Question 1

Whether goods conform to contract terms is a ____.

Accepted Answer

A)  Question of fact 
B)  Question of law 
C)  Mixed question of law and fact 
D)  Question of law unless an installment contract is involved in which case it is a question of fact 
E)  Question of fact unless an installment contract is involved in which case it is a question of law 
A)  Question of fact 
B)  Question of law 
C)  Mixed question of law and fact 
D)  Question of law unless an installment contract is involved in which case it is a question of fact 
E)  Question of fact unless an installment contract is involved in which case it is a question of law A

Question 2

Under the UCC which of the following is true if goods are identified at the time the parties entered into a contract and these goods are destroyed through no fault of the parties before risk passes to the buyer or lessee?

Accepted Answer

A)  The parties are excused from performance. 
B)  The seller has 7 days in which to cure. 
C)  The seller has 10 days in which to cure. 
D)  The seller has 30 days in which to cure. 
E)  The seller has 45 days in which to cure. 
A)  The parties are excused from performance. 
B)  The seller has 7 days in which to cure. 
C)  The seller has 10 days in which to cure. 
D)  The seller has 30 days in which to cure. 
E)  The seller has 45 days in which to cure. A

Question 3

The UCC requires that buyers are obligated to accept and pay for ______ in accordance with the contract.

Accepted Answer

A)  Reasonably conforming goods 
B)  Select conforming goods 
C)  Materially conforming goods 
D)  Significantly conforming goods 
E)  Conforming goods 
A)  Reasonably conforming goods 
B)  Select conforming goods 
C)  Materially conforming goods 
D)  Significantly conforming goods 
E)  Conforming goods E

Question 4

If goods identified to a contract are destroyed through no fault of the parties before the risk of loss passes to the buyer, the seller must obtain substitute goods.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following states that when a contract for sale involves repeated occasions for performance by either party with the other's knowledge of the nature of the performance and opportunity for objection to it, any course of performance accepted or acquiesced to without objection is relevant to determine what the parties' agreement means?

Accepted Answer

A)  Trade norm 
B)  Course of dealing 
C)  Anticipated trade dealing 
D)  Usage of trade 
E)  Course of performance 
A)  Trade norm 
B)  Course of dealing 
C)  Anticipated trade dealing 
D)  Usage of trade 
E)  Course of performance

Question 6

Under an installment contract when does the UCC provide that a buyer/lessee may reject an installment of a particular item?

Accepted Answer

A)  If the defects substantially impair the value of the goods regardless of whether cure is possible. 
B)  If the defects cannot be cured even if defects are minor. 
C)  If the defects devalue the property by more than 10% and if the defects cannot be cured. 
D)  If the defects devalue the property by more than 20% and if the defects cannot be cured. 
E)  If the defects substantially impair the value of the goods and if the defects cannot be cured. 
A)  If the defects substantially impair the value of the goods regardless of whether cure is possible. 
B)  If the defects cannot be cured even if defects are minor. 
C)  If the defects devalue the property by more than 10% and if the defects cannot be cured. 
D)  If the defects devalue the property by more than 20% and if the defects cannot be cured. 
E)  If the defects substantially impair the value of the goods and if the defects cannot be cured.

Question 7

Under the UCC a delay in delivery or nondelivery, in whole or in part, is not a breach in circumstances in which performance has been made ______ because a contingency has occurred that was not contemplated when the parties reached the agreement.

Accepted Answer

A)  Unreasonable 
B)  Unprofitable 
C)  Less profitable 
D)  Impracticable 
E)  More difficult 
A)  Unreasonable 
B)  Unprofitable 
C)  Less profitable 
D)  Impracticable 
E)  More difficult

Question 8

The term "reasonable commercial standards of fair dealing" is often called ____.

Accepted Answer

A)  Commercial standards 
B)  Commercial reasonableness 
C)  Transactional reasonableness 
D)  Good faith standards 
E)  Good faith reasonableness 
A)  Commercial standards 
B)  Commercial reasonableness 
C)  Transactional reasonableness 
D)  Good faith standards 
E)  Good faith reasonableness

Question 9

Which of the following governs the inspection process?

Accepted Answer

A)  The seller has an absolute right to dictate the date, time, and method of inspection. 
B)  The buyer has an absolute right to dictate the date, time, and method of inspection. 
C)  The seller has an absolute right to dictate the date and time of inspection, but the buyer has the right to dictate the method of inspection. 
D)  The buyer has an absolute right to dictate the date and time of inspection, but the seller has the right to dictate the method of inspection. 
E)  The inspection must take place at a reasonable time and place, in a reasonable way. 
A)  The seller has an absolute right to dictate the date, time, and method of inspection. 
B)  The buyer has an absolute right to dictate the date, time, and method of inspection. 
C)  The seller has an absolute right to dictate the date and time of inspection, but the buyer has the right to dictate the method of inspection. 
D)  The buyer has an absolute right to dictate the date and time of inspection, but the seller has the right to dictate the method of inspection. 
E)  The inspection must take place at a reasonable time and place, in a reasonable way.

Question 10

Which of the following is defined by the UCC as any practice that members of an industry expect to be part of their dealings?

Accepted Answer

A)  Trade norm 
B)  Course of dealing 
C)  Anticipated trade dealing 
D)  Usage of trade 
E)  Course of performance 
A)  Trade norm 
B)  Course of dealing 
C)  Anticipated trade dealing 
D)  Usage of trade 
E)  Course of performance

Question 11

How does the position of the UCC compare with the common law in regard to the perfect tender rule?

Accepted Answer

A)  The UCC and common law differ with the UCC requiring perfect tender and common law requiring the lesser standard of substantial performance. 
B)  The UCC and common law differ with the UCC requiring perfect tender and common law requiring the lesser standard of material performance. 
C)  The UCC and common law differ with the UCC requiring the lesser standard of material performance and common law requiring perfect tender. 
D)  The UCC and common law differ with the UCC requiring the lesser standard of substantial performance and common law requiring perfect tender. 
E)  They are the same. 
A)  The UCC and common law differ with the UCC requiring perfect tender and common law requiring the lesser standard of substantial performance. 
B)  The UCC and common law differ with the UCC requiring perfect tender and common law requiring the lesser standard of material performance. 
C)  The UCC and common law differ with the UCC requiring the lesser standard of material performance and common law requiring perfect tender. 
D)  The UCC and common law differ with the UCC requiring the lesser standard of substantial performance and common law requiring perfect tender. 
E)  They are the same.

Question 12

Which of the following did the appellate court recognize in SCM Group, U.S.A. Inc., v. Custom Designs & Manufacturing Co. Inc., the case in the text in which the plaintiff sued the defendant after the defendant refused to pay for equipment?

Accepted Answer

A)  That the issue of whether a reasonable time for inspection of goods has passed is generally a question of law for the judge, not the jury, to decide. 
B)  That an effective acceptance is not made unless the buyer affirmatively notifies the seller in writing that the goods were conforming. 
C)  That an effective acceptance is not made unless the buyer affirmatively notifies the seller in writing that the goods while not conforming were acceptable with appropriate deductions. 
D)  That an effective acceptance is not made unless the buyer affirmatively notifies the seller orally or in writing that the goods while not conforming were acceptable with appropriate deductions. 
E)  That a failure to reject results in liability not only for the contractual price, but also for damages suffered as a result. 
A)  That the issue of whether a reasonable time for inspection of goods has passed is generally a question of law for the judge, not the jury, to decide. 
B)  That an effective acceptance is not made unless the buyer affirmatively notifies the seller in writing that the goods were conforming. 
C)  That an effective acceptance is not made unless the buyer affirmatively notifies the seller in writing that the goods while not conforming were acceptable with appropriate deductions. 
D)  That an effective acceptance is not made unless the buyer affirmatively notifies the seller orally or in writing that the goods while not conforming were acceptable with appropriate deductions. 
E)  That a failure to reject results in liability not only for the contractual price, but also for damages suffered as a result.

Question 13

"New Furniture." Penny purchased $3,000 worth of furniture from Good Wood Furniture. Through an arrangement with Good Wood, Penny financed the purchase through a financing company called Let Us Help You. Twenty-nine days after the goods were delivered to her, Penny had a disagreement with Let Us Help You regarding the amount of interest she would be required to pay. She notified Good Wood on that day that she was rejecting the goods. Good Wood claimed that she did not properly reject the furniture and also that she failed to act in good faith, an obligation imposed equally on all parties to a transaction. Penny says that she properly rejected; that, although the UCC imposes no duty of good faith, she acted in good faith; and that, in any event, she had an absolute right to return the goods.
-Which of the following is the correct regarding Good Wood's contention that the duty of good faith is imposed on all parties equally?

Accepted Answer

A)  Good Wood is incorrect because the UCC imposes no duty of good faith. 
B)  Good Wood is incorrect because the UCC mandated duty of good faith requires honesty in fact in regard to all transactions regardless of the parties involved. 
C)  Good Wood is incorrect because the UCC mandated duty of good faith imposes a higher duty than honesty of fact in regard to sellers, that of reasonable negotiation considering the position of buyers. 
D)  Good Wood is incorrect because the UCC mandated duty of good faith imposes a higher duty than honesty of fact in transactions involving amounts in excess of $500, that of reasonable conduct considering all circumstances. 
E)  Good Wood is incorrect because the UCC mandated duty of good faith imposes a higher duty than honesty in fact on merchants, that of reasonable commercial standards of fair dealing. 
A)  Good Wood is incorrect because the UCC imposes no duty of good faith. 
B)  Good Wood is incorrect because the UCC mandated duty of good faith requires honesty in fact in regard to all transactions regardless of the parties involved. 
C)  Good Wood is incorrect because the UCC mandated duty of good faith imposes a higher duty than honesty of fact in regard to sellers, that of reasonable negotiation considering the position of buyers. 
D)  Good Wood is incorrect because the UCC mandated duty of good faith imposes a higher duty than honesty of fact in transactions involving amounts in excess of $500, that of reasonable conduct considering all circumstances. 
E)  Good Wood is incorrect because the UCC mandated duty of good faith imposes a higher duty than honesty in fact on merchants, that of reasonable commercial standards of fair dealing.

Question 14

When parties are merchants, UCC requires ______ in addition to honesty in fact.

Accepted Answer

A)  honesty in equity 
B)  honesty in law 
C)  reasonable commercial standards of fair dealing 
D)  honesty in equity and also reasonable commercial standards of fair dealing 
E)  honesty in equity and honesty in law 
A)  honesty in equity 
B)  honesty in law 
C)  reasonable commercial standards of fair dealing 
D)  honesty in equity and also reasonable commercial standards of fair dealing 
E)  honesty in equity and honesty in law

Question 15

What did the court rule in the case of Hubbard v. UTZ Quality Foods Inc., in which the buyer refused on the basis of color to accept potatoes that were the subject of an installment contract?

Accepted Answer

A)  That the failure to meet the proper color standard was not a substantial impairment. 
B)  That the failure to meet the proper color standard was a substantial impairment but that it did not impair the contract. 
C)  That the failure to meet the proper color standard amounted to a substantial impairment of the installments substantially impairing the whole contract. 
D)  That the refusal to accept the potatoes was made in bad faith. 
E)  That the tendering of the potatoes was made in bad faith. 
A)  That the failure to meet the proper color standard was not a substantial impairment. 
B)  That the failure to meet the proper color standard was a substantial impairment but that it did not impair the contract. 
C)  That the failure to meet the proper color standard amounted to a substantial impairment of the installments substantially impairing the whole contract. 
D)  That the refusal to accept the potatoes was made in bad faith. 
E)  That the tendering of the potatoes was made in bad faith.

Question 16

The right to cure refers to the right to fix errors in a contractual agreement, such as typographical errors.

Accepted Answer

A) True 
 B)False

Question 17

"Business Law Rocks." Business law teacher Penny ordered 50 T-shirts for her classes that said "Business Law Rocks" on the front. She wanted to give them out on the last day of class and contracted with Frank, who owned a T-shirt business, for the shirts to arrive by that day. The shirts arrived on Thursday, just before the last day of classes on Friday. Unfortunately, the shirts said "Business Law Yuck" on the front. Frank told Penny that he would remedy and fix the problem and that he had the right to do so. She told him, however, that she had to have the shirts the next day because the students would be gone after that. Penny had also ordered some pamphlets on employment law to be used the next fall semester. The seller had agreed to provide the pamphlets 30 days before spring semester ended. The seller, however, erred and sent pamphlets on environmental law which arrived 28 days before spring semester ended. The seller attempted to remedy the problem by sending the correct pamphlets on employment law, but they did not arrive until 27 days before spring semester ended. None of the parties had any prior dealings
-In claiming that he had the right to fix the problem, Frank was alluding to which of the following under the UCC?

Accepted Answer

A)  The right to cure 
B)  The right to review 
C)  The right to perform 
D)  The right to claim 
E)  The right to reclaim 
A)  The right to cure 
B)  The right to review 
C)  The right to perform 
D)  The right to claim 
E)  The right to reclaim

Question 18

Which of the following is true regarding similarities between American and European contract law?

Accepted Answer

A)  U.S. law is provided guidance through statutory enactments known as the Restatements of the Law, but European law relies entirely on the CISG. 
B)  U.S. law is provided guidance through the UCC, a federal statutory enactment, but European law relies entirely on the CISG. 
C)  U.S. law finds guidance in the Restatements of the Law constituting soft law, not statutory enactments; and Europe has begun crafting its own version of the U.S. Restatement of Contracts. 
D)  U.S. law finds guidance in the Restatements of the Law constituting soft law, not statutory enactments, but Europe has disavowed any such similar document choosing instead to rely on the CISG. 
E)  U.S. law finds guidance in the Restatements of the Law constituting soft law, not statutory enactments; and Europe has disavowed the CISG choosing to follow a code similar to the U.S. Restatements of the Law. 
A)  U.S. law is provided guidance through statutory enactments known as the Restatements of the Law, but European law relies entirely on the CISG. 
B)  U.S. law is provided guidance through the UCC, a federal statutory enactment, but European law relies entirely on the CISG. 
C)  U.S. law finds guidance in the Restatements of the Law constituting soft law, not statutory enactments; and Europe has begun crafting its own version of the U.S. Restatement of Contracts. 
D)  U.S. law finds guidance in the Restatements of the Law constituting soft law, not statutory enactments, but Europe has disavowed any such similar document choosing instead to rely on the CISG. 
E)  U.S. law finds guidance in the Restatements of the Law constituting soft law, not statutory enactments; and Europe has disavowed the CISG choosing to follow a code similar to the U.S. Restatements of the Law.

Question 19

What type of notice must a party who wishes to replace noncomforming goods and cure within the time set for performance give the other party?

Accepted Answer

A)  Notice within 1 day of delivery 
B)  Notice within 5 days of delivery 
C)  Notice within 10 days of delivery 
D)  There is no set time so long as notice is given prior to the time set for performance 
E)  Prompt notice 
A)  Notice within 1 day of delivery 
B)  Notice within 5 days of delivery 
C)  Notice within 10 days of delivery 
D)  There is no set time so long as notice is given prior to the time set for performance 
E)  Prompt notice

Question 20

Which of the following is true regarding the efforts of the seller of the employment law pamphlets to remedy the problem with the incorrect pamphlets?

Accepted Answer

A)  The seller could not exercise the right to cure once the contract time for performance had ended because the seller did not have reasonable grounds to believe that the nonconforming tender of environmental pamphlets would be acceptable to Penny. 
B)  The seller could likely exercise the right to cure once the contract time for performance had ended because the seller would have had reasonable grounds to believe that Penny would not have objected to the tender of the correct item at the time it was tendered. 
C)  The seller correctly acted to remedy the problem because he had up to 10 days under the UCC to fix any problem. 
D)  The seller correctly acted to remedy the problem because he had up to 20 days under the UCC to fix any problem. 
E)  The seller could not act to remedy the problem because he did not have assurance from Penny in writing that she would allow additional time in which to cure. 
A)  The seller could not exercise the right to cure once the contract time for performance had ended because the seller did not have reasonable grounds to believe that the nonconforming tender of environmental pamphlets would be acceptable to Penny. 
B)  The seller could likely exercise the right to cure once the contract time for performance had ended because the seller would have had reasonable grounds to believe that Penny would not have objected to the tender of the correct item at the time it was tendered. 
C)  The seller correctly acted to remedy the problem because he had up to 10 days under the UCC to fix any problem. 
D)  The seller correctly acted to remedy the problem because he had up to 20 days under the UCC to fix any problem. 
E)  The seller could not act to remedy the problem because he did not have assurance from Penny in writing that she would allow additional time in which to cure.

Exam 23: Performance and Obligations Under Sales and Leases

Whether goods conform to contract terms is a ____.

Under the UCC which of the following is true if goods are identified at the time the parties entered into a contract and these goods are destroyed through no fault of the parties before risk passes to the buyer or lessee?

The UCC requires that buyers are obligated to accept and pay for ______ in accordance with the contract.

If goods identified to a contract are destroyed through no fault of the parties before the risk of loss passes to the buyer, the seller must obtain substitute goods.

Under an installment contract when does the UCC provide that a buyer/lessee may reject an installment of a particular item?

Under the UCC a delay in delivery or nondelivery, in whole or in part, is not a breach in circumstances in which performance has been made ______ because a contingency has occurred that was not contemplated when the parties reached the agreement.

The term "reasonable commercial standards of fair dealing" is often called ____.

Which of the following governs the inspection process?

Which of the following is defined by the UCC as any practice that members of an industry expect to be part of their dealings?

How does the position of the UCC compare with the common law in regard to the perfect tender rule?

Which of the following did the appellate court recognize in SCM Group, U.S.A. Inc., v. Custom Designs & Manufacturing Co. Inc., the case in the text in which the plaintiff sued the defendant after the defendant refused to pay for equipment?

When parties are merchants, UCC requires ______ in addition to honesty in fact.

What did the court rule in the case of Hubbard v. UTZ Quality Foods Inc., in which the buyer refused on the basis of color to accept potatoes that were the subject of an installment contract?

The right to cure refers to the right to fix errors in a contractual agreement, such as typographical errors.

Which of the following is true regarding similarities between American and European contract law?

What type of notice must a party who wishes to replace noncomforming goods and cure within the time set for performance give the other party?

Which of the following is true regarding the efforts of the seller of the employment law pamphlets to remedy the problem with the incorrect pamphlets?

An Introduction to Dynamic Business Law

Business Ethics

The US Legal System

Alternative Dispute Resolution

Constitutional Principles

International and Comparative Law

Crime and the Business Community

Tort Law

Negligence and Strict Liability

Product Liability

Liability of Accountants and Other Professionals

Intellectual Property

Introduction to Contracts

Agreement

Consideration

Capacity and Legality

Legal Assent

Contracts in Writing

Third-Party Rights to Contracts

Discharge and Remedies

Introduction to Sales and Lease Contracts

Title, Risk of Loss, and Insurable Interest

Remedies for Breach of Sales and Lease Contracts

Warranties

Negotiable Instruments: Negotiability and Transferability

Negotiation, Holder in Due Course, and Defenses

Liability, Defenses, and Discharge

Checks and Electronic Fund Transfers

Secured Transactions

Other Creditors Remedies and Suretyship

Bankruptcy and Reorganization

Agency Formation and Duties

Liability to Third Parties and Termination

Forms of Business Organization

Partnerships: Nature, Formation, and Operation

Partnerships: Termination and Limited Partnerships

Corporations: Formation and Financing

Corporations: Directors, Officers, and Shareholders

Corporations: Mergers, Consolidations, Terminations

Corporations: Securities and Investor Protection

Employment and Labor Law

Employment Discrimination

Administrative Law

Consumer Law

Environmental Law

Antitrust Law

The Nature of Property, Personal Property, and Bailments

Real Property

Landlord-Tenant Law

Insurance Law

Wills and Trusts

Filters