Deck 14: Discharge and Remedies

Question 1

The United Nations Convention on Contracts for the International Sale of Goods was offered as a treaty that countries could sign, indicating their willingness to allow the treaty to govern international business-to-business sales contracts.

Answer 1

True
Explanation: The United Nations Convention on Contracts for the International Sale of Goods (CISG) was offered as a treaty that countries could sign, indicating their willingness to allow this treaty to govern international business-to-business sales contracts.

Question 2

All states, except Louisiana, follow the _______________ common law.

A) English
B) French
C) Italian
D) Spanish
E) Welsh

Answer 2

A
Explanation: All states (except Louisiana) follow the English common law.

Question 3

If a shipment contract is vague or ambiguous on the issue, an origin contract will be presumed.

Answer 3

True
Explanation: If the contract is vague or ambiguous, an origin contract will be presumed.

Question 4

The UCC pertains to all business transactions.

Question 5

The UCC was created in ____________.

A) 1980
B) 1964
C) 1952
D) 1943
E) 1935

Question 6

The UCC requires that consideration be provided for the modification of a contract.

Question 7

The UCC does not recognize the concept of unconscionability.

Question 8

Federal law is the primary method by which to interpret sales contracts.

Question 9

FOB and FAS are different terms with the same meaning.

Question 10

The mirror-image rule has been adopted by the UCC.

Question 11

Good faith is generally relevant in determining whether someone has a valid title.

Question 12

Contracts for the sale or lease of goods may be formed even though some terms of the contract or lease are left open.

Question 13

Tender of delivery is the moment goods are picked up by the buyer.

Question 14

Which of the following interprets sales contracts?

A) State common law
B) The Uniform Commercial Code
C) State statutory law
D) State common law, the Uniform Commercial Code, and state statutory law
E) State common law and the Uniform Commercial Code, but not state statutory law

Question 15

If an owner entrusts the possession of goods to a merchant who deals in goods of that kind, the merchant has no authority to transfer any rights in the goods to a buyer in the ordinary course of business.

Question 16

The National Conference of Commissioners on Uniform State Laws adopted the Uniform Internet Act to answer questions pertaining to electronic transactions such as airline tickets purchased online.

Question 17

The rule originates in common law that when a seller transfers goods to a buyer, the buyer gets only voidable title if the buyer is a minor.

Question 18

An insurable interest is the right to insure the goods against any risk exposure such as damage or destruction.

Question 19

If a buyer and seller execute a contract and the seller subsequently places the goods with a common carrier for delivery to the buyer, the parties have executed a common-carrier delivery contract.

Question 20

Identification of when the risk of loss attaches is important in regards to the right of indemnification for damaged goods.

Question 21

The UCC is divided into sections known as _______________.

A) Divisions
B) Articles
C) Subsections
D) Clauses
E) Amendments

Question 22

Under the UCC, how may an acceptance be made?

A) Only be a writing.
B) Only orally or by a writing.
C) Only by electronic communication or by a writing.
D) Only by facsimile or by mail.
E) By any reasonable means of communication.

Question 23

Which of the following do not meet the UCC definition of a good?

A) Real estate
B) Corporate stocks
C) Copyrights
D) Neither real estate, corporate stocks, nor copyrights meet the definition of good
E) Real estate and corporate stocks do not, but copyrights do meet the definition of good

Question 24

Under Article 2 of the UCC which of the following is defined as tangible things which are movable at the time of identification to the contract for sale?

A) Articles
B) Merchandise
C) Goods
D) Attachments
E) Saleable things

Question 25

Under Article 2(A) of the UCC, a _______________ is a person who transfers the right to possession and use of goods under a lease.

A) Relater
B) Seller
C) Lessee
D) Lessor
E) Acquirer

Question 26

Under the UCC, items are ____________ if they exist physically.

A) Merchandise
B) Real
C) Tangible
D) Movable
E) Saleable

Question 27

Under the UCC contracts for the sale of goods must be in writing in order to be enforceable if they are valued at _______________ or more.

A) $100
B) $500
C) $1,000
D) $1,500
E) $5,000

Question 28

A contract that combines a good with a service is a _______________ sale.

A) Combined
B) Mixed
C) Service
D) Goods
E) Total

Question 29

Which of the following is true regarding the mirror-image rule and the UCC?

A) The mirror-image rule applies under the UCC the same as it is applies under common law.
B) The mirror-image rule that applies under common law does not apply under the UCC.
C) The mirror-image rule that applies under the common law applies under the UCC only if a lease is involved.
D) The mirror-image rule that applies under the common law applies under the UCC only if a sale of goods is involved.
E) The mirror-image rule under the UCC does not apply to common law.

Question 30

Which of the following articles of the UCC governs lease contracts?

A) 2
B) 2(A)
C) 4
D) 4(A)
E) 6

Question 31

Under the UCC, when is an acceptance effective?

A) When dispatched.
B) When received.
C) When received only if acceptance by electronic means is made, otherwise on dispatch.
D) When dispatched only if the U.S. mail is used, otherwise on receipt.
E) When dispatched only when the telephone is used, otherwise on receipt.

Question 32

Which of the following applies when Article 2 is silent on an issue of sales contract formation or interpretation and there is no state statutory law in place on that matter?

A) Common law rules.
B) Civil law rules.
C) Federal common law.
D) Federal statutory law.
E) Both federal common law and federal statutory law.

Question 33

What did the court rule on appeal in Alfonso Candela v. Port Motors, Inc., the case in the text in which the plaintiff sued the defendant for breach of warranty of title claiming that he was sold a stolen car?

A) That the defendant passed good title so long as the defendant did not know that the car was stolen.
B) That the defendant passed voidable title so long as the defendant did not know that the car was stolen.
C) That a defendant selling stolen goods, regardless of good faith, can never pass a voidable or good title to the buyer.
D) That a defendant selling stolen goods can pass good title to a buyer so long as the buyer and seller were innocent and not in collusion.
E) That a defendant selling stolen goods does not pass good title but that the risk of loss is on the buyer.

Question 34

Under the UCC lease contracts that require payments of _______________ or more must be in writing in order to be enforceable.

A) $100
B) $500
C) $1,000
D) $1,500
E) $5,000

Question 35

Under Article 2(A) of the UCC which of the following is defined as a transfer of the right to possession and use of goods for a term in return for consideration?

A) A sale of goods
B) A lease
C) A transfer
D) A rental
E) A consignment

Question 36

Under Article 2 of the UCC, which of the following consists of the passing of title from the seller to the buyer for a price?

A) A lease
B) A transaction
C) A transfer of use
D) A sale
E) A negotiated transfer

Question 37

Under Article 2(A) of the UCC, a _______________ is a person who acquires the right to possession and use of goods under a lease.

A) Buyer
B) Seller
C) Lessee
D) Lessor
E) Acquirer

Question 38

Which of the following articles of the UCC governs sales contracts?

A) 2
B) 2(A)
C) 4
D) 4(A)
E) 6

Question 39

Under the UCC, a contract or contract provision is said to be _______________ if it is so unfair that a court would be unreasonable if it enforced the contract.

A) Unconscionable
B) Unreasonable
C) Voidable
D) Viable
E) Ancillary

Question 40

Which of the following are considered goods under the UCC?

A) Minerals taken from real estate and sold by the owner.
B) Soil taken from real estate and sold by the owner.
C) The right, sold by the owner to another party, to remove soil from real estate.
D) Minerals taken from real estate and sold by the owner; soil taken from real estate and sold by the owner; and the right, sold by the owner to another party, to remove soil from real estate.
E) Minerals taken from real estate and sold by the owner and soil taken from real estate and sold by the owner; but not the right, sold by the owner to another party, to remove soil from the real estate.

Question 41

Which of the following was offered as a treaty that countries could sign, indicating their willingness to allow this treaty to govern international business-to-business sales contracts?

A) The International Convention of Contracts for International Sales
B) The Federation Convention on the Uniform Commercial Code
C) The Worldwide Federation Convention on the Sale of Goods
D) The United Nations Convention on Contracts for the International Sale of Goods
E) The International Agreement on the Sale of Goods

Question 42

Which of the following occurs when purchased goods are in some kind of storage under the control of a third party, such as a warehouseman?

A) A goods-in-bailment contract
B) A simple delivery contract
C) An average delivery contract
D) A conditional sales contract
E) A goods-in-transfer contract

Question 43

With a simple delivery contract, when is an insurable interest in the buyer created?

A) When money is transferred
B) When the items are delivered
C) When the buyer takes possession
D) When the goods are identified to the contract
E) When the goods are tendered for delivery

Question 44

With a simple delivery contract in which the seller is a merchant, which party sustains a loss if, through no fault of either party, the goods are destroyed through fire prior to delivery?

A) The seller
B) The buyer
C) Both the buyer and seller with the loss being proportioned 50% to the buyer and 50% to the seller
D) Both the buyer and seller with the loss being proportioned 75% to the buyer and 25% to the seller
E) Both the buyer and seller with the loss being proportioned 25% to the buyer and 75% to the seller

Question 45

Which of the following occurs when goods are delivered to a buyer via a common carrier, such as a trucking line?

A) A simple delivery contract
B) A common-carrier delivery contract
C) A goods-in-bailment contract
D) An average delivery contract
E) A delivery-carrier contract

Question 46

Which of the following are types of common-carrier delivery contracts?

A) Origin contracts
B) Destination contracts
C) Transfer contracts
D) Origin, destination, and transfer contracts
E) Origin and destination contracts, but not transfer contracts

Question 47

With a simple delivery contract involving goods sold by a merchant that are to be delivered, when does risk of loss transfer to the buyer?

A) When money is transferred
B) When the items are tendered
C) When goods are delivered to the buyer
D) One day after goods are identified to the contract
E) When goods are identified to the contract

Question 48

In an origin contract, when does title pass to the buyer?

A) When money is transferred to the seller
B) When the items are delivered to the buyer
C) At the time and place of shipment
D) One day after goods are identified to the contract
E) When goods are identified to the contract

Question 49

Which of the following occurs when the sale itself is contingent on approval?

A) A transferable contract
B) An unapproved contract
C) An average delivery contract
D) A conditional sales contract
E) A goods-in-transfer contract

Question 50

Which of the following occurs when the purchased goods are transferred to the buyer from the seller at either the time of the sale or some time later by the seller's delivery?

A) A voidable delivery contract
B) An average delivery contract
C) A simple delivery contract
D) A complex delivery contract
E) An acknowledged sale

Question 51

Which of the following is not true title such as when someone purchases stolen goods?

A) Void title
B) Voidable title
C) Good title
D) Examined title
E) Substantiated title

Question 52

Which of the following requires that the seller make proper shipping arrangements and deliver goods to the buyer via a common carrier but not require a guarantee of the safety of goods to their destination?

A) Origin contracts
B) Destination contracts
C) Transfer contracts
D) Origin contracts, destination contracts, and transfer contracts
E) Shipment and destination contracts, but not transfer contracts

Question 53

With a simple delivery contract, when does title transfer to the buyer?

A) When money is transferred
B) When the items are delivered
C) When the buyer takes possession
D) One day after goods are identified to the contract
E) When goods are identified to the contract

Question 54

Which of the following types of title occurs in certain situations where the contract between the original parties would be void but the goods have already been sold to a third party?

A) Releasable
B) Voidable
C) Good
D) Substantiated
E) Excised

Question 55

Which of the following is true if an owner entrusts the possession of goods to a merchant who deals in goods of that kind?

A) The merchant can transfer all rights in the goods to a buyer in the ordinary course of business.
B) The merchant can only transfer voidable title until any funds in the possession of the merchant are transferred to the owner.
C) The merchant can only transfer void title until the owner approves the sale.
D) The merchant can only transfer temporary title until any funds in the possession of the merchant are transferred to the owner.
E) The merchant must have any purchaser sign a document acknowledging that the purchaser will return the goods upon the request of the owner.

Question 56

Which of the following is the right to insure goods against any risk exposure such as damage or destruction?

A) An insurable interest
B) A compensable interest
C) A paid interest
D) A collateral interest
E) A valid interest

Question 57

If a buyer and seller execute a contract and the seller subsequently places the goods with a common carrier for delivery to the buyer, which of the following is true regarding the statue of the common carrier?

A) The common carrier is the agent of the seller.
B) The common carrier is the agent of the buyer.
C) The common carrier is the agent of both the seller and the buyer.
D) The common carrier is a fiduciary.
E) The common carrier is an independent contractor.

Question 58

With a simple delivery contract in which the seller is not a merchant, which party sustains a loss if, through no fault of either party, the goods are destroyed through fire prior to delivery?

A) The seller if tender of delivery has occurred
B) The buyer if tender of delivery has occurred
C) Both the buyer and seller with the loss being proportioned 50% to the buyer and 50% to the seller
D) Both the buyer and seller with the loss being proportioned 75% to the buyer and 25% to the seller
E) Both the buyer and seller with the loss being proportioned 25% to the buyer and 75% to the seller

Question 59

What actions does the UCC provide that a court can take if it discovers that a contract or lease provision is unconscionable?

A) The court must refer the matter to mediation.
B) The court must refer the matter to arbitration.
C) The court can only refuse to enforce the parts of the contract or lease that are unfair.
D) The court either can refuse to enforce the contract or lease, or can enforce the parts of the contract or lease that are fair.
E) The court has no power to enforce the lease and must award the innocent party punitive damages.

Question 60

In an origin contract who bears the risk of loss while the goods are in transit?

A) The seller
B) The buyer
C) Both the buyer and seller with the loss being proportioned 50% to the buyer and 50% to the seller
D) Both the buyer and seller with the loss being proportioned 75% to the buyer and 25% to the seller
E) Both the buyer and seller with the loss being proportioned 25% to the buyer and 75% to the seller

Question 61

What may a buyer do if a seller does not provide goods that were described in the contract?

A) Accept the nonconforming goods as is
B) Reject the goods subject to the seller's curing the deficiency in the goods
C) Reject the goods if no cure is possible
D) Accept the nonconforming goods as is, reject the goods subject to the seller's curing the deficiency in the goods, or reject the goods if no cure is possible
E) Nothing for at least 30 days

Question 62

Which of the following does a seller have in order to indicate ownership of goods when goods are in some kind of storage so the seller cannot transfer physical possession of them?

A) A negotiable document of title.
B) A nonnegotiable document of title.
C) A contract or other instrument showing ownership that is not a negotiable or nonnegotiable document of title.
D) Either a negotiable document of title, a nonnegotiable document of title, or a contract or other instrument showing ownership that is not a negotiable or nonnegotiable document of title.
E) A negotiable document or a nonnegotiable document of title only.

Question 63

Reference - Used Car Problems. Marcy purchased a used car from ABC Motors. Six months later the police seized the car from Marcy on the basis that it was a stolen vehicle. Marcy asked for her money back from ABC Motors. The manager there told her that the car was not stolen; that even if it were stolen, ABC Motors acted in good faith with no knowledge of a theft; and that, therefore, no refund was legally required. ABC Motors had also sold a used car to Frank who wrote a bad check for the car and left town but not before he sold the car to Betty who paid a fair price for the car believing that Frank had all rights to sell it. ABC Motors asked Betty to return the car, but she told ABC to forget it. Assuming that the thief who stole the car sold and delivered it to ABC Motors without the knowledge of any representative of ABC Motors of the theft, what kind of title did ABC Motors have?

A) Void.
B) Valid.
C) Voidable so long as ABC Motors can prove that it had never been charged with dealing in stolen merchandise.
D) Voidable so long as ABC Motors can prove that none of its representatives were negligent in disregarding evidence of the theft at any time prior to its resale to Marcy.
E) Voidable so long as no manager of ABC Motors had made an affirmative representation that the car was not stolen.

Question 64

Reference - Carpet Woes. Beau went shopping at ABC Carpet. He saw some carpet he liked but could not make up his mind. The manager at ABC Carpet wrote down the proposed purchase price for him along with a statement that the price would be good for three months. Two months later Beau went back to ABC Carpet to purchase the carpet. Unfortunately, the price had gone up. Beau showed the manager his writing and guaranteed price, but the manager said that the offer was no longer good. Although he had to pay more than the ABC manager had initially promised, Beau proceeded to purchase his carpet from ABC Carpet, and he also contracted with ABC to do the installation. Unfortunately, Beau almost immediately started to have problems with the carpet. Beau told the sales manager of ABC Carpet that he was planning on bringing suit for breach of warranty. The sales manager, however, told him that the breach of warranty provisions only applied to sales of goods and that the carpet purchase was for installation, a service. Which of the following is true regarding whether the UCC applies to the contract Beau had with ABC Carpet?

A) Common law will be applied, not the UCC, because the contract was mixed.
B) The UCC will be applied, not common law because the contract was mixed.
C) The court will determine whether the predominant purpose of the contract was the sale of goods in which case the UCC would apply.
D) The court will apply the service-warranty test to determine whether the predominant purpose of the contract was the provision of a service in which case the UCC would apply.
E) The court will apply the service-warranty test to determine whether the predominant purpose of the contract was the sale of goods in which case the UCC would apply.

Question 65

Which of the following would the absence of words "to the order of" indicate in a goods-in-bailment contract?

A) A negotiable document
B) A nonnegotiable document
C) A shipment contract
D) An origin contract
E) Nothing, there is no such thing as a goods-in-bailment contract

Question 66

Which of the following is true regarding transportation costs when the designation FOB is used?

A) The selling price includes transportation costs.
B) The selling price does not include transportation costs.
C) Both the buyer and seller bear transportation costs with the costs apportioned at a rate of 50% to the buyer and 50% to the seller.
D) Both the buyer and seller bear transportation costs with the loss being proportioned 75% to the buyer and 25% to the seller.
E) Both the buyer and seller bear transportation costs with the loss being proportioned 25% to the buyer and 75% to the seller.

Question 67

Which of the following occurs in a CIF agreement?

A) Risk of loss occurs when goods are identified to the contract.
B) Risk of loss occurs when the goods are delivered to the buyer.
C) Risk of loss remains with the seller for 5 days after the sale.
D) Risk of loss remains with the seller for 5 days before the sale.
E) The seller puts the goods in possession of a carrier before the risk passes to the buyer.

Question 68

What does the term CIF when used as a shipping term represent?

A) Cost, insurance, and freight
B) Collateral, insurance, and freight
C) Commerce, insurance, and freight
D) Cost, indemnity, and freight
E) Cost, insurance, and flight

Question 69

Reference - Carpet Woes. Beau went shopping at ABC Carpet. He saw some carpet he liked but could not make up his mind. The manager at ABC Carpet wrote down the proposed purchase price for him along with a statement that the price would be good for three months. Two months later Beau went back to ABC Carpet to purchase the carpet. Unfortunately, the price had gone up. Beau showed the manager his writing and guaranteed price, but the manager said that the offer was no longer good. Although he had to pay more than the ABC manager had initially promised, Beau proceeded to purchase his carpet from ABC Carpet, and he also contracted with ABC to do the installation. Unfortunately, Beau almost immediately started to have problems with the carpet. Beau told the sales manager of ABC Carpet that he was planning on bringing suit for breach of warranty. The sales manager, however, told him that the breach of warranty provisions only applied to sales of goods and that the carpet purchase was for installation, a service. Which of the following is true regarding the enforceability of the offer made by the manager at ABC Carpet?

A) ABC Carpet is not bound by the offer because Beau did not provide any consideration.
B) ABC Carpet is bound by the offer, but only for a period of seven days.
C) ABC Carpet is bound by the offer, but only for a period of ten days.
D) ABC Carpet is not bound by the offer both because Beau did not provide any consideration and also because such an offer is only good for a period of ten days.
E) ABC Carpet was bound by the offer and Beau had the right to sue for the refusal to honor the agreement.

Question 70

What does the term "FOB" when used as a shipping term represent?

A) Fee on board
B) Fee on basis
C) Freedom of board
D) Free on board
E) Free of basis

Question 71

What do the words "deliver to the order of seller" indicate in a goods-in-bailment contract?

A) A negotiable document
B) A nonnegotiable document
C) A shipment contract
D) An origin contract
E) An execution contract

Question 72

Which of the following references goods that are in some kind of storage so the seller cannot transfer physical possession of them?

A) Goods-in-transit
B) Goods-in-bailment
C) General to contract
D) Stored pending payment
E) Stored-in-transit

Question 73

Which of the following are types of conditional contracts?

A) Sale-on-approval contracts
B) Sale-or-return contracts
C) Condition-on-sale contracts
D) Sale-on-approval contracts, sale-or-return contracts, and condition-on-sale contracts
E) Sale-on-approval contracts and sale-or-return contracts, but not condition-on-sale contracts

Question 74

Which of the following is true when the designation FAS is used?

A) The buyer, at the buyer's expense, delivers the goods alongside the ship before the risk passes to the buyer.
B) The buyer, at the seller's expense, delivers the goods alongside the ship before the risk passes to the buyer.
C) The seller, at the seller's expense, delivers the goods alongside the ship before the risk passes to the buyer.
D) The seller, at the buyer's expense, delivers the goods alongside the ship before the risk passes to the buyer.
E) The common carrier, at the carrier's expense, delivers the goods alongside the ship before the risk passes to the buyer.

Question 75

What does the term "FAS" when used as a shipping term represent?

A) Fee at ship
B) Fee along shore
C) Freedom alongside
D) Free alongside
E) Free of basis

Question 76

In a goods-in-bailment contract, when is an insurable interest created?

A) When either party has title to the goods
B) When either party has title or a risk of loss
C) When either party has title, risk of loss, or other economic interest attached to the goods
D) Two days after either party has title to the goods
E) Never, there is no such thing as a goods-in-bailment contract

Question 77

Reference - Carpet Woes. Beau went shopping at ABC Carpet. He saw some carpet he liked but could not make up his mind. The manager at ABC Carpet wrote down the proposed purchase price for him along with a statement that the price would be good for three months. Two months later Beau went back to ABC Carpet to purchase the carpet. Unfortunately, the price had gone up. Beau showed the manager his writing and guaranteed price, but the manager said that the offer was no longer good. Although he had to pay more than the ABC manager had initially promised, Beau proceeded to purchase his carpet from ABC Carpet, and he also contracted with ABC to do the installation. Unfortunately, Beau almost immediately started to have problems with the carpet. Beau told the sales manager of ABC Carpet that he was planning on bringing suit for breach of warranty. The sales manager, however, told him that the breach of warranty provisions only applied to sales of goods and that the carpet purchase was for installation, a service. What kind of offer did the manager at ABC Carpet make to Beau?

A) An unenforceable offer
B) A firm offer
C) A consideration offer
D) An illusory offer
E) A mirror offer

Question 78

In a conditional sales contract, a _______________ occurs when the seller and buyer agree that the buyer may return the goods at a later time.

A) Sale-on-approval contract
B) Sale-or-return contract
C) Condition-or-sale contract
D) Return-or-purchase
E) Return-or-sale

Question 79

In a destination contract who bears the risk of loss while the goods are in transit?

A) The seller
B) The buyer
C) Both the buyer and seller with the loss being proportioned 50% to the buyer and 50% to the seller
D) Both the buyer and seller with the loss being proportioned 75% to the buyer and 25% to the seller
E) Both the buyer and seller with the loss being proportioned 25% to the buyer and 75% to the seller

Question 80

In a conditional sales contract, a contract is a _______________ if the seller allows the buyer to take possession of the goods before deciding whether to complete the contract by making the purchase.

A) Sale-on-approval contract
B) Sale-or-return contract
C) Condition-or-sale contract
D) Return-or-purchase
E) Return-or-sale