Question 1

Which of the following is correct with respect to "finance leases"?

Accepted Answer

A) A finance lease generally involves four parties. 
B) Finance leases are governed by the Truth in Lending Act rather than the UCC. 
C) The finance lessor functions as a source of credit. 
D) All of the above are correct. 
A) A finance lease generally involves four parties. 
B) Finance leases are governed by the Truth in Lending Act rather than the UCC. 
C) The finance lessor functions as a source of credit. 
D) All of the above are correct.

Question 2

Under the Code,if the parties have reached no agreement on price,the price is a reasonable one at the time of making the contract.

Accepted Answer

A) True 
 B)False

Question 3

Categorizing a transaction as a lease rather than a security interest:

Accepted Answer

A) has significant implications for the parties and for third parties. 
B) has significant implications only for the parties to the transaction. 
C) would mean the provisions of Article 9 of the UCC apply to the transaction. 
D) Two of the above, (b) and (c). 
A) has significant implications for the parties and for third parties. 
B) has significant implications only for the parties to the transaction. 
C) would mean the provisions of Article 9 of the UCC apply to the transaction. 
D) Two of the above, (b) and (c).

Question 4

Amendments to UCC Articles 2 and 2A were promulgated in 2003 to accommodate electronic commerce and to reflect developments in business and law and,as of 2011,these amendments had been adopted in all of the states.

Accepted Answer

A) True 
 B)False

Question 5

A "sale" of goods happens when:

Accepted Answer

A) the parties agree. 
B) the parties sign the contract. 
C) title to the goods is passed. 
D) a promise to transfer title is made. 
A) the parties agree. 
B) the parties sign the contract. 
C) title to the goods is passed. 
D) a promise to transfer title is made.

Question 6

A lessee under a consumer lease and a buyer under a sale of goods are provided with the same protections against unconscionability under the UCC.

Accepted Answer

A) True 
 B)False

Question 7

Davis Co.and Ruby Creations enter an oral contract providing that Ruby will deliver three dozen dresses to Davis at $20 per dress.The next day,Davis sent Ruby a letter signed by Davis's purchasing agent confirming the quantity and item,but not mentioning the price.Which of the following is true?

Accepted Answer

A) Davis Co. is not bound by the terms of the letter unless Ruby responds in writing to verify the agreement. 
B) Ruby Creations and Davis Co. were bound in an enforceable contract at the time they entered the oral agreement. 
C) Davis is bound by the contract when its authorized agent sends the letter, but Ruby Creations is bound by the oral contract ten days after receiving the letter, unless it objects in writing within that time. 
D) The parties cannot be bound by the contract because the price term was missing from the written confirmation. 
A) Davis Co. is not bound by the terms of the letter unless Ruby responds in writing to verify the agreement. 
B) Ruby Creations and Davis Co. were bound in an enforceable contract at the time they entered the oral agreement. 
C) Davis is bound by the contract when its authorized agent sends the letter, but Ruby Creations is bound by the oral contract ten days after receiving the letter, unless it objects in writing within that time. 
D) The parties cannot be bound by the contract because the price term was missing from the written confirmation.

Question 8

The Code defines __________ as "honesty in fact in the conduct or transaction concerned."

Accepted Answer

A) good faith 
B) unconscionability 
C) merchantability 
D) entrusting 
A) good faith 
B) unconscionability 
C) merchantability 
D) entrusting

Question 9

If the original agreement was oral,a subsequent oral modification,which brings the resulting contract within the statute of frauds,is binding on and enforceable by the parties.

Accepted Answer

A) True 
 B)False

Question 10

An example of the "course of dealing" concept that courts will use in interpreting a contract under the UCC would be:

Accepted Answer

A) Steven and Michelle have been involved in contracts together for over 5 years. Steven maintains the sign for Michelle's restaurant. Each time Steven sees the sign needs repair, he fixes it without need of express consent from Michelle. Michelle has always paid the bill promptly. 
B) Temaco, Superior Oil, and AllBig, are the largest national oil companies in the country. In each refinery, orders are placed at the beginning of each quarter for priority delivery to distributors. 
C) Bob sees an ad in the local paper for heritage flower seeds sold by Mel. He calls Mel and is so excited by his find that he orders a quantity of the seeds to be shipped as soon as possible but does not inquire as to price. Mel sends him the seeds and the invoice. 
D) None of the above. 
A) Steven and Michelle have been involved in contracts together for over 5 years. Steven maintains the sign for Michelle's restaurant. Each time Steven sees the sign needs repair, he fixes it without need of express consent from Michelle. Michelle has always paid the bill promptly. 
B) Temaco, Superior Oil, and AllBig, are the largest national oil companies in the country. In each refinery, orders are placed at the beginning of each quarter for priority delivery to distributors. 
C) Bob sees an ad in the local paper for heritage flower seeds sold by Mel. He calls Mel and is so excited by his find that he orders a quantity of the seeds to be shipped as soon as possible but does not inquire as to price. Mel sends him the seeds and the invoice. 
D) None of the above.

Question 11

A(n)__________ is a special type of lease transaction generally involving three parties instead of two.

Accepted Answer

A) consumer lease 
B) sale 
C) finance lease 
D) option 
A) consumer lease 
B) sale 
C) finance lease 
D) option

Question 12

Which of the following transactions is governed by Article 2 of the UCC?

Accepted Answer

A) The sale of an apartment complex. 
B) The sale of oranges to be picked from a 10-acre grove. 
C) The sale of common stock of a soft drink company. 
D) A contract to receive medical services in a hospital. 
A) The sale of an apartment complex. 
B) The sale of oranges to be picked from a 10-acre grove. 
C) The sale of common stock of a soft drink company. 
D) A contract to receive medical services in a hospital.

Question 13

Shannon orally agrees to buy 500 telephone answering machines from Thomas for $25,000.Thomas delivers 300 answering machines to Shannon,who receives and accepts them.Which of the following is correct with regard to this transaction?

Accepted Answer

A) Shannon can enforce the contract for the additional 200 machines. 
B) The contract is enforceable to the extent of the 300 machines that have been received and accepted. 
C) The entire contract is in violation of the statute of frauds and cannot be enforced. 
D) This is a bad deal, and is therefore commercially unconscionable from the beginning and is unenforceable. 
A) Shannon can enforce the contract for the additional 200 machines. 
B) The contract is enforceable to the extent of the 300 machines that have been received and accepted. 
C) The entire contract is in violation of the statute of frauds and cannot be enforced. 
D) This is a bad deal, and is therefore commercially unconscionable from the beginning and is unenforceable.

Question 14

The doctrine of unconscionability has evolved through its application by the courts to include:

Accepted Answer

A) contract negotiating procedures. 
B) substantive contract terms. 
C) good faith. 
D) Both (a) and (b) are correct. 
A) contract negotiating procedures. 
B) substantive contract terms. 
C) good faith. 
D) Both (a) and (b) are correct.

Question 15

Contracts containing unconscionable clauses are void and unenforceable.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is not true about auctions?

Accepted Answer

A) The UCC provides that if an auction sale is advertised or announced in explicit terms to be with reserve, the auctioneer may not withdraw the article put up for sale unless no bid is made within a reasonable time. 
B) Unless an auction is advertised as being without reserve, the sale is with reserve. 
C) Whether an auction is with or without reserve, a bidder may retract his bid at any time prior to acceptance by the auctioneer. 
D) If the auctioneer knowingly receives a bid on behalf of the seller and notice has not been given that the seller reserves the right to bid at the sale, the bidder to whom the goods are sold can avoid the sale. 
A) The UCC provides that if an auction sale is advertised or announced in explicit terms to be with reserve, the auctioneer may not withdraw the article put up for sale unless no bid is made within a reasonable time. 
B) Unless an auction is advertised as being without reserve, the sale is with reserve. 
C) Whether an auction is with or without reserve, a bidder may retract his bid at any time prior to acceptance by the auctioneer. 
D) If the auctioneer knowingly receives a bid on behalf of the seller and notice has not been given that the seller reserves the right to bid at the sale, the bidder to whom the goods are sold can avoid the sale.

Question 17

Leslie,the owner of a shoe store,purchased 500 Model XT-50 running shoes from her supplier,but a price was not stated in the contract.The contract is voidable at Leslie's option until the parties agree on a price.

Accepted Answer

A) True 
 B)False

Question 18

The CISG specifically excludes sales of:

Accepted Answer

A) goods bought for personal, family, or household use. 
B) ships or aircraft. 
C) electricity. 
D) All of the above. 
A) goods bought for personal, family, or household use. 
B) ships or aircraft. 
C) electricity. 
D) All of the above.

Question 19

Substantive unconscionability involves scrutiny by the court for "bargaining naughtiness."

Accepted Answer

A) True 
 B)False

Question 20

Under the CISG,which of the following would not always be considered a material alteration to an offer?

Accepted Answer

A) A change in payment. 
B) A change in time of delivery. 
C) A change in color of goods ordered. 
D) The addition of an arbitration clause for settlement of disputes. 
A) A change in payment. 
B) A change in time of delivery. 
C) A change in color of goods ordered. 
D) The addition of an arbitration clause for settlement of disputes.

Exam 19: Introduction to Sales and Leases

Which of the following is correct with respect to "finance leases"?

Under the Code,if the parties have reached no agreement on price,the price is a reasonable one at the time of making the contract.

Categorizing a transaction as a lease rather than a security interest:

Amendments to UCC Articles 2 and 2A were promulgated in 2003 to accommodate electronic commerce and to reflect developments in business and law and,as of 2011,these amendments had been adopted in all of the states.

A "sale" of goods happens when:

A lessee under a consumer lease and a buyer under a sale of goods are provided with the same protections against unconscionability under the UCC.

Davis Co.and Ruby Creations enter an oral contract providing that Ruby will deliver three dozen dresses to Davis at $20 per dress.The next day,Davis sent Ruby a letter signed by Davis's purchasing agent confirming the quantity and item,but not mentioning the price.Which of the following is true?

The Code defines __________ as "honesty in fact in the conduct or transaction concerned."

If the original agreement was oral,a subsequent oral modification,which brings the resulting contract within the statute of frauds,is binding on and enforceable by the parties.

An example of the "course of dealing" concept that courts will use in interpreting a contract under the UCC would be:

A(n)__________ is a special type of lease transaction generally involving three parties instead of two.

Which of the following transactions is governed by Article 2 of the UCC?

Shannon orally agrees to buy 500 telephone answering machines from Thomas for $25,000.Thomas delivers 300 answering machines to Shannon,who receives and accepts them.Which of the following is correct with regard to this transaction?

The doctrine of unconscionability has evolved through its application by the courts to include:

Contracts containing unconscionable clauses are void and unenforceable.

Which of the following is not true about auctions?

Leslie,the owner of a shoe store,purchased 500 Model XT-50 running shoes from her supplier,but a price was not stated in the contract.The contract is voidable at Leslie's option until the parties agree on a price.

The CISG specifically excludes sales of:

Substantive unconscionability involves scrutiny by the court for "bargaining naughtiness."

Under the CISG,which of the following would not always be considered a material alteration to an offer?

Introduction to Law

Business Ethics

Civil Dispute Resolution

Constitutional Law

Administrative Law

Criminal Law

Intentional Torts

Negligence and Strict Liability

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Consideration

Illegal Bargains

Contractual Capacity

Contracts in Writing

Third Parties to Contracts

Performance, Breach, and Discharge

Contract Remedies

Performance

Transfer of Title and Risk of Loss

Product Liability: Warranties and Strict Liability

Sales Remedies

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits, Collections, and Funds Transfers

Relationship of Principal and Agent

Relationship With Third Parties

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature and Formation of Corporations

Financial Structure of Corporations

Management Structure of Corporations

Fundamental Changes of Corporations

Secured Transactions and Suretyship

Bankruptcy

Securities Regulation

Intellectual Property

Employment Law

Antitrust

Accountants Legal Liability

Consumer Protection

Environmental Law

International Business Law

Introduction to Property, property Insurance, Bailments, and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

Trusts and Wills

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