Question 1

Which of the following is true regarding the sources of laws that interpret sales contracts?

Accepted Answer

A)  Three sources of laws that interpret sales contracts exist: state common law, the Uniform Commercial Code, and state statutory law. 
B)  Two sources of laws that interpret sales contracts exist: state common law and the Uniform Commercial Code. 
C)  Two sources of laws that interpret sales contracts exist: the Uniform Commercial Code and state statutory law. 
D)  Two sources of laws that interpret sales contracts exist: state common law and state statutory law. 
E)  The Uniform Commercial code is the only source of law interpreting sales contracts. 
A)  Three sources of laws that interpret sales contracts exist: state common law, the Uniform Commercial Code, and state statutory law. 
B)  Two sources of laws that interpret sales contracts exist: state common law and the Uniform Commercial Code. 
C)  Two sources of laws that interpret sales contracts exist: the Uniform Commercial Code and state statutory law. 
D)  Two sources of laws that interpret sales contracts exist: state common law and state statutory law. 
E)  The Uniform Commercial code is the only source of law interpreting sales contracts.

Question 2

Which of the following is true regarding payment and the place for delivery if those terms are left open under the UCC?

Accepted Answer

A)  There is no contract if these terms are omitted. 
B)  If payment terms are omitted, payment is due at the time and place at which the buyer is to receive the goods, and the place for delivery is the seller's place of business. 
C)  If payment terms are omitted, payment is due at the time and place at which the buyer is to receive the goods, and the place for delivery is the buyer's place of business. 
D)  If payment terms are omitted, payment is due at least 10 days prior to the date set for delivery, and the place for delivery is the seller's place of business. 
E)  If payment terms are omitted, payment is due at least 10 days prior to the date set for delivery, and the place for delivery is the buyer's place of business. 
A)  There is no contract if these terms are omitted. 
B)  If payment terms are omitted, payment is due at the time and place at which the buyer is to receive the goods, and the place for delivery is the seller's place of business. 
C)  If payment terms are omitted, payment is due at the time and place at which the buyer is to receive the goods, and the place for delivery is the buyer's place of business. 
D)  If payment terms are omitted, payment is due at least 10 days prior to the date set for delivery, and the place for delivery is the seller's place of business. 
E)  If payment terms are omitted, payment is due at least 10 days prior to the date set for delivery, and the place for delivery is the buyer's place of business.

Question 3

Under the UCC contracts for the sale of goods must be in writing in order to be enforceable if they are valued at ______ or more.

Accepted Answer

A)  $100 
B)  $500 
C)  $1,000 
D)  $1,500 
E)  $5,000 
A)  $100 
B)  $500 
C)  $1,000 
D)  $1,500 
E)  $5,000

Question 4

Which of the following is false regarding the United Nations Convention on Contracts for the International Sale of Goods ("CISG")?

Accepted Answer

A)  Israel is a signatory of the CISG. 
B)  The United States applies the UCC but not the CISG. 
C)  The United Kingdom is not a signatory of the CISG and instead applies English common law. 
D)  The CISG is a treaty. 
E)  Mexico has signed the CISG. 
A)  Israel is a signatory of the CISG. 
B)  The United States applies the UCC but not the CISG. 
C)  The United Kingdom is not a signatory of the CISG and instead applies English common law. 
D)  The CISG is a treaty. 
E)  Mexico has signed the CISG.

Question 5

The mirror-image rule has been adopted by the UCC.

Accepted Answer

A) True 
 B)False

Question 6

The UCC is divided into sections known as ______.

Accepted Answer

A)  Divisions 
B)  Articles 
C)  Subsections 
D)  Clauses 
E)  Amendments 
A)  Divisions 
B)  Articles 
C)  Subsections 
D)  Clauses 
E)  Amendments

Question 7

Federal law is the primary method by which to interpret sales contracts.

Accepted Answer

A) True 
 B)False

Question 8

"Customer Uncertainty." Wallace wanted baseball caps with the name of the firm of which he was president, ABC Corporation, emblazoned on the front. Fran, a merchant in specialized goods, orally agreed with Wallace that she would sell to him 200 baseball caps at $5 each. No writing was ever made although there were a number of witnesses to the conversation. After the caps were finished, but before they were shipped, Wallace called to cancel the order because his firm had just announced a merger and would no longer be known as ABC Corporation. Fran told him to forget canceling the contract because she had just finished the caps. Wallace told Fran that she should have been smarter and had him sign something because without a writing, she does not have a chance in court. Fran is also having problems with other customers. A father who voluntarily coached a youth softball league in his community called and orally ordered 150 baseball caps at a cost of $400 each to give out at a league banquet. He just wanted a variety of caps with no name on them because players from different teams would be at the banquet. Fran had sent a confirming letter to the coach. Fran had the caps packed up and ready to go. Twenty days later, just before she shipped them, the coach called and told her that there was a big feud, the banquet was canceled, and that he was canceling the order. She believes that the coach should pay damages and that it is just that he do so because a big order was involved. Finally, Fran plans on taking to small claims court a merchant customer who orally ordered 500 plain T-shirts at a cost of $5 each but has not picked them up and has refused to do so after several demands.

-Which of the following is true regarding Fran's assertion that she should be allowed to recover from the coach?

Accepted Answer

A)  Based upon the facts given, Fran cannot recover because the father, who was not a merchant in regards to the transaction and had not signed anything showing that he was to be charged for the shirts. 
B)  Fran can recover because she sent the father a confirming letter, and he did not object within 10 days of receipt. 
C)  Fran can recover because she sent the father a confirming letter, and he did not object within 20 days of receipt. 
D)  Fran can recover because the transaction was not covered by the UCC. 
E)  Fran can recover only if she can prove by testimony of a witness that the father received the confirming letter and read it. 
A)  Based upon the facts given, Fran cannot recover because the father, who was not a merchant in regards to the transaction and had not signed anything showing that he was to be charged for the shirts. 
B)  Fran can recover because she sent the father a confirming letter, and he did not object within 10 days of receipt. 
C)  Fran can recover because she sent the father a confirming letter, and he did not object within 20 days of receipt. 
D)  Fran can recover because the transaction was not covered by the UCC. 
E)  Fran can recover only if she can prove by testimony of a witness that the father received the confirming letter and read it.

Question 9

Contrast the requirement of consideration for modification of contracts under the common law and under the UCC.

Accepted Answer

Under the common law, when a contract is

Question 10

Under the UCC, items are _____ if they exist physically.

Accepted Answer

A)  Merchandise 
B)  Real 
C)  Tangible 
D)  Movable 
E)  Saleable 
A)  Merchandise 
B)  Real 
C)  Tangible 
D)  Movable 
E)  Saleable

Question 11

Under the UCC, when is an acceptance effective?

Accepted Answer

A)  When dispatched. 
B)  When received. 
C)  When received only if acceptance by electronic means is made, otherwise on dispatch. 
D)  When dispatched only if the U.S. mail is used, otherwise on receipt. 
E)  When dispatched only when the telephone is used, otherwise on receipt. 
A)  When dispatched. 
B)  When received. 
C)  When received only if acceptance by electronic means is made, otherwise on dispatch. 
D)  When dispatched only if the U.S. mail is used, otherwise on receipt. 
E)  When dispatched only when the telephone is used, otherwise on receipt.

Question 12

Discuss when a party may be considered a "merchant" under the UCC.

Accepted Answer

The UCC defines merchant as a person who

Question 13

Under the UCC lease contracts that require payments of ______ or more must be in writing in order to be enforceable.

Accepted Answer

A)  $100 
B)  $500 
C)  $1,000 
D)  $1,500 
E)  $5,000 
A)  $100 
B)  $500 
C)  $1,000 
D)  $1,500 
E)  $5,000

Question 14

Which of the following is true regarding the holding of the court in The Travelers Property Casualty Company of America and Hellmuth Obata & Kassabaum Inc., v. Saint-Gobain Technical Fabrics Canada Limited, the case in the text involving whether the statute of frauds barred enforcement of a contract and also whether the United Nations Convention on Contracts of the International Sale of Goods (CISG) applied to a contract in view of the fact that a particular state's law was referenced in the contract?

Accepted Answer

A)  That the CISG did not apply because the contract referred to provisions of the UCC and that the statute of frauds contained within the UCC barred enforcement of the contract. 
B)  That the CISG did not apply because a construction of an arena, which would result in a type of realty, was concerned and that the statute of frauds contained within the UCC barred enforcement of the contract. 
C)  That the CISG did not apply because significant provisions in the contract were left unwritten but that the statute of frauds was inapplicable. 
D)  That the CISG applied and that oral discussions could have formed a contract. 
E)  That the CISG applied and that no contract could have resulted because of the lack of a writing. 
A)  That the CISG did not apply because the contract referred to provisions of the UCC and that the statute of frauds contained within the UCC barred enforcement of the contract. 
B)  That the CISG did not apply because a construction of an arena, which would result in a type of realty, was concerned and that the statute of frauds contained within the UCC barred enforcement of the contract. 
C)  That the CISG did not apply because significant provisions in the contract were left unwritten but that the statute of frauds was inapplicable. 
D)  That the CISG applied and that oral discussions could have formed a contract. 
E)  That the CISG applied and that no contract could have resulted because of the lack of a writing.

Question 15

"Customer Uncertainty." Wallace wanted baseball caps with the name of the firm of which he was president, ABC Corporation, emblazoned on the front. Fran, a merchant in specialized goods, orally agreed with Wallace that she would sell to him 200 baseball caps at $5 each. No writing was ever made although there were a number of witnesses to the conversation. After the caps were finished, but before they were shipped, Wallace called to cancel the order because his firm had just announced a merger and would no longer be known as ABC Corporation. Fran told him to forget canceling the contract because she had just finished the caps. Wallace told Fran that she should have been smarter and had him sign something because without a writing, she does not have a chance in court. Fran is also having problems with other customers. A father who voluntarily coached a youth softball league in his community called and orally ordered 150 baseball caps at a cost of $400 each to give out at a league banquet. He just wanted a variety of caps with no name on them because players from different teams would be at the banquet. Fran had sent a confirming letter to the coach. Fran had the caps packed up and ready to go. Twenty days later, just before she shipped them, the coach called and told her that there was a big feud, the banquet was canceled, and that he was canceling the order. She believes that the coach should pay damages and that it is just that he do so because a big order was involved. Finally, Fran plans on taking to small claims court a merchant customer who orally ordered 500 plain T-shirts at a cost of $5 each but has not picked them up and has refused to do so after several demands.

-Are there any steps Fran should take in small claims court, or before she goes, regarding the customer who ordered the plain T-shirts?

Accepted Answer

A)  No, because once the parties are in court, positions of the parties are frozen. 
B)  No, because once the parties are in court, only the judge can add evidence. 
C)  Yes, she should attempt to get the customer to admit to the judge that he ordered the T-shirts. 
D)  Yes, she should dismiss the case before she is charged with sanctions. 
E)  Yes, she should dismiss the case before she is charged with the other party's attorney fees. 
A)  No, because once the parties are in court, positions of the parties are frozen. 
B)  No, because once the parties are in court, only the judge can add evidence. 
C)  Yes, she should attempt to get the customer to admit to the judge that he ordered the T-shirts. 
D)  Yes, she should dismiss the case before she is charged with sanctions. 
E)  Yes, she should dismiss the case before she is charged with the other party's attorney fees.

Question 16

"Carpet Woes." Beau went shopping at ABC Carpet. He saw some carpet he liked but could not make up his mind. The manager at ABC Carpet wrote down the proposed purchase price for him along with a statement that the price would be good for three months. Two months later Beau went back to ABC Carpet to purchase the carpet. Unfortunately, the price had gone up. Beau showed the manager his writing and guaranteed price, but the manager said that the offer was no longer good. Although he had to pay more than the ABC manager had initially promised, Beau proceeded to purchase his carpet from XYZ carpet, and he also contracted with XYZ to do the installation. Unfortunately, Beau almost immediately started to have problems with the carpet. Beau told the sales manager for XYZ Carpet that he was planning on bring suit for breach of warranty. The sales manager, however, told him that breach of warranty provisions only applied to sales of goods and that the carpet purchase was for installation, a service.
-Which of the following is true in most states regarding whether the UCC applies to the contract Beau had with XYZ Carpet?

Accepted Answer

A)  Common law will be applied, not the UCC, because the contract was mixed. 
B)  The UCC will be applied, not common law, because the contract was mixed. 
C)  The court will apply the predominant-purpose test to determine whether the predominant purpose of the contract was the sale of goods in which case the UCC would apply. 
D)  The court will apply the service-warranty test to determine whether the predominant purpose of the contract was the provision of a service in which case the UCC would apply. 
E)  The court will apply the service-warranty test to determine whether the predominant purpose of the contract was the sale of goods in which case the UCC would apply. 
A)  Common law will be applied, not the UCC, because the contract was mixed. 
B)  The UCC will be applied, not common law, because the contract was mixed. 
C)  The court will apply the predominant-purpose test to determine whether the predominant purpose of the contract was the sale of goods in which case the UCC would apply. 
D)  The court will apply the service-warranty test to determine whether the predominant purpose of the contract was the provision of a service in which case the UCC would apply. 
E)  The court will apply the service-warranty test to determine whether the predominant purpose of the contract was the sale of goods in which case the UCC would apply.

Question 17

Regarding the "Case Opener," which of the following best represents the decision on whether the cell towers at issue constituted goods?

Accepted Answer

A)  That the contract involving the purchase of the cell towers was predominately for the purchase of real estate and that the towers were, therefore, not goods. 
B)  That the contract involving the purchase of the cell towers predominately involved cellular telephone service and that the towers were, therefore, not goods. 
C)  That the contract involving the purchase of the cell towers was not for goods because the towers were not easily movable. 
D)  That the contract involving the purchase of the cell towers was predominately for goods because common law was applied by contract. 
E)  That the contract involving the purchase of the cell towers was predominantly for the sale of goods for reasons including that the towers had physical property and could be moved. 
A)  That the contract involving the purchase of the cell towers was predominately for the purchase of real estate and that the towers were, therefore, not goods. 
B)  That the contract involving the purchase of the cell towers predominately involved cellular telephone service and that the towers were, therefore, not goods. 
C)  That the contract involving the purchase of the cell towers was not for goods because the towers were not easily movable. 
D)  That the contract involving the purchase of the cell towers was predominately for goods because common law was applied by contract. 
E)  That the contract involving the purchase of the cell towers was predominantly for the sale of goods for reasons including that the towers had physical property and could be moved.

Question 18

The UCC was created in ____.

Accepted Answer

A)  1980 
B)  1964 
C)  1952 
D)  1943 
E)  1935 
A)  1980 
B)  1964 
C)  1952 
D)  1943 
E)  1935

Question 19

When courts interpret sales and lease contracts, how do they prioritize express terms, course of performance, course of dealing, and usage of trade?

Accepted Answer

A)  (1) Express terms, (2) Course of performance, (3) Course of dealing, and (4) Usage of trade 
B)  (1) Usage of trade, (2) Course of performance, (3) Course of dealing, and (4) Express terms 
C)  (1) Express terms, (2) Course of dealing, (3) Course of performance, and (4) Usage of trade 
D)  (1) Course of performance, (2) Course of dealing, (3) Express terms, and (4) Usage of trade 
E)  (1) Express terms, (2) Usage of trade, (3) Course of dealing, and (4) Course of performance 
A)  (1) Express terms, (2) Course of performance, (3) Course of dealing, and (4) Usage of trade 
B)  (1) Usage of trade, (2) Course of performance, (3) Course of dealing, and (4) Express terms 
C)  (1) Express terms, (2) Course of dealing, (3) Course of performance, and (4) Usage of trade 
D)  (1) Course of performance, (2) Course of dealing, (3) Express terms, and (4) Usage of trade 
E)  (1) Express terms, (2) Usage of trade, (3) Course of dealing, and (4) Course of performance

Question 20

Which of the following articles of the UCC governs sales contracts?

Accepted Answer

A)  2 
B)  2(
A)  
C)  4 
D)  4(
A)  
E)  6 
A)  2 
B)  2(
A)  
C)  4 
D)  4(
A)  
E)  6

Exam 21: Introduction to Sales and Lease Contracts

Which of the following is true regarding the sources of laws that interpret sales contracts?

Which of the following is true regarding payment and the place for delivery if those terms are left open under the UCC?

Under the UCC contracts for the sale of goods must be in writing in order to be enforceable if they are valued at ______ or more.

Which of the following is false regarding the United Nations Convention on Contracts for the International Sale of Goods ("CISG")?

The mirror-image rule has been adopted by the UCC.

The UCC is divided into sections known as ______.

Federal law is the primary method by which to interpret sales contracts.

Contrast the requirement of consideration for modification of contracts under the common law and under the UCC.

Under the UCC, items are _____ if they exist physically.

Under the UCC, when is an acceptance effective?

Discuss when a party may be considered a "merchant" under the UCC.

Under the UCC lease contracts that require payments of ______ or more must be in writing in order to be enforceable.

Regarding the "Case Opener," which of the following best represents the decision on whether the cell towers at issue constituted goods?

The UCC was created in ____.

When courts interpret sales and lease contracts, how do they prioritize express terms, course of performance, course of dealing, and usage of trade?

Which of the following articles of the UCC governs sales contracts?

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

Title, Risk of Loss, and Insurable Interest

Performance and Obligations Under Sales and Leases

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