 
B) must sell the goods for the seller. 
C) must hold the goods for the seller for a reasonable time. 
D) may destroy the goods.

Question 18

If a buyer has a basis for rejecting a delivery of goods,then the buyer can reject the goods any time after the delivery.

Accepted Answer

A) True 
 B)False

Question 19

If no agreement is made between a buyer and seller on inspection,then the UCC indicates that a buyer may inspect the goods at any time the buyer chooses,as long as it is reasonable.

Accepted Answer

A) True 
 B)False

Question 20

Under a(n)________,the seller's bank agrees to assume liability on the letter of credit.

Accepted Answer

A) confirmed letter of credit 
B) advised letter of credit 
C) negotiable bill of lading 
D) revocable letter of credit 
A) confirmed letter of credit 
B) advised letter of credit 
C) negotiable bill of lading 
D) revocable letter of credit

Exam 21: Performance of Sales Contracts

If a contract does not state the method of payment,which of the following is likely to be unacceptable?

Coasters,Inc.notifies Big Box that it does not intend to perform under their contract.Which of the following statements is false?

________ is the standard used by the UCC that defines when a party is relieved of his or her contract obligations because of the occurrence of unforeseeable,external events beyond his or her control.

If there is a conflict between the express terms of the contract and trade usage,the:

The buyer usually can inspect goods before payment except:

Generally,the UCC uses the test of impossibility to determine if a person can be excused from performing his contractual obligations.

Which of the following statements about assignments is true?

Which of the following can a buyer do if the goods delivered by the seller do not conform to the contract?

Under the Code,consideration is required to support a modification or rescission of a contract for the sale of goods.

In the event goods are held by a bailee,which of the following is true about risk of loss?

If the goods required for the performance of a contract are destroyed without fault of either party prior to the time that the risk of loss passed to the buyer,the contract is voided.

Customs and practices of the business that are known by people in the business and that are usually assumed by parties to a contract for goods of that type are known as ________.

In the case in the text,Grace Label,Inc.v.Kliff,the court held that:

If the goods are covered by a negotiable warehouse receipt,then the seller must:

A buyer who is not a merchant rejects nonconforming goods.She:

If a buyer has a basis for rejecting a delivery of goods,then the buyer can reject the goods any time after the delivery.

If no agreement is made between a buyer and seller on inspection,then the UCC indicates that a buyer may inspect the goods at any time the buyer chooses,as long as it is reasonable.

Under a(n)________,the seller's bank agrees to assume liability on the letter of credit.

The Nature of Law

The Resolution of Private Disputes

Business and the Constitution

Business Ethics, Corporate Social Responsibility, Corporate Governance, and Critical Thinking

Criminal Law and Procedure

Intentional Torts

Negligence and Strict Liability

Intellectual Property and Unfair Competition

Introduction to Contracts

The Agreement: Offer

The Agreement: Acceptance

Consideration

Reality of Consent

Capacity to Contract

Illegality

Writing

Rights of Third Parties

Performance and Remedies

Formation and Terms of Sales Contracts

Product Liability

Remedies for Breach of Sales Contracts

Personal Property and Bailments

Real Property

Landlord and Tenant

Estates and Trusts

Insurance Law

Introduction to Credit and Secured Transactions

Security Interests in Personal Property

Bankruptcy

Negotiable Instruments

Negotiation and Holder in Due Course

Liability of Parties

Checks and Electronic Transfers

The Agency Relationship

Third-Party Relations of the Principal and the Agent

Introduction to Forms of Business and Formation of Partnerships

Operation of Partnerships and Related Forms

Partners Dissociation and Partnerships Dissolution and Winding up

Limited Liability Companies, limited Partnerships, and Limited Liability Limited Partnerships

History and Nature of Corporations

Organization and Financial Structure of Corporations

Management of Corporations

Shareholders Rights and Liabilities

Securities Regulation

Legal and Professional Responsibilities of Auditors, Consultants, and Securities Professionals

Administrative Law

The Federal Trade Commission Act and Consumer Protection Laws

Antitrust: the Sherman Act

The Clayton Act, the Robinsonpatman Act, and Antitrust Exemptions and Immunities

Employment Law

Environmental Regulation

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