Question 1

The UCC permits a contract to be considered formed entirely by the parties' conduct even if no definite time of formation can be determined.

Accepted Answer

A) True 
 B)False  True

Question 2

In Merchants Acceptance Inc., v. Jamison, Jamison ordered encyclopedias and the contract specified that delivery was to be made to Jamison's home. Instead, the encyclopedias were delivered to her post office box and she never received them. She refuses to pay for them and issued.

Accepted Answer

A)  Jamison must pay because it was her post office box, delivery was close enough to be substantial performance, and risk of loss passed to her. 
B)  Jamison must pay because she easily could have mitigated damages by going to her post office box to pick up the encyclopedias. 
C)  Jamison does not have to pay because the goods were never tendered to her properly, so risk of loss never passed. 
D)  Jamison does not have to pay because the UCC permits a nonmerchant to cancel contracts with merchants at any time as a consumer protection. 
A)  Jamison must pay because it was her post office box, delivery was close enough to be substantial performance, and risk of loss passed to her. 
B)  Jamison must pay because she easily could have mitigated damages by going to her post office box to pick up the encyclopedias. 
C)  Jamison does not have to pay because the goods were never tendered to her properly, so risk of loss never passed. 
D)  Jamison does not have to pay because the UCC permits a nonmerchant to cancel contracts with merchants at any time as a consumer protection. C

Question 3

Veggy Time Inc., is a distributor of canned vegetables. It has been dealing with Fred Farmer for 10 years, purchasing Fred's entire corn crop. Fred's farm is so large and productive that Veggy Time has exclusively bought all of its corn from Fred alone. Once again it has entered into a contract with Fred to purchase his entire 2015 crop and has no other corn sellers under contract. For the past 10 years, Fred has delivered 100,000 bushels of corn to Veggy Time. Unfortunately, due to an extraordinary amount of rain, Fred's fields are now flooded and most of his crop is destroyed. In 2015, Fred can deliver only 10,000 bushels, and Veggy Time is about to suffer a huge loss. Does Veggy Time have any rights against Fred to recover for its losses? What could Veggy Time do to mitigate its damages?

Accepted Answer

This was an output contract, and Fred was required to sell his entire output to Veggy Time. Fred did sell his entire crop to Veggy Time, although it was not the amount that was anticipated. As long as Fred performed in good faith, he will not be liable to Veggy Time for its losses. Veggy Time's only recourse is to seek corn from other sellers. This would not actually be considered covering because Fred has not breached. Note that Fred need not claim impossibility or commercial impracticability due to the unexpected rain because he is not breaching. He performed in good faith as best he could, and Veggy Time has no recourse.

Question 4

For a writing to satisfy statute of frauds requirements under the UCC, it must include each of the following except:

Accepted Answer

A)  price. 
B)  quantity. 
C)  the signature of the party against whom enforcement is sought. 
D)  language that a reasonable person would believe constitutes an intent to form a contract. 
A)  price. 
B)  quantity. 
C)  the signature of the party against whom enforcement is sought. 
D)  language that a reasonable person would believe constitutes an intent to form a contract.

Question 5

If two companies enter into a sales contract and the shipping terms are omitted from the agreement, the contract will automatically become a shipping contract.

Accepted Answer

A) True 
 B)False

Question 6

The mirror image rule is not enforced under UCC standards.

Accepted Answer

A) True 
 B)False

Question 7

UCC risk of loss provisions will govern the terms of a contract even if the parties have specified risk allocation in the contract.

Accepted Answer

A) True 
 B)False

Question 8

In Sons of Thunder Inc., v. Borden Inc., it was alleged that Borden breached its contract with the owners of Sons of Thunder by not purchasing the required amount of clams. The court found that:

Accepted Answer

A)  because Borden urged the plaintiffs to purchase bigger boats to handle "shuck-at-sea" technology and then canceled the "shuck-at-sea" program, buying fewer clams from the plaintiff and then buying from a competitor, Borden had not acted in good faith. 
B)  Borden had breached an output contract by not buying all of the plaintiffs' clams and buying from competitors. 
C)  purchasing larger boats by the plaintiffs was a business decision that Borden could not be held responsible for. 
D)  Borden had breached a requirements contract by buying from competitors when the plaintiffs still had available clams to sell to Borden. 
A)  because Borden urged the plaintiffs to purchase bigger boats to handle "shuck-at-sea" technology and then canceled the "shuck-at-sea" program, buying fewer clams from the plaintiff and then buying from a competitor, Borden had not acted in good faith. 
B)  Borden had breached an output contract by not buying all of the plaintiffs' clams and buying from competitors. 
C)  purchasing larger boats by the plaintiffs was a business decision that Borden could not be held responsible for. 
D)  Borden had breached a requirements contract by buying from competitors when the plaintiffs still had available clams to sell to Borden.

Question 9

Goods that exactly meet the specifications of a contract are called ________ goods.

Accepted Answer

The answer of Goods that exactly meet the specifications of...

Question 10

UCC rules on acceptance of goods and payment in regard to installment contracts mandate that:

Accepted Answer

A)  acceptance is not made until all shipments are received and then payment is made. 
B)  acceptance is made separately for each shipment but payment is not due until the final shipment is received. 
C)  payment must be made in advance and acceptance occurs after all shipments are received. 
D)  acceptance is made separately for each shipment and payment for each shipment is due on delivery of that shipment. 
A)  acceptance is not made until all shipments are received and then payment is made. 
B)  acceptance is made separately for each shipment but payment is not due until the final shipment is received. 
C)  payment must be made in advance and acceptance occurs after all shipments are received. 
D)  acceptance is made separately for each shipment and payment for each shipment is due on delivery of that shipment.

Question 11

Abbreviations published by the International Chamber of Commerce that are meant to avoid confusion in international business transactions are called ________ terms.

Accepted Answer

The answer of Abbreviations published by the International Chamber of...

Question 12

If goods are to be picked up at the seller's place of business by the buyer and the seller is a merchant, the seller retains risk of loss until the buyer takes possession of the goods.

Accepted Answer

A) True 
 B)False

Question 13

Article 2 rules for acceptance of offers are more rigid than common law rules.

Accepted Answer

A) True 
 B)False

Question 14

The United Nations Convention on Contracts for the International Sale of Goods does not recognize a formal writing requirement similar to the UCC statute of frauds requirement.

Accepted Answer

A) True 
 B)False

Question 15

Mackey Pharmacy Corp. orders 5,000 cases of regular-strength aspirin from MAK Pharmaceuticals. When they are delivered, an inspection shows that while the delivery is conforming to the contract with regard to the quantity and quality of the aspirin, none of the aspirin are in childproof bottles. The contract was silent regarding the issue of childproof bottles. Mackey rejects the delivery, and MAK sues for breach of contract. How should the courts analyze and resolve this matter?

Accepted Answer

When a UCC sales contract is silent as t

Question 16

In an installment contract, the buyer may reject an installment if the nonconformity substantially impairs the value of that installment or the nonconformity cannot be cured.

Accepted Answer

A) True 
 B)False

Question 17

In a shipping contract, the risk of loss passes to the buyer when:

Accepted Answer

A)  the contract is signed or finalized. 
B)  the goods are delivered to the carrier. 
C)  the goods are delivered to the buyer. 
D)  the goods are en route and at least halfway to the buyer. 
A)  the contract is signed or finalized. 
B)  the goods are delivered to the carrier. 
C)  the goods are delivered to the buyer. 
D)  the goods are en route and at least halfway to the buyer.

Question 18

Just as in common law, the UCC recognizes the concept of anticipatory repudiation, allowing a breach to be declared prior to performance being due.

Accepted Answer

A) True 
 B)False

Question 19

Two merchants agree to a sale of goods to be shipped by boat from Maine to Florida. No other shipping terms are indicated. If the boat sinks during the trip and all the goods are destroyed:

Accepted Answer

A)  the buyer may sue the seller, but not the carrier, for its loss. 
B)  the seller may sue the carrier because the seller maintained risk of loss and the right to sue for losses. 
C)  the buyer may sue both the seller and the carrier for its loss. 
D)  the buyer may sue the carrier, but not the seller, for its loss. 
A)  the buyer may sue the seller, but not the carrier, for its loss. 
B)  the seller may sue the carrier because the seller maintained risk of loss and the right to sue for losses. 
C)  the buyer may sue both the seller and the carrier for its loss. 
D)  the buyer may sue the carrier, but not the seller, for its loss.

Question 20

If a seller has delivered nonconforming goods that have been rejected, upon notice of an intent to cure, the seller automatically then has 15 days to deliver conforming goods.

Accepted Answer

A) True 
 B)False

Exam 9: Contracts for the Sale of Goods

The UCC permits a contract to be considered formed entirely by the parties' conduct even if no definite time of formation can be determined.

In Merchants Acceptance Inc., v. Jamison, Jamison ordered encyclopedias and the contract specified that delivery was to be made to Jamison's home. Instead, the encyclopedias were delivered to her post office box and she never received them. She refuses to pay for them and issued.

For a writing to satisfy statute of frauds requirements under the UCC, it must include each of the following except:

If two companies enter into a sales contract and the shipping terms are omitted from the agreement, the contract will automatically become a shipping contract.

The mirror image rule is not enforced under UCC standards.

UCC risk of loss provisions will govern the terms of a contract even if the parties have specified risk allocation in the contract.

In Sons of Thunder Inc., v. Borden Inc., it was alleged that Borden breached its contract with the owners of Sons of Thunder by not purchasing the required amount of clams. The court found that:

Goods that exactly meet the specifications of a contract are called ________ goods.

UCC rules on acceptance of goods and payment in regard to installment contracts mandate that:

Abbreviations published by the International Chamber of Commerce that are meant to avoid confusion in international business transactions are called ________ terms.

If goods are to be picked up at the seller's place of business by the buyer and the seller is a merchant, the seller retains risk of loss until the buyer takes possession of the goods.

Article 2 rules for acceptance of offers are more rigid than common law rules.

The United Nations Convention on Contracts for the International Sale of Goods does not recognize a formal writing requirement similar to the UCC statute of frauds requirement.

In an installment contract, the buyer may reject an installment if the nonconformity substantially impairs the value of that installment or the nonconformity cannot be cured.

In a shipping contract, the risk of loss passes to the buyer when:

Just as in common law, the UCC recognizes the concept of anticipatory repudiation, allowing a breach to be declared prior to performance being due.

Two merchants agree to a sale of goods to be shipped by boat from Maine to Florida. No other shipping terms are indicated. If the boat sinks during the trip and all the goods are destroyed:

If a seller has delivered nonconforming goods that have been rejected, upon notice of an intent to cure, the seller automatically then has 15 days to deliver conforming goods.

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The American Judicial System, Jurisdiction, and Venue

Resolving Disputes: Litigation and Alternative Dispute Resolution Options

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Overview and Language of Contracts

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