Deck 11: Domestic and International Sales

Question 1

If the sale of a good also includes a service contract, it will not fall under Article 2.

Answer 1

False

Question 2

A contract for the sale of a patent may not be under UCC Article 2.

Answer 2

True

Question 3

Modern commercial law was largely invented by British judges and legal experts who worked for years in the 1840's to replace outdated legal rules that were blocking the development of commerce.

Answer 3

False

Question 4

Every state, except Louisiana, has adopted Article 2 of the UCC.

Question 5

Anyone who presents themselves as having knowledge about a product will be held to the UCC standard of a merchant, even if the person does not have skilled knowledge.

Question 6

If the sale of a good also involves services, such as installation of the goods, the contract falls under the Article 2.

Question 7

Modern commercial law traces its roots to ancient rules known as the law merchant.

Question 8

Only eight states have not adopted Article 2 of the UCC.

Question 9

Before the UCC contracts for the sale of goods were primarily governed by common law, which differed from state to state.

Question 10

Article 2 requires sales contracts to be in good faith.

Question 11

Article 2 of the UCC applies to all sales agreements, except those between merchants.

Question 12

In medieval Europe, rules governing trading among merchants developed called the law merchant.

Question 13

Before the UCC interstate contracts for the sale of goods were primarily governed by federal common law.

Question 14

Members of the public who enter into a sales contract under Article 2 are subject to the same standard as are merchants.

Question 15

In a dispute with a stock broker over the sale of stock, a lawyer will ordinarily bring the lawsuit under Article 2 of the UCC.

Question 16

In contrast to the law of contracts, Article 2 of the UCC specifically governs service contracts and contracts involving real estate.

Question 17

The UCC does not apply to the sale of investment securities.

Question 18

Many land experts prefer to write contracts for the sale of property under Article 2, as it tends to favor sellers.

Question 19

If the sale of a good involves services that are of greater value than the goods themselves, the contract falls under the common law, not Article 2.

Question 20

Congress adopted the UCC in the early 1950's to facilitate trade and reduce the confusion caused by different common law rules in different states.

Question 21

Although all parties to a sale under the UCC must meet the UCC's good faith standard, merchants must meet even higher standards of honesty and good faith.

Question 22

Parties to the sale of some goods may control, by contract, when title to the goods is to pass.

Question 23

Under Article 2, if the legal title to a good does not pass, there has not been a sale under the UCC.

Question 24

Article 2A is a recent addition to the UCC that extends it to cover the sale of real estate in commercial transactions.

Question 25

The UCC requires less formality than does the common law of contracts.

Question 26

Article 2A is a recent addition to the UCC that extends it to cover certain leases of personal property.

Question 27

In contrast to the common law of contracts, a merchant's firm offer under Article 2 may be revoked within a reasonable time without consideration and is irrevocable with consideration for a period not to exceed 3 months.

Question 28

If your laptop computer is stolen, and then sold by the thief to a buyer who does not know it is stolen (is "innocent"), new title is created for the innocent buyer.

Question 29

In Crest Ridge Construction v. Newcourt, where Newcourt demanded payment in full before delivery because Crest Ridge did not have a credit history, the court held that it would look to the dealings of the parties instead of the written contract to determine the intent of the parties.

Question 30

In Crest Ridge Construction v. Newcourt, where Newcourt demanded payment in full before delivery because Crest Ridge did not have a credit history, the court held Newcourt had the right to impose that payment term given the reality of the matter.

Question 31

If parties to the sale of goods under Article 2 fail to state when title passes, then it is presumed to pass when the goods are manufactured and ready for shipment.

Question 32

In Crest Ridge Construction v. Newcourt, where Newcourt demanded payment in full before delivery because Crest Ridge did not have a credit history, the court held Crest Ridge could sue for the higher price it had to pay another supplier for the same goods.

Question 33

A contract can be formed under Article 2 of the UCC even if some of the offer's major terms are omitted or are simply left open for determination later.

Question 34

Under Article 2, if the offeror does not clearly state a particular method of acceptance, a contract is formed when the offer is accepted in any reasonable manner under the circumstances.

Question 35

Jones is "a merchant" under Article 2 even if he knows little about textile machinery but hires Smith as his agent to sell textile machinery. Smith has 25 years' experience in the textile industry.

Question 36

The UCC, compared to the common law, prefers standard form contracts.

Question 37

Under both Article 2 and the common law, if parties intend to enter into a binding agreement, but are unable to agree to all major terms, a contract will be formed with the missing terms supplied by the parties at a later date or reasonable terms will be imposed by the court if necessary.

Question 38

Under the common law, a contract is not formed unless there is no question that an offer has been accepted. Article 2 provides that a contract can be formed in any manner, including "conduct" that shows an agreement between the parties.

Question 39

Under Article 2, a sale occurs when there is a passing of title from the seller to the buyer for a price.

Question 40

Article 2 allows the parties to enter into a binding agreement even though the contract price is to be determined at a later date.

Question 41

In Orkal Industries v. Array Connector, where Orkal bought parts from Array by sending an order form, but Array confirmed with its own form that contained different terms. Orkal did not object to the different terms until litigation arose later at which point the added terms mattered. The appeals court held that if the changed terms were minor they would be binding, but material changes require assent under the UCC.

Question 42

With respect to parol evidence, the common law of contracts and Article 2 are the same.

Question 43

Under the UCC, when contracts go back and forth between parties with conflicting terms, often written on standard forms, it is referred to as the "battle of the forms."

Question 44

According to Article 2's statute of frauds provision, all written contracts under the UCC must specify all terms of the contract.

Question 45

Under Article 2, an acceptance is invalid if the parties intend to form a contract but the offeree's acceptance contains different terms from the original offer.

Question 46

The statutes of frauds provision of the UCC states that contracts for the sale of goods worth $500.00 or more must be "sealed."

Question 47

Article 2 uses the common law rule of each state to determine when an offer has been accepted to form a contract.

Question 48

Under the UCC, if a party modifies a proposed sales contract, new consideration must be provided for the change for a contract to be formed.

Question 49

Under Article 2's statute of frauds, the basic rule is that a contract for the sale of goods priced at $5000 or more is not enforceable unless it is in writing and signed by the party against whom enforcement is sought.

Question 50

Like the common law, the UCC provides that the parties must exchange new consideration to modify an existing sales contract.

Question 51

In Orkal Industries v. Array Connector, where Orkal bought parts from Array by sending an order form, but Array confirmed with its own form that contained different terms. Orkal did not object to the different terms until litigation arose later at which point the added terms mattered. The appeals court held that under the UCC a seller cannot change material terms of an order without express permission..

Question 52

Under the common law of contracts, unlike under Article 2, an acceptance may not deviate from the terms of the offer without being either a rejection or a counteroffer.

Question 53

Under the UCC, an offeror may not impose a term in an offer that does not allow the offeree to change terms of the offer.

Question 54

In Orkal Industries v. Array Connector, where Orkal bought parts from Array by sending an order form, but Array confirmed with its own form that contained different terms. Orkal did not object to the different terms until litigation arose later at which point the added terms mattered. The appeals court held that under the UCC a seller cannot change material terms of an order without express permission..

Question 55

A contract can exist under the UCC even if some terms are changed or added by the offeree.

Question 56

Under the UCC, when a "battle of the forms" exists, the rule is generally that no contract was formed.

Question 57

The UCC follows a different parol evidence rule than does the common law of contracts.

Question 58

Under the UCC, parol evidence may be admitted to clarify customary trade practices.

Question 59

"Shrinkwrap" agreements that come attached to products have no legal validity.

Question 60

The UCC's statute of frauds provision says that all service contracts must be in writing.

Question 61

In Griffith v. Clear Lakes Trout, where a dispute arose over "market size" trout, the court held that it would look to the history of the dealings between the parties to see what they believed, in practice, to be the proper size of the fish.

Question 62

If the parties to a contract failed to include a critical term, such as price or quantity, the court may look to normal trade usage to determine what that term should be.

Question 63

Under the common law, buyers may reject goods that do not conform to the contract. The UCC provides the seller with opportunities (limited) to cure the problem.

Question 64

If the delivery terms are not specified in a contract, it must be "reasonable" which is determined by industry custom and intent of the parties.

Question 65

Under the UCC, the court will determine a reasonable price in case a contract is unclear about price and the parties cannot agree.

Question 66

If the delivery terms are not specified in a contract, the normal usage that the courts impose is for the seller to pay for shipping to the buyer's place of business.

Question 67

When a buyer agrees to purchase all the goods produced by a seller, it is called an output contract.

Question 68

If a seller delivers defective good, under the UCC the buyer may not cancel the contract if the seller repairs the goods or replaces them before the deadline in the contract.

Question 69

If a seller delivers defective good, under the UCC the buyer may not cancel the contract if the seller repairs the goods or replaces the goods in a "timely" fashion.

Question 70

If the parties to a contract failed to establish a delivery date in their contract, if a dispute arises over delivery, both parties have the right to abandon the contract.

Question 71

Under the common law, the seller's tender of delivery is required to conform in detail to the terms of the agreement between the parties. In the absence of perfect tender, the buyer can reject that part of shipment that does not conform and accept the remainder.

Question 72

The UCC operates the same as the common law in how it allows courts to fill the gaps left of contracts that have open terms.

Question 73

When a seller agrees to supply all of the goods needed by a buyer, it is called a requirements contract.

Question 74

When a seller agrees to supply all of the goods needed by a buyer, it is called an output contract.

Question 75

When a buyer agrees to purchase all the goods produced by a seller, it is called a requirements contract.

Question 76

If a buyer rejects a shipment of goods as non-conforming, under the UCC the seller may have a right to cure the problem.

Question 77

The UCC generally requires that a contract specify in writing a quantity to be purchased.

Question 78

In Griffith v. Clear Lakes Trout, where a dispute arose over trout, the court held that the buyer, Clear Lakes, had to accept small fish despite their not being "market size," because otherwise Griffith would go bankrupt.

Question 79

In Griffith v. Clear Lakes Trout, where a dispute arose over "market size" trout, the court held that the buyer (Clear Lakes) had the right to expect the seller to grow the trout to a larger size than he had been doing.

Question 80

In meeting her obligation under the UCC, the seller must be concerned about the appropriate manner and timeliness of delivery, the place of tender, and the quality of tender.