Deck 16: Formation of Sales, Lease, and E-Contracts

Question 1

A lease is a contract that transfers the right to the possession and use of named goods for a set term in return for certain consideration.

Answer 1

True

Question 2

A lease,under UCC Article 2A does not require that the lessee provide consideration under the agreement.

Answer 2

False

Question 3

In order to be governed by Article 2 of the UCC,goods must be both movable and tangible.

Answer 3

True

Question 4

Under the UCC,a court can find that a contract exists even though the court cannot determine exactly when the contract came into existence.

Question 5

Under common law's mirror image rule,the offeree's acceptance must be on the same terms as the offer.

Question 6

Article 2 of the UCC contains some provisions that either apply only to merchants or impose a greater duty or merchants.

Question 7

A finance lease is a three-party transaction.

Question 8

A shipment of nonconforming goods offered as an accommodation constitutes an acceptance by the seller and a breach of contract.

Question 9

If the price is omitted from a sales contract,a "reasonable price" will be implied upon delivery.

Question 10

In a contract for the sale of goods,if the seller does not have a place of business and the contract does not mention delivery in any way,delivery is to be made at the seller's residence.

Question 11

The "battle of the forms" refers to the situation where a merchant buyer and merchant seller each use its own standard form contract in the contract formation process,and the law must determine which,if either,controls.

Question 12

Under the UCC,a contract is invalid under all circumstances if it does not state a price.

Question 13

Both the common law and the UCC provide that a contract is created when the offeror receives the acceptance,not when the offeree sends the acceptance.

Question 14

A party can be treated by the UCC as a merchant for some transactions and as a nonmerchant for other transactions.

Question 15

A lessor is the person who transfers the right of possession and use of goods under the lease.

Question 16

As with contracts under common law,the UCC requires that a contract modification be supported by consideration.

Question 17

Article 2 of the UCC is not applied by federal courts to sales contracts governed by federal law.

Question 18

A UCC sale occurs when possession of property is transferred from one party to another.

Question 19

All states have adopted all,or a major part of Article 2 of the UCC.

Question 20

The lessor is the person who acquires the right to possession and use of goods under a lease.

Question 21

Article 2 of the UCC only applies to a mixed sale if the contract for services is a predominant part of the transaction.

Question 22

An agreement modifying a sales or lease contract needs no consideration to be binding.

Question 23

UCC Article 2A (Leases)applies to real property leases.

Question 24

In order for a lease to be covered by Article 2A of the UCC,the lease must be for a period of at least a year.

Question 25

A "firm offer" may be made by a non-merchant seller.

Question 26

Matt is a computer dealer.Matt has a garage sale.At the garage sale,Matt sells an old computer.Matt is considered a merchant when he sells the computer at his garage sale?

Question 27

Revised Articles 2 and 2A now include provisions regarding electronic contracting.

Question 28

The written confirmation rule is a relaxation of the requirements of the mirror-image rule.

Question 29

Both sales and service contracts are covered by the Article 2 of the UCC.

Question 30

In a finance lease,the lessor may acquire the title or the right to the possession of the goods.

Question 31

Buyers are free to accept or reject accommodation shipments.

Question 32

Under the UCC,the buyer or seller can reserve the right to set the price at a later date.

Question 33

Generally,the UCC does not apply to transactions when both parties are non-merchants.

Question 34

Under the UCC,a sale or lease contract can be valid,even if material terms are not agreed upon.

Question 35

UCC Article 2 defines a good as tangible things that are movable.

Question 36

Under the UCC,a valid sales or lease contract only requires consideration and acceptance.

Question 37

The sale of stock is covered by Article 2 of the UCC.

Question 38

The UCC's Statute of Frauds applies to contracts for the sale of goods costing $500 or more and to lease contracts involving payments of $1,000 or more.

Question 39

The UCC requires that lease contracts,but not sale contracts,be in writing.

Question 40

Under the UCC a person is a merchant,if by their occupation they hold themselves out to as having knowledge or skill about the goods in the transaction.

Question 41

Under the UCC,electronic agents allow for sale and lease contracting of goods over the Internet.

Question 42

If a buyer receives and accepts goods,pursuant to an oral contract and the Statute of Frauds of applies,then the contract is unenforceable.

Question 43

The parol evidence rule allows a party to present outside evidence to support their interpretation of a contract.

Question 44

If an oral modification brings a contract within the Statute of Frauds,then it must be in writing to be enforceable.

Question 45

Under the UCC,if payment terms are not agreed on,then payment is due within 30 days of delivery of the goods.

Question 46

The written confirmation rule only satisfies the Statute of Frauds requirement if the transaction is between non-merchants.

Question 47

Article 2 and 2A and Revised Article 2 and 2A contain the same monetary thresholds for contracts and leases that must be in writing.

Question 48

Electronic contracts are not covered by the UCC.

Question 49

Under the UCC,the Statute of Frauds requires that certain contracts be typed on a computer in order to be enforceable.

Question 50

Acceptance of goods occurs if the seller sends non-conforming goods and the buyer accepts them.

Question 51

A contract may be exempt from the Statute of Frauds requirement if it deals with specially manufactured goods.

Question 52

Under the UCC,if a merchant seller gives an assurance that an offer will be held open for a certain amount of time,but sells the goods prior to that date,then the buyer can sue the seller for breach of contract.

Question 53

If the express terms of a written contract are unclear,the court can consider the previous conduct of the parties,in interpreting the contract.

Question 54

If a sales or lease contract does not state the time of performance then it is unenforceable under the UCC.

Question 55

Under the UCC,an accommodation shipment is considered a counteroffer.

Question 56

If,in accepting an offer a non-merchant seller includes additional terms,those additional terms become part of the contract.

Question 57

Under the UCC,an electronic record is not the same as writing.

Question 58

To satisfy the Statute of Frauds requirement,the writing must be sufficient to indicate that a contract has been made between the parties.

Question 59

If a party,against whom enforcement is sought,admits to an oral contract in court proceedings,then the Statute of Frauds requirement is waived and the oral contract can be enforced.

Question 60

A letter of credit guarantees to the seller,that the bank will pay for the goods if the buyer fails to do so.

Question 61

Article 2 and Article 2(A)of the UCC cover which types of transactions?

A) sales of goods and sales of real property
B) sales of goods and leases of goods or real property
C) sales of goods and contracts for the providing of services
D) sales of goods and leases of goods
E) sales of goods and leases of services

Question 62

Under the UCC,if an offer is received by mail,the acceptance:

A) must also be made by mail.
B) can be made by another means, but only if the offer so states.
C) is effective only once it is received by the offeror.
D) can be canceled by the offeree at any time during the period of a firm offer.
E) can be made in any commercially reasonable manner.

Question 63

The parol evidence rule would not allow which of the following items into evidence when interpreting a written contract?

A) Evidence of a price change agreed upon after the contract was signed.
B) Evidence based on prior conduct in similar contracts between the parties to explain the meaning of an ambiguous term in the contract.
C) Evidence of an oral statement regarding the contract price made when the written contract was signed that was different from the price in the written contract.
D) Evidence of the meaning of a term in the parties' line of business that differs from the meaning of that term in everyday language.
E) All the above would be allowed into evidence under the parol evidence rule.

Question 64

Under Article 2 of the UCC,if a purported acceptance to an offer contains additional terms:

A) it is treated as a rejection and counteroffer.
B) if both parties are merchants, this would be a counteroffer, if at least one part is a nonmerchant, it is considered a proposed addition.
C) if neither party is a merchant, there is no contract.
D) it is treated as a counteroffer, but it does not reject the original offer.
E) it is treated as a rejection but not a counteroffer.

Question 65

Susan decides to buy new carpet for her home.She goes to Carpet City and chooses the carpet she likes.As part of the deal,Carpet City agrees to install the carpet.The carpet is installed while Susan is at work.When she returns home and sees it,Susan immediately notices problems.The carpet is not the same quality of carpet she ordered,and the color is off.Does the UCC apply,and why or why not?

A) The UCC does not apply because the deal with Carpet City included service that is not covered by the UCC.
B) The UCC does not apply because Susan and Carpet City did not agree in writing before the carpet was installed that the UCC would apply.
C) The UCC applies because it applies to service contracts as well as to contracts for the sale of goods.
D) The UCC applies because the predominant part of the transaction between Susan and Carpet City was the sale of goods.
E) The UCC does not apply because it does not apply to mixed contracts of goods and services.

Question 66

Under Article 2 of the UCC,what is an accommodation shipment?

A) any accidental or intentional shipment of nonconforming goods
B) any shipment of nonconforming goods that the seller intends the buyer to accept as a substitute
C) any shipment of nonconforming goods that the seller notifies the buyer is being offered as a substitute for the goods ordered
D) any shipment of goods sent pursuant to a court order resulting from a breach
E) any accidental shipment of nonconforming goods

Question 67

The proper relationship between the common law and the UCC regarding sales is:

A) common law no longer applies to sales.
B) the UCC no longer applies to sales.
C) the UCC controls sales, but where the UCC is silent, common law still controls.
D) the common law controls sales, but where the common law is silent, the UCC controls.
E) the UCC applies only common law to sales.

Question 68

For the firm offer rule to apply,who must be a merchant?

A) the offeror
B) the offeree
C) both the offeror and the offeree
D) neither the offeror nor the offeree
E) the offeree only if the offeree is a corporation

Question 69

For the written confirmation rule to apply,who must be a merchant?

A) the offeror
B) the offeree
C) both the offeror and the offeree
D) neither the offeror nor the offeree
E) the offeror, the offeree, and the assignee

Question 70

Letters of credit are important instruments in international trade.

Question 71

If the parties to the contract do not set a specific time of performance for any obligation under the contract,the contract must be performed within which of the following?

A) a reasonable time
B) one year
C) six months
D) 30 days
E) 60 days

Question 72

The UCC applies to a mixed sale of goods and services:

A) whenever a sale of goods is a part of the transaction.
B) only if there is no service involved.
C) if the sale of the goods is the predominant part of the transaction.
D) only if the contract provides that the UCC applies.
E) for any mixed sale, but only if the breach was related to the good and not the service.

Question 73

A grocery store mails to a produce importer an offer to purchase for prompt shipment 50,000 pounds of bananas.The importer immediately ships the 50,000 pounds of bananas by truck to the buyer but does not send notification to the buyer that it is making the shipment.Which of the following is true?

A) There has been an effective acceptance merely by shipping the bananas.
B) There would be an acceptance only if the seller sends a written acceptance by mail since the offer was received by mail.
C) The seller must send an acceptance to the buyer by any commercially reasonable method.
D) When the bananas arrive at the grocery store, their arrival will be treated as an offer.
E) There has been no acceptance because perishable items are involved, and notice must be given prior to shipment.

Question 74

Where a contract for the sale of goods does not mention the place of delivery for the goods,which of the following is true?

A) The seller is obligated to deliver the goods to the buyer's place of business.
B) The contract is void for failure to state a material term.
C) Sellers without a place of business are obligated to deliver the goods at the seller's home.
D) The buyer is obligated to pick-up the goods from a place designated by the seller.
E) The seller is obligated to leave the goods with an authorized shipper, who is then responsible for delivery, wherever the buyer may designate.

Question 75

Under Article 2 of the UCC,where the offeror is a merchant and the offeree is a non-merchant,what is the effect of minor differences in terms contained in an acceptance?

A) A contract will be formed incorporating the different terms of the acceptance.
B) No contract is formed, and the purported acceptance is treated as a counteroffer.
C) A contract is formed, but only if the parties resolve the differences in the offer and the acceptance.
D) A contract is formed according to the terms of the offer, and the additional terms are treated as proposed additions to the contract.
E) The purported acceptance is treated as a rejection, except that the original offer remains open under the firm offer rule.

Question 76

Which is the correct priority,from first to last,of the three types of evidence under the UCC that a court will consider as an exception to the parol evidence rule when trying to clear up an ambiguity in a contract?

A) course of dealing, course of performance, usage of trade
B) usage of trade, course of performance, course of dealing
C) course of performance, course of dealing, usage of trade
D) course of dealing, usage of trade, course of performance
E) course of performance, usage of trade, course of dealing

Question 77

Which of the following situations creates a sale that falls under UCC sales law rules?

A) Dr. Mackey agrees to teach at yahoo university for 1 year
B) Katherine makes a contract to purchase a shed that requires assembly. The contract price is for $8,000.00 which includes $400.00 for labor.
C) Katherine contracts to pay Mike $880.00 to have her bedroom painted. $800.00 is for labor and $80.00 is for the paint.
D) Abc rentals rents a cement mixer to Katherine.
E) All of the above are UCC sales contracts.

Question 78

What is the definition of "goods" under Article 2 of the UCC?

A) "Goods" are defined as tangible things that are movable at the time of their identification to the contract.
B) "Goods" are defined as intangible things that are movable at the time of their identification to the contract.
C) "Goods" are defined as tangible things that are immovable at the time of their identification to the contract.
D) "Goods" are defined as fixtures.
E) "Goods" are defined as intangible things that are immovable at the time of their identification to the contract.

Question 79

Which of the following contracts is not considered a sale?

A) the purchase of a haircut
B) the purchase of a cow by a farmer
C) the purchase of a stereo by a consumer
D) the purchase of an oil tanker by an oil company
E) All of the above are sales under the UCC.

Question 80

Mike's Dress Mart calls a manufacturer and offers to purchase 100 dresses specifying a particular style number and asking for assorted sized in blue and red.The manufacturer can only accept this offer:

A) by returning the phone call and verbally agreeing.
B) by sending a written signed letter agreeing to the terms.
C) by sending a written signed contract agreeing to the terms.
D) by immediately shipping the 100 dresses in assorted sizes in red and blue.
E) All of the above would constitute a valid acceptance.