Deck 8: Sales Licensing and-E Commerce

Question 1

The UCC specifically defines an acceptance as "a written confirmation assenting to offered or agreed upon terms."

Answer 1

False

Question 2

The implied warranty of fitness for a particular purpose may apply to merchants and nonmerchants alike.

Answer 2

True

Question 3

The main issue in CASE 8.1,Option Wireless,Ltd.v.OpenPeak,Inc.(2012),involved the so-called "knockout rule."

Answer 3

True

Question 4

The UCC permits a contract to be enforced if the parties intended a binding contract,even though important terms may have been left open for later agreement.

Question 5

Under the UCC doctrine of commercial impracticability as applied by the UCC,a failure to perform is a breach except when performance is made impractical by an event unforeseen by the contract.

Question 6

The UCC regulates sales of goods by merchants but not by nonmerchants.

Question 7

Efforts to create a comprehensive uniform state law for software licensing have been largely unsuccessful.

Question 8

"Good faith" is defined in section 1-201(b)(20)as "a definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time [and] operates as an acceptance even though it states terms additional to or different from those offered or agreed upon."

Question 9

Procedural unconscionability is easier to prove in a commercial setting than when an individual consumer is involved.

Question 10

The UCC has adopted the "mirror image" rule.

Question 11

Most courts require that a plaintiff prove reliance on an express warranty in order to recover damages.

Question 12

The UCC treats fixtures as goods.

Question 13

As defined by the UCC,"good faith" involves the observance of objective reasonable commercial standards of fair dealing but there is no requirement as to honesty in fact.

Question 14

A proposal by a sales representative that is subject to approval by the home office is not an offer.

Question 15

The Uniform Computer Information Transactions Act is a federal law.

Question 16

A contract for the sale of land is governed by Article 2 of the UCC.

Question 17

Under the UCC,the buyer may reject any or all of the goods if the goods fail to conform to the contract.

Question 18

The Uniform Electronic Transactions Act,where enacted,applies to intrastate transactions,whereas the E-Sign Act governs only transactions in interstate and foreign commerce.

Question 19

Many states have applied Article 2 of the UCC to software licenses either directly or by analogy.

Question 20

Under the UCC,goods that are reasonably fit for the general purposes for which they are sold and that are properly packaged and labeled are considered to meet the implied warranty of merchantability.

Question 21

Under the UCC,a firm offer only applies to

A) merchants.
B) merchants and nonmerchants.
C) nonmerchants.
D) option contracts.

Question 22

Which of the following is an example of a statement made by a salesperson that would be considered "puffing"?

A) This car will get 35 miles per gallon.
B) This is a genuine diamond ring.
C) This is an original work of art.
D) This copier is the best in the business.

Question 23

A product liability action brought in tort generally permits recovery of economic damages suffered by a purchaser of an inferior or defective product,whereas a breach of warranty action would not allow such a claim.

Question 24

To which of the following does the term "battle of the forms" refer?

A) The situation in which one of the parties wishes to use a preprinted form,but the other party wishes to engage in direct negotiation
B) The situation in which the parties entered into a formal contract,but the contract has been misplaced by both parties,resulting in uncertainty regarding the exact terms of the original contract
C) The situation in which parties have neglected to bargain over items and then exchange standard printed forms,resulting in confusion regarding the terms of the contract
D) The situation in which a party wishes to claim unconscionability based upon another party's use of a preprinted form

Question 25

Unless the parties opt out of its provision,the _____ will apply to most international sales of goods.

A) UCITA
B) UCC,Article 2
C) CISG
D) TRUSTe

Question 26

Under Section 2-207(2),if only one party is a merchant,an acceptance containing additional terms

A) automatically becomes part of the contract unless the offeror objects within ten days.
B) is considered a proposal for additions to the contract.
C) is a counteroffer.
D) has no effect and the contract is accepted without the new terms.

Question 27

Under the Convention on Contracts for the International Sale of Goods (CISG),an offer becomes effective when

A) the offeror sends it.
B) it reaches the offeree.
C) the offeree reads it.
D) the offeree replies.

Question 28

Unless specified otherwise,UCC section 2-509 places the risk of loss on the party controlling the goods at the time loss occurs,because that party is better able to take precautions to protect the goods and to insure against loss.As a result,a party:

A) may bear the risk of loss even if it does not hold title to the goods at the time of loss.
B) is protected from risk of loss if it does not hold title to the goods.
C) may not be at risk of loss until in physical possession of the goods.
D) cannot avoid risk of loss from the moment an offer is made.

Question 29

Under the UCC,the _____ term(s)must be in a writing order to satisfy the statute of frauds.

A) price
B) quantity
C) identity of the parties
D) time and place for delivery

Question 30

According to the UCC,if no amount of time is specifically stated,a firm offer provided by a merchant must be kept open for a reasonable period of time,up to

A) one year.
B) six months.
C) three months.
D) sixty days.

Question 31

To which of the following does Article 2 of the UCC apply?

A) The sale of goods
B) The rendering of services
C) The sale of land
D) Both the sale of goods and the rendering of services

Question 32

A contract is __________ if its terms are unduly harsh or oppressive or unreasonably favorable to one side.

A) substantively unconscionable
B) procedurally unconscionable
C) procedurally impracticable
D) substantively impracticable

Question 33

A contract is __________ when one party is induced to enter a contract without having any meaningful choice.

A) substantively unconscionable
B) procedurally unconscionable
C) procedurally impracticable
D) substantively impracticable

Question 34

If a sales contract requires the seller to ship the goods by carrier and specifies the destination,the risk of loss passes to the buyer when the

A) goods are properly delivered to the carrier.
B) carrier tenders the goods to the buyer at the specified destination.
C) contract is finalized.
D) seller pays for the goods.

Question 35

Which of the following is true regarding the UCC's Statute of Frauds?

A) The writing involved must be typed,not handwritten.
B) The writing must be signed by the party to be charged,not necessarily by all parties.
C) Any warranties must be included in the writing in order to be enforceable.
D) The UCC's requirements regarding a writing are strict and place significant burdens on the parties in regard to adequately including all terms of the agreement in the writing.

Question 36

If parties to a contract dispute a missing term,the court could simply fill in the missing term using the _____ provisions of the UCC.

A) Gap-Filler
B) Conditional Acceptance
C) Battle of the Forms
D) Knockout Rule

Question 37

_____ are items of personal property attached to real property that cannot be removed without substantial damage.

A) Connectors
B) Relaters
C) Entanglements
D) Fixtures

Question 38

UCC Section 2-319 expressly authorizes the buyer and seller to allocate the __________ between them as they see fit.

A) damages
B) specific performance
C) modification
D) risk of loss

Question 39

When the seller provides the buyer with a document enabling the pickup of goods held at an independent warehouse,the risk of loss passes to the buyer when the:

A) goods are picked up by the buyer.
B) contract of sale is signed.
C) buyer receives the document entitling it to pick up the goods.
D) buyer pays for the goods.

Question 40

Which of the following is governed by Article 2 of the UCC?

A) A contract for sale of a commercial building
B) A contract for sale of office supplies
C) An employment contract
D) A life insurance contract

Question 41

In CASE 8.2,MacNeil Automotive Products,Ltd.v.Cannon Automotive,Ltd.(2010),MacNeil subcontracted with Canon Automotive to provide floor mats on automobiles.MacNeil claimed the mats were defective and breached the express warranty.What was the main question before the court?

A) Did the sales talk constitute an implied warranty for fitness of purpose?
B) Did the sales talk constitute an implied warranty of merchantability?
C) Was the sales talk puffery or an express warranty?
D) Did the sales talk properly disclaim all express warranties?

Question 42

For which of the following would an electronic signature be invalid under both UETA and E-Sign?

A) Contracts relating to matters of family law
B) Notices of recall
C) Contracts for foreign commerce
D) Documents accompanying the transport of hazardous materials

Question 43

Chris sold Whitney a home containing a wood stove which could not be removed from the home without causing substantial damage.Shortly after the sale,Whitney sustained significant smoke damage due to a malfunction of the stove.Whitney told Chris of the intention to sue under the UCC.Chris told Whitney that was not possible.Which of the following is true?

A) Chris is correct because the stove would likely be a fixture not covered by the UCC.
B) Whitney is correct because the stove would likely be a fixture covered by the UCC.
C) Whitney is correct because the stove would not be considered a fixture and would,therefore,be covered by the UCC.
D) Whitney is correct because the sale of the home would be covered under the UCC along with anything else sold with the home.

Question 44

Rylen develops a new type of software and asks you how to go about making money through distribution of it.Rylen has been told to sell the software as opposed to issuing licenses for its use.What should you tell Rylen?

A) By selling,rather than by licensing,a software vendor can avoid the doctrine of first sale,which allows a lawful owner to sell or otherwise dispose of the copy.
B) By licensing,rather than by selling,a software vendor can avoid the doctrine of first sale,which allows a lawful owner to sell or otherwise dispose of the copy.
C) Selling is the only reasonable alternative because computer programs are not copyrightable.
D) Licensing is the only reasonable alternative because computer programs are not copyrightable.

Question 45

Which of the following is NOT a type of warranty under the UCC?

A) Express
B) Fitness for a particular purpose
C) Merchantability
D) Specific performance

Question 46

Rene owns a small restaurant that sells hamburgers as one of its main attractions and puts up a sign that says "Best Burgers in the County." Marion does an exhaustive investigation of all restaurants in the county and asks friends to do the same.They all determine that actually a restaurant run by their friend Sam has the best burgers in the county.Marion tells Rene that unless the sign is removed,Rene could be sued for breach of warranty and false advertising.Rene tells Marion no one has cause of action.Who is correct?

A) Marion is correct as long as jurors in a lawsuit can be convinced that Sam has the best burgers.
B) Marion is correct only by establishing that Rene was aware that Sam's burgers actually taste better before the sign was put up.
C) Marion is incorrect because Rene was engaged in "spoofing."
D) Marion is incorrect because Rene was engaged in "puffing."

Question 47

In highly concentrated industries with few competitors,all the sellers may offer the same unfair contracts on a "take-it-or-leave-it" basis,known as an adhesion contract and an example of:

A) procedural unconscionability.
B) substantive unconscionability.
C) failure of underlying conditions.
D) express warranty.

Question 48

Which of the following will NOT create an express warranty under the UCC?

A) Making a statement or promise relating to the goods.
B) Expressing an opinion about the quality of the goods.
C) Providing a description of the goods.
D) Stating any fact regarding the quality of the goods.

Question 49

Panya sold Jody a used car for $1,000.Their contract provided that the engine in the car was in good shape,a true statement as far as Panya knew.Unfortunately,the day after Jody purchased the car,it broke down and was discovered to have significant engine problems.Jody wanted a refund.Panya said Jody was not entitled to a refund because Panya did not lie and had not known anything was wrong with the car.Which of the following is true?

A) Jody is entitled to a refund because of a breach of an express warranty.
B) Jody is entitled to a refund because of a breach of the implied warranty of fitness for a particular purpose.
C) Jody is entitled to a refund only by obtaining evidence that Panya lied.
D) Jody is not entitled to a refund under any circumstances because the vehicle was used.

Question 50

__________ do not relieve a contracting party from their responsibilities under the UCC doctrine of commercial impracticability.

A) Wars
B) Market fluctuations
C) Embargoes
D) Market fluctuations and embargoes

Question 51

In a state that had adopted the Uniform Electronic Transactions Act,Kiera and Ben entered into a contract whereby Ben would clean Kiera's house once a week for eighteen months for $75 per week.The transaction was done electronically,and both Kiera and Ben signed through the use of an electronic signature.Unfortunately,problems resulted when Ben failed to show up as scheduled.Ben told Kiera that the contract was not good because his signature was made electronically.Kiera told him that he was wrong and that he needs to get up to date with the modern age.Which of the following is correct regarding the dispute?

A) Ben is correct because electronic signatures are not recognized as valid under any circumstances.
B) Ben is correct only if Kiera's name was typed as opposed to being shown in handwriting-style (cursive)form.
C) Kiera is correct that the signature is sufficient only if she can show that she and Ben had previously engaged in electronic transactions.
D) Kiera is correct that her electronic signature is sufficient.

Question 52

Explain the different types of warranties that exist under the UCC.

Question 53

Indicate how a seller may disclaim warranties under the UCC.

Question 54

Browse-wrap agreement appears on a website and:

A) does not need to be conspicuous to be enforceable.
B) does not require the user to take any action to express consent to the agreement.
C) prevents use of any software until the license agreement is clicked.
D) acts as an application for licensed use of the software.

Question 55

The courts that have considered click-wrap licenses have generally found that the licenses are

A) enforceable.
B) enforceable only for software costing $100 or less.
C) enforceable only for software costing $100 or less and that is designed for business,not consumer use.
D) unenforceable.

Question 56

If the contracted goods are unique and fail to be delivered,the buyer can ask a court under 2-716 of the UCC to order:

A) allocation of risk of loss.
B) consequential damages.
C) cover.
D) specific performance.

Question 57

With a shrink-wrap license,the user will:

A) not find the licensing terms in a conspicuous place.
B) agree to the terms of the license by clicking on an icon.
C) find the license terms on the outside of a box containing software.
D) not need to take any action to express consent to the agreement.

Question 58

Under 2-711 of the UCC,a buyer has a remedy called "cover." What is cover and when can it be used?

A) Cover applies when conforming goods are rejected by the buyer,giving the buyer the right to cancel the contract and buy better goods elsewhere with reimbursement for any extra costs.
B) Cover applies when nonconforming goods are delivered to the buyer,giving the buyer the right to cancel the contract and buy the goods elsewhere with reimbursement for any extra costs.
C) Cover is a seller's right and does not apply to the buyer.
D) Cover allows a buyer to cancel the contract for shipments delayed more than 30 days and recover direct damages from the seller.

Question 59

Between merchants,what is the effect of an acceptance that includes additional terms without expressly making the contract subject to the offeror's agreeing to those terms?

Question 60

Which of the following is true regarding the UETA in relation to the E-Sign Act?

A) Because the UETA is a federal law,whereas the E-Sign Act is a creature of state law,the UETA preempts the E-Sign Act in many ways.
B) The UETA and also the E-Sign Act exclude wills from their coverage.
C) Both the UETA and the E-Sign Act include within their broad scope provisions that divorces may be entered into and recorded electronically.
D) The UETA allows electronic signatures whereas the E-Sign Act disallows such signatures.

Question 61

What must be established in order for goods to be considered merchantable under the UCC?

Question 62

What does Section 201 of the UCC provide regarding a Statute of Frauds?

Question 63

When is a failure to perform allowed under the UCC's doctrine of commercial impracticability?

Question 64

Why do vendors today typically prefer to license software rather than sell it outright?