Deck 18: Introduction to Sales and Lease Contracts

Question 1

The UCC imposes some different rules on merchants.

Answer 1

True

Question 2

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

Answer 2

False

Question 3

A firm offer by a merchant may be oral.

Answer 3

False

Question 4

A merchant is a person who deals in goods of the kind involved in the sales contract or who holds herself or himself out as having skill or knowledge peculiar to the practices or goods being purchased or sold.

Question 5

According to the UCC,one open term will cause a sales contract to fail for indefiniteness.

Question 6

Goods associated with real estate never fall within the scope of UCC Article 2.

Question 7

When no delivery terms are specified in a contract for a sale of goods,there is no basis for determining a remedy.

Question 8

UCC Article 2 applies to sales transactions between all buyers and sellers.

Question 9

Intangible property has conceptual existence and thus comes under Article 2.

Question 10

Under the UCC,good faith means honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade.

Question 11

To be characterized as a "good" under the UCC,an item of property must be movable.

Question 12

Under the UCC,parties to sales and lease contracts are NOT free to establish whatever terms they wish.

Question 13

If the parties to a contract for a sale of goods have not agreed on a price,a court will determine a reasonable price at the time for delivery.

Question 14

The UCC imposes special business standards on casual and inexperienced sellers and buyers.

Question 15

A contract for the sale of minerals is considered to be a contract for the sale of goods if the severance is to be made by the seller.

Question 16

Under the UCC,a contract for a sale of goods that does not include the quantity will not fail for indefiniteness.

Question 17

Goods associated with real estate often fall within the scope of Article 2.

Question 18

For an item to be characterized as a "good" under the UCC,it must be intangible. 

Question 19

A lessor is a party who transfers the right to the possession and use of goods under a lease.

Question 20

Under the UCC,a sale is the passing of title from a seller to a buyer for a price.

Question 21

A court can refuse to enforce a contract that the court deems to have been unconscionable at the time it was made.

Question 22

Mary owns a small real estate company that arranges apartment leases for college students.She leases an apartment for nine months to Sara,a new undergraduate in the area.On her son's eighteenth birthday,Mary gives him a gift of a car.On her daughter's sixteenth birthday,Mary gives her a gift of $500.Mary sells her home gym to her neighbor for $1,000.Article 2 of the UCC covers Mary's 

A) ​lease. 
B) ​gift of the car. 
C) ​gift of $500. 
D) ​sale of the gym.

Question 23

Katlyn pays Mobile Edge Electronics $500 for a tablet.Under the UCC,this is 

A) ​a gift. 
B) ​a lease. 
C) ​a sale. 
D) ​a non-taxable transaction.

Question 24

The UCC requires that the mirror image rule be followed for all acceptances.

Question 25

The rules governing firm offers apply to all merchants.

Question 26

All oral contracts are enforceable under the UCC.

Question 27

The terms of a fully integrated contract can be contradicted by evidence of any prior agreements.

Question 28

In interpreting a commercial agreement,a court will assume that the usage of trade was taken into account when the agreement was phrased.

Question 29

Under the UCC,an offeror must be notified within a reasonable time that the offeree has accepted.

Question 30

Under the UCC,an offeree can accept an offer to buy goods by a prompt shipment of conforming goods.

Question 31

Under the UCC,an agreement modifying a contract needs new consideration to be binding.

Question 32

Under the "partial performance" exception to the UCC,an oral contract for goods worth more than $500 is enforceable if the goods are specially manufactured for a particular buyer.

Question 33

Under the UCC,the meaning of any agreement must be interpreted in light of commercial practices.

Question 34

Under the UCC,prompt shipment of goods is considered an acceptance of an offer to buy the goods.

Question 35

Generally,acceptance of an offer to lease goods may be made in any reasonable manner and by any reasonable means.

Question 36

Jacob offers to sell Bill a valuable collection of baseball cards.In order for the transaction between Jacob and Bill to be considered a sale under the UCC,Bill 

A) ​must pay for the cards in cash. 
B) ​must pay for the cards with services. 
C) ​may pay for the cards with cash, goods, or services. 
D) ​must pay the fair market value of the cards.

Question 37

A course of performance is the conduct that occurs under the terms of a particular agreement.

Question 38

Rally Corporation enters into a contract to sell ski gear to SnoSportz Company,which sells a pair of the skis to Tyra,a consumer,who later sells them to Uli,another consumer.Article 2 of the UCC applies to the sales transactions between 

A) ​all of the buyers and sellers. 
B) ​Rally and SnoSportz only. 
C) ​SnoSportz and Tyra only. 
D) ​Tyra and Uli only.

Question 39

Over the course of a year,Retail Marketers,Inc.,sells goods from its inventory and one of its warehouses.In exchange,Retail receives checks and other items that substitute for cash,which Retail uses to repay a loan from Savings Bank.Article 2 of the UCC governs​ 

A) ​the checks. 
B) ​the payment of the loan. 
C) ​the sale of the buildings. 
D) ​the sale of the goods.

Question 40

Under the UCC,an oral contract for a sale of goods is enforceable once payment has been made and accepted.

Question 41

Savannah and Tim enter into a sales contract for orchids.With respect to the specific contractual provisions set out in the UCC,Savannah and Tim may 

A) ​agree to different terms only to a reasonable extent. 
B) ​agree to different terms unless they "get caught." 
C) ​agree to whatever terms they wish. 
D) ​not agree to different terms.

Question 42

Perfect Potato Chip Company makes an offer that Snack Foods Corporation would like to accept.Under the "mirror image rule" relating to offer and acceptance,an acceptance 

A) ​may include additional terms not contained in the offer so long as they do not materially alter the agreement. 
B) ​may include additional terms not contained in the offer that will be-come part of the agreement if the offeror does not object within a reasonable period of time. 
C) ​must include only those terms and conditions contained in the offer. 
D) ​may contain additional terms as long as all parties agree to the additional terms.

Question 43

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

A) ​a non-taxable event. 
B) ​a consignment. 
C) ​a lease. 
D) ​a sale.

Question 44

Carn' Truck Body & Paint Company orders custom paint from Diverse Hues Inc.,but Diverse does not deliver.Carn' Truck 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 45

Nature's Products,Inc.,sends its standard order form to Interbusiness Distribution Corporation (IDC)to evidence a sale of packing materials.IDC responds with its own standard purchase order form.Additional terms in the purchase order 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) ​the offeror objects to the new terms within a reasonable time. 
D) ​any of the choices.

Question 46

Orange Manufacturing Corporation (OMC)orders twelve job-training and on-the-job safety videos from Plum Productions,Inc.,which delivers the videos to OMC.This is most likely 

A) ​a gift. 
B) ​a lease of goods. 
C) ​a sale of goods. 
D) ​a service contract.

Question 47

Curtis enters into a contract with Drive-Away 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) ​Article 3 of the UCC. 
D) ​the common law only.

Question 48

Megan,who is not an expert on horses,offers to sell a horse,a saddle blanket,and a bridle to her neighbor Nathan for $2,000.Nathan signs the bill of sale and pays the $2,000,but says that he wants a saddle,too.If Megan does not give Nathan a saddle along with the other goods and he files a suit against Megan for breach of contract,the court will probably 

A) ​require Megan to give Nathan a saddle without Nathan paying for it. 
B) ​void the contract and return both parties to their initial status. 
C) ​enforce the contract according to the original terms. 
D) ​require Megan to give Nathan a saddle and Nathan to pay Megan for it.

Question 49

Quality Metals Company and Superior Fabrication,Inc.,enter into a contract under which Quality Metals agrees to deliver a certain quantity of sheet metal to Superior Fabrication 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 50

Medico Inc.enters into a contract to sell medical supplies to New Hospital Corporation,which sells some of the items to Physicians Clinic,which later sells them to Oscar,a patient and consumer.Article 2 of the UCC applies to the sales transactions between 

A) ​all buyers and sellers. 
B) ​Medico and New Hospital only. 
C) ​New Hospital and Physicians Clinic only. 
D) ​Physicians Clinic and Oscar only.

Question 51

TalkTalk,Inc.,offers to buy from Voice Media Corporation (VMC)100,000 smartphones.Without notifying TalkTalk,VMC timely ships phones of a different quality.With respect to the offer and a possible contract,this shipment is an acceptance and 

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

Question 52

Dave leases a bulldozer from Construction Rentals,Inc.Wilson from Construction Rentals delivers the bulldozer to Dave,but does not collect any money.Sally from Construction Rentals picks up the bulldozer from Dave and collects the payment for the lease from Dave on behalf of Construction Rentals.In this situation,the lessee is 

A) ​Wilson. 
B) ​Dave. 
C) ​Sally. 
D) ​Construction Rentals.

Question 53

Wilbert has a lot of property that he wishes to sell.He sells his car to John for $5,000.He sells his bike to Shelby for $600.He sells his extensive vinyl records collection to Dixie May for $1,000.He sells a patent to a device for organizing digital music files to Gary for $400.NOT covered by Article 2 or 2A of the UCC is Wilbert's sale of 

A) ​the car. 
B) ​the bike. 
C) ​the vinyl. 
D) ​the patent.

Question 54

Peter,an agent for Zippy Cars,Inc.,writes a letter to Cassandra on March 1 stating that he will sell her a 2011 Subaru Outback for $20,000 between March 1 and April 30.Peter's letter to Cassandra is 

A) ​a firm offer. 
B) ​an acceptance. 
C) ​a bilateral contract. 
D) ​a breach.

Question 55

Fresh Dairy,Inc.,is the offeror and Gelato Ice Cream Company is the offeree under a unilateral sales contract in which Hector's Helado Corporation is also interested.Gelato is not notified of Fresh Dairy's performance within a reasonable time.Gelato 

A) ​may treat the offer as having lapsed. 
B) ​must assume that Fresh Dairy has started to perform. 
C) ​must contact Fresh Dairy. 
D) ​must notify Hector's.

Question 56

Expert Stitching Corporation enters into a contract to sell denim clothing to Fine Fashion Company,which in turn sells a pair of jeans to Grady,a consumer.In contrast to standards that apply to consumers,the UCC imposes on merchants 

A) ​less strict legal standards. 
B) ​special business standards. 
C) ​stricter ethical standards. 
D) ​the same overall standards.

Question 57

Refined Cereal Grains,Inc.,agrees to sell to Sunny Breakfast Cereal Company a certain quantity of refined oats each week but no mention is made of where the goods are to be delivered.In general,the UCC requires that the delivery take place at​ 

A) ​a neutral place of business halfway between the parties' locations. 
B) ​a "reasonable" place of delivery. 
C) ​Refined Cereal's place of business. 
D) ​Sunny's place of business.

Question 58

Jamie is redoing his kitchen and decides he needs a floor sander to complete the job.Jamie tells Rachel,his neighbor,that he needs a floor sander.Rachel tells Jamie to call Home Repair Rentals,Inc.Home Repair Rentals leases Jamie a floor sander.In this transaction the lessor is 

A) ​Jamie. 
B) ​Rachel. 
C) ​Home Repair Rentals. 
D) ​both Jamie and Rachel.

Question 59

In a dispute over a sale involving a bicycle,Dain argues that as to this deal Emil's Hobby Shop,where Dain bought the bike,is a merchant.A court may determine whether Emil's is a merchant by assessing whether 

A) ​it has sold any bikes within the last year. 
B) ​it holds itself out by occupation as having knowledge or skill unique to the bike in the transaction. 
C) ​its owner enjoys biking. 
D) ​it subscribes to Bike, a biweekly trade magazine.

Question 60

County Dentists Clinic offers to buy from Dental & Medical Supplies Company a certain quantity of floss and other items for a certain price.Dental & Medical can accept the offer by 

A) ​a material alteration of the terms within a reasonable time. 
B) ​a promise to ship or a prompt shipment of the goods. 
C) ​a prompt shipment of the goods only. 
D) ​a shipment of nonconforming goods with a notice of accommodation.

Question 61

Quinn enters into a series of agreements with Reba involving a sale of a Suite Dreams Motel,including the land,building,furnishings,shares of stock in Suite Dreams Company,and a contract with Trudy to create an ad campaign.Reba suspects that Quinn may be misrepresenting the facts.The UCC Statute of Frauds governs 

A) ​the sale of any of the property evidenced by a writing. 
B) ​the entire deal, including the marketer's services. 
C) ​the sale of the furnishings priced at $500 or more. 
D) ​the sale of the land and the building.

Question 62

Raul agrees to ship to Ben one hundred ceiling fans for $5,000.Raul initials his notes of the deal,which include the terms,and files the notes in his office.Ben initials his own notes of the deal,which include the terms,and files the notes in his office.Raul fails to ship the fans.Against Raul,as a contract,the deal is 

A) ​enforceable, because under the UCC a contract need not written. 
B) ​enforceable, because Raul's initialed notes are a sufficient writing. 
C) ​enforceable, because Ben's initialed notes are a sufficient writing. 
D) ​not enforceable.

Question 63

iSharp,Inc.,and Jenene,the owner of a Kitchen Time shop,orally agree to a sale of knives and other utensils for $12,000.Jenene gives iSharp a check for $4,000 as a partial payment.This contract is​ 

A) ​enforceable to the extent of $4,000. 
B) ​fully enforceable because it is for specially selected goods. 
C) ​fully enforceable because it is oral. 
D) ​not enforceable.

Question 64

Jackson owns an antiques store.He sells a grand piano to Fred for $5,000,a old jukebox to Sam for $499,an antebellum chest of drawers to Josephine for $659 and a gold ring to Wendy for $999.Which of Jackson's sales must be in writing to be enforceable? 

A) ​The grand piano only 
B) ​The grand piano and the gold ring only 
C) ​The grand piano, the chest of drawers and the gold ring only 
D) ​The grand piano, the chest of drawers, the jukebox and the gold ring

Question 65

Downtown Contractors and Equipment Rental Corporation are parties to an oral agreement for a one-year lease of a crane with payments totaling more than $10,000.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 66

Bert's Bagels & Nosh,Inc.,and other bakeries refer to a "baker's dozen" as consisting of a collection of thirteen baked goods.This is an example of 

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

Question 67

Fact Pattern 18-1Olga enters into a contract to buy a refrigerator from a Prairie States Appliance store with the price to be paid in monthly installments. After thirty-six months of payments, Olga has paid more than twice the price of a similar stove. Eighteen payments remain due under the contract.
Refer to Fact Pattern 18-1.Olga files a suit against Prairie States,claiming that their contract is so unfair and one sided that it would be unreasonable to enforce it.Olga is asserting 

A) ​the concept of good faith. 
B) ​the principle of fair trade. 
C) ​the predominant-factor test. 
D) ​the doctrine of unconscionability.

Question 68

Clean Machines Company makes washing machines.Over the phone,Clean offers to sell Dealers 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.Dealers 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 69

Trend-Rite Clothiers,Inc.,sells t-shirts to Brand Name Stores,Inc.,under an existing contract.When textile costs increase,Brand agrees to a price increase,but later wants to cancel the contract.Brand may 

A) ​cancel the contract immediately. 
B) ​cancel the contract only after accepting a final shipment. 
C) ​cancel the contract only on reasonable notice. 
D) ​not cancel the contract.

Question 70

Tune Products,Inc.,offers to sell to Unlimited Sales Company one hundred MP3 players at $50 a piece,subject to certain specific delivery dates.Unlimited replies with a signed purchase order that reads,"Accept your offer for 100 I-appliances at $50 each.Must be delivered to our warehouse." Tune does not respond or deliver the goods.Unlimited files a suit for breach of contract,to which Tune answers that there is no contract because Unlimited's purchase order contained additional terms and is not signed by Tune.Can Unlimited recover? Explain.

Question 71

Fact Pattern 18-1Olga enters into a contract to buy a refrigerator from a Prairie States Appliance store with the price to be paid in monthly installments. After thirty-six months of payments, Olga has paid more than twice the price of a similar stove. Eighteen payments remain due under the contract.
Refer to Fact Pattern 18-1.Under the UCC,the court can evaluate the contract to determine whether it was unreasonably unfair and one sided 

A) ​at the time it was made. 
B) ​at the end of its term. 
C) ​in the middle of its performance. 
D) ​at the time of Olga's suit.

Question 72

Great Grain Farms offers to sell Hearty Bakeries,Inc.,fifty bushels of wheat.Hearty's representative Milena responds,"We agree to buy fifty bushels only if the wheat is Grade A quality." Between Great Grain and Hearty 

A) ​a contract is formed. 
B) ​a contract is formed only if Great Grain can deliver the wheat fast. 
C) ​Milena's statement is not an acceptance. 
D) ​Milena's statement is an acceptance.