Deck 14: Sales

Question 1

A buyer has an absolute right to reject non-conforming goods as long as the rejection is timely.

Answer 1

False

Question 2

A buyer's material breach gives the seller the right to refuse to deliver the goods.

Answer 2

True

Question 3

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?

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.

Answer 3

B

Question 4

Harriett raises and sells hippos. In order to keep her hippos happy and healthy, she feeds them Hippo Chow, which she buys from the local pet store. Under the UCC, Harriett is

A)a merchant of both hippos and Hippo Chow.
B)a merchant of hippos, but not of Hippo Chow.
C)a merchant of Hippo Chow, but not of hippos.
D)not a merchant of either hippos or Hippo Chow.

Question 5

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

Question 6

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

Question 7

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

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 all 50 states
D)to come up with a boilerplate form to be used in all sales transactions

Question 8

Pizazz, Inc. sold a condo on the 34^th floor in a building in downtown Chicago. The condo is considered a "good" and the contract will be  governed by Article 2 of the UCC.

Question 9

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.

Question 10

Under the UCC Statute of Frauds, the writing for a sale of goods must

A)state the quantity.
B)state the price.
C)be signed by both parties.
D)be notarized.

Question 11

If a seller includes an express warranty in the written sales contract, any disclaimer is invalid.

Question 12

Megan agrees to sell Nancy her Rolex watch, but she does not specify a price. In such a case, the court would not enforce the agreement because all of the essential terms are not present.

Question 13

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

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 the terms of the offeree control.
D)have a contract, and the different terms will cancel each other out.

Question 14

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

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 15

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

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 16

Mark, a power tool salesman, promises Jill, a customer, that the Turbo Power Hedge Trimmer 1000 will easily cut through bamboo up to 3 inches thick. Mark's statement constitutes an express warranty if Jill purchases the hedge trimmer.

Question 17

Wimble ordered 1,000 pro-quality luminescent orange tennis balls from Sports Unlimited at a cost of $800. On June 1, Sports Unlimited shipped standard white tennis balls, but Wimble rejected them. Wimble bought the same number of pro-quality luminescent orange balls from another supplier the same day for $650. In a suit against Sports Unlimited, Wimble may recover $800.

Question 18

In a mixed contract involving the sale of both goods and services, Article 2 of the UCC will govern if the predominant purpose is the sale of goods.

Question 19

In which of the following cases is the predominant purpose the sale of goods?

A)Juanita goes to her dentist to have a cavity filled; while there, she buys a tube of whitening toothpaste the dentist sells at the front desk.
B)Anderson makes an appointment with his stockbroker to purchase 100 shares of Microsoft stock.
C)Millicent purchases ten bags of gravel from a landscaping company; an employee carries them to her truck and loads them for her.
D)Thomas purchases a membership to a health club; his membership entitles him to a free bottle of water with every visit.

Question 20

The UCC is federal legislation enacted by Congress.

Question 21

Tu-thumbs buys a used paint sprayer from the local paint store. The sprayer had a large sign on it that said "AS IS." The dealer made no promises or statements concerning the performance of the paint sprayer. When Tu-thumbs attempts to spray paint his house, the trigger on the sprayer sticks in the "on" position and before Tu-thumbs can pull the electrical cord to cut the power, paint is sprayed all over his prize Borzoi dog that is scheduled to be shown in a dog show the next day. Tu-thumbs sues the dealership. Who wins?

A)Dealer wins; there were no express warranties, and all implied warranties have been successfully disclaimed.
B)Tu-thumbs wins; he can recover on the basis of express warranties.
C)Tu-thumbs wins; he can recover on the basis of the implied warranty of merchantability because the word "merchantability" was not used in the disclaimer.
D)Dealer wins; even though there were implied warranties, the damage to the dog could not have been foreseen.

Question 22

A baseball team ordered 500 wooden baseball bats from Bats, Inc., for delivery on June 1. On May 15, the ball team received 500 aluminum bats instead of the wooden ones. As of May 16, Bats, Inc.

A)may cure before June 1.
B)has breached the contract and is liable for damages.
C)has breached the contract only if the baseball team rejects the goods.
D)may cure if the baseball team gives Bats, Inc. permission to do so.

Question 23

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?

Question 24

Oxtren, Inc. is a tools wholesaler. Oxtren sent M&E Tools a purchase order offering to buy 200 Model 308 milling and drilling machines with R-8 spindles. The purchase order stated the credit term to be 2% discount if payment was made in 10 days, with the full amount due in 30 days. M&E responded with an acceptance form accepting the offer. The acceptance form, however, stated that full payment was due on delivery and that disputes under the contract would be settled by arbitration.
(A)Do the parties have an agreement?
(B)What is the payment term?
(C)Is the arbitration clause part of the agreement?

Question 25

A buyer who accepts goods but notifies the seller the goods are non-conforming

A)cannot recover any damages.
B)can recover the difference between the goods as promised and as delivered, plus incidental and consequential damages.
C)cannot recover incidental damages.
D)cannot recover consequential damages.

Question 26

What is the difference between incidental damages and consequential damages?

Question 27

Implied warranties are created by

A)the seller's words or actions.
B)the buyer's intentions.
C)the UCC itself.
D)both the seller and the buyer.

Question 28

Jasmine agrees to purchase 1,500 tons of recycled glass from Louie, the price to be determined at the time of delivery. Is such an agreement enforceable? Compare the common law with Article 2 of the UCC.

Question 29

Which of the following statements is NOT TRUE regarding the buyer's right to cover?

A)The buyer must cover.
B)The measure of damages in a cover is the difference between the cover price and the contract price.
C)Cover must be done by reasonably obtaining substitute goods.
D)Consequential damages can be recovered in addition to the cover damages.

Question 30

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?

Question 31

A statement that a particular warranty does not apply is called a(n)

A)disclaimer.
B)infringement.
C)limitation of remedy clause.
D)voidable title.

Question 32

If a buyer does not receive goods by the contract deadline, remedies available include all of the following EXCEPT

A)incidental and consequential damages.
B)cover.
C)damages for non-delivery.
D)cure.

Question 33

Under the UCC, a buyer's right to reasonably obtain substitute goods because another party has not honored a contract is called

A)breach.
B)cure.
C)cover.
D)consideration.

Question 34

Inez contracted with Filippo Furnaces Co. for the installation of a new furnace. Inez selected the furnace she wanted, accepting no suggestions from Filippo Furnaces' heating engineer. The furnace operated fine, but it did not heat the entire house. The size of the blower on the furnace was too small to accommodate the third floor of the house. Inez sued Filippo Furnaces Co. for the breach of the implied warranties of merchantability and fitness. What result?

Question 35

If a seller cures within a reasonable amount of time, the contract

A)has been performed.
B)is breached.
C)is void.
D)is voidable.

Question 36

Mason bought a rotisserie in preparation for a party he was planning. When he put a chicken on the rotisserie, it would not rotate, but stayed in one position where it burned the chicken on one side and left it raw on the other. When he returned the rotisserie to the store, the salesperson disclaimed any responsibility because he had never told Mason the rotisserie would rotate the food as it cooked. Does Mason have any recourse?

A)No, the salesperson did not make any express warranties.
B)Yes, the salesperson made an express warranty just by selling the goods.
C)Yes, although the salesperson did not make any express warranties, the UCC imposes an express warranty on the sale.
D)Yes, although the salesperson did not make any express warranties, the UCC imposes an implied warranty of merchantability under which the rotisserie is guaranteed to be fit for the ordinary purposes for which it is used.

Question 37

Which of the following would be a breach of the implied warranty of merchantability?

A)knife that cuts its user when slicing a bagel
B)radio that does not pick up FM signals
C)match that burns a spot in the carpet when accidentally dropped
D)dress watch that does not keep accurate time after getting wet