Deck 20: Sales and Lease Contracts

Question 1

The UCC states that an agreement sufficient to constitute a contract cannot exist if the moment of its making is undetermined.

Answer 1

False

Question 2

When the parties to a contract for a sale of goods do not specify a payment term, and the parties are unaware of the UCC's rules, those rules do not apply.

Answer 2

False

Question 3

If a contract for a sale of goods leaves the quantity term open, there is a basis for determining a remedy.

Answer 3

False

Question 4

Corporate stocks and bonds meet the requirements to be among the items of property characterized as goods under the UCC.

Question 5

The UCC provides that a sale or lease contract will fail for indefiniteness if more than one of its terms is left open.

Question 6

To the extent that it has not been modified by the UCC, the common law of contracts applies to sales contracts.

Question 7

An agreement for the temporary use of goods for a personal, family, or household purpose in exchange for payment does not fall under the UCC.

Question 8

If a court determines that a contract involving both goods and services is primarily a goods contract, any dispute over the deal will be decided under the UCC.

Question 9

An auto lease between a consumer and a car dealer is not governed by the UCC because the statute applies only to transactions between merchants.

Question 10

To qualify as a sale under the UCC, the price in the transaction must be payable in cash.

Question 11

An agreement to transfer the right to possess and use goods for a commercial purpose for a period of time in exchange for payment is a lease.

Question 12

Under the UCC, merchant's choice is the test to determine whether a contract is primarily for the sale of goods or services.

Question 13

A contract for a sale of natural gas is a contract for a sale for goods.

Question 14

An auto dealer is a merchant when selling or leasing a new car but not when selling or leasing a pre-owned vehicle.

Question 15

The UCC promotes commerce by simplifying and streamlining commercial transactions.

Question 16

Under the UCC, if a dispute occurs over the existence of a contract, a purchase order can be sufficient to indicate that there is a contract.

Question 17

Parties to sales and lease contracts are not free to agree to terms different from those stated in the UCC.

Question 18

When a sales contract contemplates shipment of the goods but does not specify the arrangements, either party can make those arrangements.

Question 19

The UCC imposes certain special business standards on merchants because of their commercial expertise.

Question 20

Except for an option contract, a firm offer by a merchant is irrevocable once it has been made.

Question 21

If a writing indicating a sales contract contains only some of the terms that the parties agreed to, a court may allow evidence of consistent additional terms.

Question 22

Generally, when an acceptance to a sales contract between merchants includes terms additional to those in the offer, the terms automatically become part of the deal.

Question 23

To satisfy the UCC's Statute of Frauds, a writing indicating an intent to form a sales contract must signed by both parties.

Question 24

Aaron offers to sell Babe a collection of movie memorabilia. For the transaction to be a sale under the UCC, title to the collection must be passed from the seller to the buyer for

A)cash.
B)services.
C)a price.
D)goods.

Question 25

If a sales contract prohibits any changes unless they are in a signed writing, then only those changes agreed to in a signed writing are enforceable.

Question 26

Acceptance of an offer to lease goods can be made by any means reasonable under the circumstances, including a prompt shipment of the goods.

Question 27

Jade offers to sell Khan a collection of baseball cards. To qualify as a sale under the UCC, Khan's payment must be

A)split into more than one installment.
B)in cash, or its equivalent, or in other goods or services.
C)specified on an invoice and evidenced by a receipt.
D)the fair market value of the goods.

Question 28

Under the UCC, contract modifications extorted by one contracting party from the other party are in bad faith but enforceable.

Question 29

Because contracting parties presumably know best what they meant by their words, the course of performance under their agreement is the best indication of what they meant.

Question 30

If the acceptance to a sales contract between non-merchants includes terms different from those in the offer, no contract is formed under the UCC.

Question 31

An excessive price for goods and unequal bargaining power can indicate to a court that a sales contract is unconscionable.

Question 32

Skyscape LLC regularly engages in the business of leasing construction equipment, primarily to commercial contractors. Tilde, a consumer, leases a backhoe from Skyscape to landscape the property at her home. The price is less than the amount set by state statute. Under the UCC, the deal with Tilde is

A)a commercial lease.
B)a consumer lease.
C)a construction lease.
D)none of the choices.

Question 33

Under the UCC, the meaning of any agreement must be interpreted in light of commercial practices, so a court will not assume that the usage of trade was taken into account when the agreement was phrased.

Question 34

Under the UCC, an oral contract for a sale of goods is enforceable once goods have been received and accepted.

Question 35

Under the law that governs the international sale of goods, when the parties to a contract do not specify a price term, or at least provide for its specification, normally no contract will exist.

Question 36

Minh owns a beach house that she rents to vacationers. Minh gives her son Ngo a trip to Omaha on his graduation from community college. Minh sells her car to her neighbor Phan for $4,500. UCC Article 2 covers

A)the beach house rentals.
B)the gift to Ngo.
C)the sale to Phan.
D)none of the choices.

Question 37

Meds-Free Inc. enters into a contract to sell its product line to Naturopath Clinic, which later sells some of the items to Oneida, a patient and consumer. Article 2 of the UCC applies to

A)both transactions.
B)the sale from Med-Free to the clinic only.
C)the sale from the clinic to its patient only.
D)none of the transactions.

Question 38

In response to an order for a hundred baseballs, the shipment of a hundred basketballs is both an acceptance of the offer and a breach of the contract.

Question 39

The United Nations Convention on Contracts for the International Sale of Goods is the law that governs contracts for the international sale of goods.

Question 40

Under the law that governs the international sale of goods, when an acceptance to a contract includes terms additional to those in the offer, the terms automatically become part of the deal.

Question 41

Dona offers to sell her used sofa, chair, coffee table, end table, and lamp to Etta for $700. Etta responds that she will pay that price if Dona's TV set is included. Neither party is a merchant. Their contract is formed according to

A)the new terms of the acceptance.
B)whatever is reasonable.
C)the terms of the original offer.
D)none of the terms.

Question 42

Grinders Mill agrees to sell to Harvest Company a certain quantity of refined grains. Some of the other terms in the deal are left open. In the case of a dispute, a court will presume

A)whatever favors the non-breaching party.
B)whatever favors the plaintiff.
C)whatever is reasonable.
D)nothing.

Question 43

Mara and Nim enter into a contract for a sale of orchids that requires payment within thirty days of delivery. Under the UCC, the payment term in the contract

A)removes the entire transaction from the UCC.
B)is superseded by the UCC rule that payment is due on delivery.
C)is fully enforceable.
D)is not enforceable because it does not specify a definite date.

Question 44

Rice Farm offers to sell Sushi Restaurants Inc. five hundred bushels of rice. Sushi responds, "We agree to buy five hundred bushels only if the rice is Grade-A quality." Without more, their contract is formed according to

A)the new terms of the acceptance.
B)whatever is reasonable.
C)the terms of the original offer.
D)none of the terms.

Question 45

Containers Inc. sends its standard order form to Distribution Corporation to evidence a sale of packing materials. Distribution responds with its own standard purchase order form. Additional terms in Distribution's form automatically become part of the contract unless

A)the terms materially alter the original contract.
B)the original offer expressly required acceptance of its terms.
C)Containers objects to the new terms within a reasonable time.
D)any of the choices.

Question 46

Mining Corporation purchases the business assets of Open Pit Inc., including its equipment and supplies, for an agreed-to price, payable in installments. Under the UCC, this transaction is

A)a contract for services.
B)a sublease.
C)a lease.
D)a sale.

Question 47

Excluded from Article 2 of the UCC are

A)all of the choices.
B)corporate stocks and bonds.
C)patents and copyrights.
D)ordinary contract rights.

Question 48

Talk Inc. offers to buy from Ultra Corporation 1,000 phones with certain features. Without notifying Talk, Ultra timely ships phones with fewer features. With respect to the offer, this shipment is an acceptance and

A)a breach.
B)an accommodation.
C)complete performance.
D)a counteroffer.

Question 49

Seacoast Transport Company pays Trucks & Trailers Inc. a stated price for the use of seven tractor-trailer rigs for a year. Under the UCC, this is

A)a contract for services.
B)a sublease.
C)a lease.
D)a sale.

Question 50

Brooke is an art collector and hires a broker to buy and sell artworks on her behalf. Under the UCC, in those transactions, Brooke has the status of

A)a consumer.
B)an agent or other intermediary.
C)a merchant.
D)an employer and manager.

Question 51

Ferris is refinishing his kitchen floor and needs a floor sander to complete the job. Ferris's neighbor Gina suggests that he call Home Repair Rentals, Inc. Home Repair leases Ferris a floor sander. In this transaction, the lessor is

A)Ferris.
B)Gina.
C)Home Repair.
D)none of the choices.

Question 52

Jo owns a condominium that she leases to Kia. Jo gives her daughter Liu $450 on her sixteenth birthday. Jo sells her car to her neighbor Maia for $1,500. Article 2 of the UCC covers

A)the lease with Kia.
B)the gift to Liu.
C)the sale to Maia.
D)all of the choices.

Question 53

Embers Corporation orders twelve fire extinguishers from Firefighting Inc., which delivers the equipment. This is most likely

A)a gift.
B)a lease of goods.
C)a sale of goods.
D)a contract for services.

Question 54

Power Company offers to buy from Quality Transformers LLC a specific quantity of a certain type of transformer for a stated price. Quality can accept the offer by

A)a counteroffer within a reasonable time.
B)a promise to ship the goods.
C)a rejection of the offer with an invitation to negotiate a different price.
D)any of the choices.

Question 55

Auto Body Company orders custom paint from Best Hues Inc., but Best does not deliver. Auto Body will probably be unable to enforce the agreement if the parties omitted

A)a price term.
B)a delivery date.
C)a quantity term.
D)shipping arrangements.

Question 56

Curt enters into a contract with Drivers Lease Company for a three-year lease of a car. This contract is subject to

A)Article 2 of UCC.
B)Article 2A of the UCC.
C)none of the choices.
D)the common law only.

Question 57

Marine Expeditions Inc. pays Noah's Boats $4,000 to use an oceangoing vessel for a month. For the purposes of the UCC, this is

A)a merchant's firm offer.
B)a contract for services.
C)a lease.
D)a sale.

Question 58

Refined Metals Company and Superior Fabrication Inc. enter into a contract under which Refined agrees to deliver a certain quantity of sheet metal to Superior each month. The contract does not include a price term. In a suit between the parties over the price, a court will

A)determine a reasonable price.
B)impose the lowest market price.
C)impose the highest market price.
D)return the parties to the positions they held before the contract.

Question 59

Elle sells a motorcycle to Fran for $5,000, a bike to Gwen for $600, a pool table to Holly for $200, and three shares of stock to Inez for $100. Article 2 of the UCC does not apply to the sale of

A)the motorcycle.
B)the bike.
C)the pool table.
D)the stock.

Question 60

Bon, an agent for City Motors Inc., e-mails Dale on May 1 that the dealer will sell to her a 2018 Ford pick-up truck for $25,000 between May 1 and July 1. Bon's offer to Dale is

A)irrevocable for the stated period.
B)irrevocable until Dale responds.
C)revocable at any time.
D)revocable on the payment of consideration to Dale.

Question 61

Under the second of two contracts with Citrus Orchard for deliveries of fruit, Distribution Center refuses to pay for fruit that arrives damaged. Citrus responds that the buyer did not waive payment for damaged goods in the parties' first contract. Citrus is arguing that the court should take into account

A)course of dealing.
B)course of performance.
C)usage of trade.
D)none of the choices.

Question 62

Time Inc. offers to sell to Unlimited Sales Company one hundred digital watches at $50 a piece, subject to certain specific delivery dates. Unlimited replies with a signed purchase order that reads, "Accept your offer for 100 watches at $50 each. Must be delivered to our warehouse." Time does not respond or deliver the goods. Unlimited files a suit for breach of contract, to which Time answers that there is no contract because Unlimited's purchase order contained additional terms and is not signed by Time. Can Unlimited recover? Explain.

Question 63

Ric enters into written agreements with Sophie involving a sale of Timberline Motel, including the land, the building, and the furnishings. The UCC Statute of Frauds governs the sale of

A)all of the choices.
B)the building.
C)the furnishings priced at $500 or more.
D)the land.

Question 64

Bean Processor Inc. agrees to ship a certain quantity of coffee beans to Coffee Café LLC. Bean sends to Coffee an e-mail indicating that the parties intended to form a contract. Against Bean, as a contract, the e-mail will be sufficient

A)if it is signed by Bean.
B)if it is signed by Coffee.
C)if Coffee responds with an acknowledgment of the deal.
D)under no circumstances.

Question 65

With respect to a contract for a sale of goods, when its express terms cannot be construed as reasonably consistent with the parties' course of performance and course of dealing, and the usage of trade, the UCC gives priority to

A)express terms.
B)course of performance.
C)course of dealing.
D)usage of trade.

Question 66

Clean Machines Company makes washing machines. Over the phone, Clean offers to sell Dealer Appliance Outlet one hundred model EZ2000 washers at a price of $150 per unit. Clean says that it will keep the offer open for ninety days. Dealer responds that within two or three weeks it will decide whether to accept. One week later, Clean faxes, and Dealer receives, notice that the offer is withdrawn. Dealer immediately phones Clean to accept the $150-per-unit offer. When Clean refuses to deliver at that price, Dealer files a suit. Clean asserts, first, that there is no contract and, second, that if there is a contract, it is unenforceable. Discuss Clean's assertions.

Question 67

Speedy Trucking Inc. and Trailer Rents LLC are parties to an oral agreement for a one-year lease of six doublewides with payments totaling more than $40,000. They may satisfy the Statute of Frauds by

A)mutually agreeing not to commit fraud.
B)repeating the terms in a phone call.
C)setting out the terms in a memo.
D)shaking hands on the deal.

Question 68

Bagels Inc. and other bakeries refer to a "baker's dozen" as consisting of a collection of thirteen baked goods. According to the UCC, this is

A)a course of dealing.
B)a course of performance.
C)none of the choices.
D)a usage of trade.

Question 69

Joel sells a violin to Key for $5,000, a cello to Leia for $400, and five music stands to Mica for $50. A writing is required to enforce the sale of

A)the violin only.
B)the violin and the cello only.
C)the violin, the cello, and the music stands.
D)none of the choices.

Question 70

Grass Farm LLC offers to sell fifty bales of hay at a certain price to Horse Stable Inc. The owner of the stable responds, "We agree if you agree to make it sixty bales for the price." Their contract is formed according to

A)the new terms of the acceptance.
B)whatever is reasonable.
C)the terms of the original offer.
D)none of the terms.

Question 71

Under a contract with Assemble Inc. for the delivery of a shipment of TV sets, Buyers Store refuses to pay for sets with cracked cases. Assemble files a suit against Buyers, claiming that the defendant assumed the risk of damaged goods. The court may allow evidence of this term if it finds that the parties' contract is

A)fully integrated.
B)not fully integrated.
C)none of the choices.
D)a complete and final statement of their agreement.

Question 72

Under a contract with Fresh Farm LLC for a delivery of vegetables, Growers Mart refuses to pay for some of the produce. The buyer contends that the practice in the trade with respect to payment for spoiled produce justifies its refusal to pay. Growers Mart is arguing that the court should take into account

A)course of dealing.
B)course of performance.
C)usage of trade.
D)none of the choices.