Question 1

Under the UCC, a merchant is frequently held to a higher standard of conduct than a non-merchant.

Accepted Answer

A) True 
 B)False  True

Question 2

Betty's BBQ orally contracts with Denny's Design House for 10,000 matchbooks at the price of 10 cents per matchbook. The matchbooks are to be embossed with a logo to be designed by Denny's Design promoting Betty's BBQ. Price, payment terms, and delivery terms are agreed upon between the parties. Denny's Design creates the logo, gets Betty's BBQ's approval of the design, and begins applying the logo on the matchbook covers. Denny's Design has almost finished the order when Betty's BBQ calls to say it has decided to make the eatery a smoke-free restaurant and cancels the order. Denny's Design sues, but Betty's BBQ states that the agreement is unenforceable under the Statute of Frauds. Who wins?

Accepted Answer

A)  Denny's Design House wins. This situation falls under an exception to the Statute of Frauds. 
B)  Denny's Design House wins. This is a service contract for design of a logo. Therefore, the UCC, including the Statute of Frauds provisions of Article 2, does not apply. 
C)  Betty's BBQ wins. This is a contract for $1,000. The Statute of Frauds requires all sales contracts in excess of $500 be in writing. 
D)  Betty's BBQ wins. The Statute of Frauds only applies to merchants. Betty's BBQ is not a merchant in this instance because it intended to give the matchbooks away and not sell them. 
A)  Denny's Design House wins. This situation falls under an exception to the Statute of Frauds. 
B)  Denny's Design House wins. This is a service contract for design of a logo. Therefore, the UCC, including the Statute of Frauds provisions of Article 2, does not apply. 
C)  Betty's BBQ wins. This is a contract for $1,000. The Statute of Frauds requires all sales contracts in excess of $500 be in writing. 
D)  Betty's BBQ wins. The Statute of Frauds only applies to merchants. Betty's BBQ is not a merchant in this instance because it intended to give the matchbooks away and not sell them. A

Question 3

Lorene, an artist, orally agrees to sell Sabrina a painting for $600. While Lorene is busy talking on the phone, Sabrina writes her a note on the back of an envelope she finds in her purse. The signed note states that she will stop by the studio to pick up the painting within the week. Sabrina changes her mind about the painting, and when Lorene sues to enforce the contract, Sabrina defends on the basis of the Statute of Frauds. Sabrina will succeed with this defense.

Accepted Answer

A) True 
 B)False  False

Question 4

Which of the following is a stated purpose of Article 2 of the UCC?

Accepted Answer

A)  to simplify the law governing real estate transactions 
B)  to free up the courts from having to decide on contract issues 
C)  to make the laws governing sales uniform among the various jurisdictions 
D)  to come up with a boilerplate form to be used in all sales transactions 
A)  to simplify the law governing real estate transactions 
B)  to free up the courts from having to decide on contract issues 
C)  to make the laws governing sales uniform among the various jurisdictions 
D)  to come up with a boilerplate form to be used in all sales transactions

Question 5

Newt, a gun dealer, offers to sell a rare civil war musket to Rush, another dealer, for "$15,000, insurance and shipping paid by buyer." Rush responds, "I accept. Insurance and shipping costs divided equally between seller and buyer." The parties

Accepted Answer

A)  do not have a contract since the acceptance violated the mirror image rule. 
B)  do not have a contract since Rush's response was a counteroffer. 
C)  have a contract, and in the majority of states, the terms of the offeree control. 
D)  have a contract, and in the majority of states, the different terms will cancel each other out. 
A)  do not have a contract since the acceptance violated the mirror image rule. 
B)  do not have a contract since Rush's response was a counteroffer. 
C)  have a contract, and in the majority of states, the terms of the offeree control. 
D)  have a contract, and in the majority of states, the different terms will cancel each other out.

Question 6

Stanziano Construction needs a backhoe to complete a project. If it pays Hofmann Rentals for temporary use of the equipment, the transaction will be governed by

Accepted Answer

A)  Article 2 of UCC. 
B)  Article 2A of the UCC. 
C)  Article 3 of the UCC. 
D)  bulk transfer law. 
A)  Article 2 of UCC. 
B)  Article 2A of the UCC. 
C)  Article 3 of the UCC. 
D)  bulk transfer law.

Question 7

In which of the following situations is the seller a merchant under Article 2 of the UCC?

Accepted Answer

A)  Paul, a full-time college student, sold his textbooks to State Bookstore. 
B)  Randall, a part-time college student and full-time father, sold his textbooks to a friend. 
C)  Zompa Inc., a toy manufacturer, contracted to sell dolls to TonTon Department Store. 
D)  Mabel, a stay-at-home mom, sold her car to her friend Gloria. 
A)  Paul, a full-time college student, sold his textbooks to State Bookstore. 
B)  Randall, a part-time college student and full-time father, sold his textbooks to a friend. 
C)  Zompa Inc., a toy manufacturer, contracted to sell dolls to TonTon Department Store. 
D)  Mabel, a stay-at-home mom, sold her car to her friend Gloria.

Question 8

Which of the following would be considered a merchant under the UCC?

Accepted Answer

A)  A woman sells her pistol to someone responding to a classified ad. 
B)  A man who owns a jewelry store sells his used car to a neighbor. 
C)  A gun dealer sells a rifle to someone who enters his shop. 
D)  All of these are correct. 
A)  A woman sells her pistol to someone responding to a classified ad. 
B)  A man who owns a jewelry store sells his used car to a neighbor. 
C)  A gun dealer sells a rifle to someone who enters his shop. 
D)  All of these are correct.

Question 9

Lian contracted for financial services from E-wise. This contract is governed by Article 2 of the UCC.

Accepted Answer

A) True 
 B)False

Question 10

UCC Section 2-204 provides three important rules that enable parties to make a contract quickly and informally. Which of the following is NOT one of these rules?

Accepted Answer

A)  The parties may make a contract in any manner sufficient to show that they reached an agreement. 
B)  A writing sufficient under the Statute of Frauds may be a simple memo, a letter, or informal note, but need not itself be a contract. 
C)  The UCC will enforce a deal even though it is difficult to say exactly when it was formed. 
D)  A court may enforce a bargain even though one or more terms were left open. 
A)  The parties may make a contract in any manner sufficient to show that they reached an agreement. 
B)  A writing sufficient under the Statute of Frauds may be a simple memo, a letter, or informal note, but need not itself be a contract. 
C)  The UCC will enforce a deal even though it is difficult to say exactly when it was formed. 
D)  A court may enforce a bargain even though one or more terms were left open.

Question 11

Which of the following contracts is most likely to be declared unconscionable?

Accepted Answer

A)  a consumer sales contract that charges 300 times the fair market value of the goods 
B)  a consumer sales contract that limits the consumer's remedies to repair or replacement 
C)  a contract between wholesaler and retailer that adds delivery charges at 15% of the costs of the goods 
D)  a sales contract between wholesaler and retailer that limits remedies such as consequential damages 
A)  a consumer sales contract that charges 300 times the fair market value of the goods 
B)  a consumer sales contract that limits the consumer's remedies to repair or replacement 
C)  a contract between wholesaler and retailer that adds delivery charges at 15% of the costs of the goods 
D)  a sales contract between wholesaler and retailer that limits remedies such as consequential damages

Question 12

The UCC is federal legislation enacted by Congress.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following contracts requires a writing under the UCC, Article 2?

Accepted Answer

A)  Jeremy, a full-time student, sold his snow blower to a friend for $450. 
B)  Kayla, a full-time student, purchased a used computer from Office Plus for $300. 
C)  A toy manufacturer contracted to sell dolls valued at $10,000 to a department store. 
D)  Tobias Department Store contracted to sell Jenny a $400 doll. 
A)  Jeremy, a full-time student, sold his snow blower to a friend for $450. 
B)  Kayla, a full-time student, purchased a used computer from Office Plus for $300. 
C)  A toy manufacturer contracted to sell dolls valued at $10,000 to a department store. 
D)  Tobias Department Store contracted to sell Jenny a $400 doll.

Question 14

If the seller has made a substantial beginning in manufacturing customized goods, then an oral contract may be enforceable regardless of the amount of money involved in the contract.

Accepted Answer

A) True 
 B)False

Question 15

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 16

A requirements contract is a contract

Accepted Answer

A)  in restraint of trade. 
B)  in which the seller provides all of the goods that the buyer needs. 
C)  in which the buyer purchases all of the goods that the seller produces. 
D)  in which a party must buy a product it does not want in order to be allowed to buy a product it requires. 
A)  in restraint of trade. 
B)  in which the seller provides all of the goods that the buyer needs. 
C)  in which the buyer purchases all of the goods that the seller produces. 
D)  in which a party must buy a product it does not want in order to be allowed to buy a product it requires.

Question 17

Jones contracts to buy a computer from Martin for $1,500. The contract calls for Martin to service the computer quarterly for the first year and to tutor Jones on how to use the software. Is this contract covered by the UCC or common law?

Accepted Answer

Article 2 governs contracts for the sale

Question 18

Rachel Retailer sends a preprinted purchase order offering to buy goods from Snidley Supplier. Snidley acknowledges Rachel's offer with a preprinted acceptance form. The terms of the two forms do not mirror each other. To analyze whether an enforceable contract exists, one must first determine whether the new language in the acceptance is an additional term or a different term.

Accepted Answer

A) True 
 B)False

Question 19

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 20

Dean Builders agrees to purchase all of its sump pump requirements for the new houses it builds from Satisfactory Sump Pump, Inc. These two business have had similar agreements the last three years, and Dean's requirements have averaged 100 sump pumps per year. This year there was an unusually wet spring and Dean's requirements doubled to 200 sump pumps. Because of the high demand for sump pumps, the market price of the pumps triples. Satisfactory Sump Pump, Inc. delivers 100 pumps at $75, the contract price. Satisfactory has exhausted its inventory and cannot deliver any more, so Dean buys the other 100 pumps from other suppliers at $225 each. Dean sues Satisfactory Sump Pump, Inc. for the additional expense. What is the most likely result?

Accepted Answer

A)  Satisfactory Sump Pump, Inc. wins; output and requirements contracts are not enforceable since no quantity is stated. 
B)  Dean wins; Satisfactory Sump Pump, Inc. agreed to meet the needs of Dean and did not do so, which is a breach. 
C)  Satisfactory Sump Pump, Inc. wins; requirements contracts are governed by a good faith standard, and it was unreasonable for Dean to demand so many additional pumps. 
D)  Dean wins; the requirement of good faith applies only between merchants, and Dean is not a merchant. 
A)  Satisfactory Sump Pump, Inc. wins; output and requirements contracts are not enforceable since no quantity is stated. 
B)  Dean wins; Satisfactory Sump Pump, Inc. agreed to meet the needs of Dean and did not do so, which is a breach. 
C)  Satisfactory Sump Pump, Inc. wins; requirements contracts are governed by a good faith standard, and it was unreasonable for Dean to demand so many additional pumps. 
D)  Dean wins; the requirement of good faith applies only between merchants, and Dean is not a merchant.

Exam 21: Introduction to Sales

Under the UCC, a merchant is frequently held to a higher standard of conduct than a non-merchant.

Which of the following is a stated purpose of Article 2 of the UCC?

Newt, a gun dealer, offers to sell a rare civil war musket to Rush, another dealer, for "$15,000, insurance and shipping paid by buyer." Rush responds, "I accept. Insurance and shipping costs divided equally between seller and buyer." The parties

Stanziano Construction needs a backhoe to complete a project. If it pays Hofmann Rentals for temporary use of the equipment, the transaction will be governed by

In which of the following situations is the seller a merchant under Article 2 of the UCC?

Which of the following would be considered a merchant under the UCC?

Lian contracted for financial services from E-wise. This contract is governed by Article 2 of the UCC.

UCC Section 2-204 provides three important rules that enable parties to make a contract quickly and informally. Which of the following is NOT one of these rules?

Which of the following contracts is most likely to be declared unconscionable?

The UCC is federal legislation enacted by Congress.

Which of the following contracts requires a writing under the UCC, Article 2?

If the seller has made a substantial beginning in manufacturing customized goods, then an oral contract may be enforceable regardless of the amount of money involved in the contract.

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

A requirements contract is a contract

Jones contracts to buy a computer from Martin for $1,500. The contract calls for Martin to service the computer quarterly for the first year and to tutor Jones on how to use the software. Is this contract covered by the UCC or common law?

Introduction to Law

Ethics and Corporate Social Responsibility

International Law

Common Law, Statutory Law, and Administrative Law

Constitutional Law

Dispute Resolution

Crime

Intentional Torts and Business Torts

Negligence, Strict Liability, and Product Liability

Privacy and Internet Law

Introduction to Contracts

Agreement: Offers and Acceptances

Consideration

Legality

Voidable Contracts: Capacity and Consent

Written Contracts

Third Parties

Contract Termination

Remedies

Practical Contracts

Ownership, Risk and Warranties

Performance and Remedies

Secured Transactions

Creating a Negotiable Instrument

Liability for Negotiable Instruments

Accountants Liability

Agency Law

Employment and Labor Law

Employment Discrimination

Starting a Business: Llcs and Other Options

Partnerships

Life and Death of a Corporation

Management Duties

Shareholder Rights

Bankruptcy

Securities Regulation

Antitrust

Consumer Protection

Environmental Law

Intellectual Property

Real Property and Landlord Tenant Law

Personal Property and Bailment

Planning for the Future: Wills, Trusts and Insurance

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