Deck 21: Introduction to Sales and Lease Contracts

Question 1

Land and service contracts are governed by common law, not the UCC.

Answer 1

True

Question 2

The UCC is divided into sections known as rules of law.

Answer 2

False

Question 3

Each state passes its own laws to outline rules and laws pertaining to sales and lease contracts.

Answer 3

True

Question 4

A contract that combines a good with a service is known as a mixed motive contract.

Question 5

Which of the following does not follow the English common law?

A) Louisiana only
B) Louisiana and Texas
C) Alaska and Hawaii
D) New York and California
E) California only

Question 6

A finance lease is equivalent to a consumer lease.

Question 7

The parol evidence rule aims to protect sales or lease contracts that the parties intend to be the final expression of their agreement.

Question 8

The UCC was designed to include items such as software and information.

Question 9

The UCC has different rules for transactions involving merchants and transactions involving nonmerchants.

Question 10

The Uniform Internet Act was adopted by the National Conference of Commissioners on Uniform State Laws in order to answer questions involving Internet sales issues.

Question 11

The UCC requires that consideration be provided for the modification of sales and lease contracts.

Question 12

Which statement is false regarding the United Nations Convention on Contracts for the International Sale of Goods ("CISG")?

A) Israel is a signatory of the CISG.
B) The United States applies the UCC but not the CISG.
C) The United Kingdom is not a signatory of the CISG and instead applies English common law.
D) The CISG is a treaty.
E) Mexico has signed the CISG.

Question 13

What did the court in Reilly Foam Corp. v. Rubbermaid Corp. rule in regard to whether a quote is considered an offer under the UCC?

A) That it is well recognized under the UCC that quotes are considered offers.
B) That it is well recognized under the UCC that quotes are not considered offers.
C) That the UCC does not apply at all to disputes involving quotes because quotes are not goods.
D) That generally quotes are not offers but that some price quotes are sufficiently detailed to be deemed offers.
E) That generally quotes are offers but that some price quotes are sufficiently vague to be deemed mere invitations to enter into negotiations or to submit offers.

Question 14

The UCC recognizes something called the battle of the forms.

Question 15

Unconscionability is a concept recognized by the UCC.

Question 16

The most important focus of the UCC in determining contract formation is the intent of the parties to be bound by the contract.

Question 17

The UCC has not adopted the mirror image rule.

Question 18

Under the UCC, almost any kind of documentation is usually sufficient to satisfy the writing requirement of the statute of frauds.

Question 19

The UCC distinguishes merchants from ________.

A) employers
B) government run businesses
C) regular buyers and sellers
D) state contractors
E) merchant agents

Question 20

Which of the following is true when Article 2 is silent on issues of sales contract formation or interpretation?

A) Federal law applies.
B) Federal law or state law applies depending on the good.
C) The common law applies unless a state has passed a statutory law regarding contracts.
D) Courts will look to a different article within the UCC for guidance.
E) The CISG will be used.

Question 21

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 22

Which of the following is true regarding Chinese law?

A) China currently has legislation that covers the sale of goods, the provision of services, and leases.
B) China currently has legislation that covers the sale of goods and the provision of services, but no legislation that covers leases.
C) China currently has legislation that covers the sale of goods, but not the provision of services or leases.
D) China currently has legislation that covers leases, but not the provision of services or the sale of goods.
E) China has legislation that covers leases and the sale of goods, but not the provision of services.

Question 23

The UCC was created in 1952 and has been adopted by all 50 states and ________.

A) Puerto Rico
B) Great Britain
C) the District of Columbia and the Virgin Islands
D) Guam
E) Canada and Mexico

Question 24

Most states employ some variation of the ________ in order to resolve contract issues in cases in which a tangible good is mixed with something intangible

A) Mixed-purpose test
B) Use of purpose test
C) Goods-services test
D) Predominant-purpose test
E) Ability to use test

Question 25

Which article of the UCC governs sales contracts?

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

Question 26

Under Article 2(A) of the UCC, a(n) ________ is defined as a transfer of the right to possession and use of goods for a term in return for consideration.

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

Question 27

Under the UCC, items are tangible if they ________.

A) are on paper
B) are stock options
C) are able to be ascertained in a writing
D) exist physically
E) are saleable

Question 28

Which statement is true regarding materials that are considered goods under the UCC?

A) Minerals taken from real estate and sold by the owner, soil taken from real estate and sold by the owner, and the right to remove soil from real estate are all considered goods under the UCC.
B) Soil taken from real estate and sold by the owner is considered a good under the UCC, but neither minerals taken from real estate and sold by the owner nor the right to remove soil from real estate are considered goods under the UCC.
C) The right to remove soil from real estate is considered a good under the UCC, but neither minerals taken from real estate and sold by the owner nor soil taken from real estate and sold by the owner are considered goods under the UCC.
D) Minerals taken from real estate and sold by the owner and soil taken from real estate and sold by the owner are considered goods under the UCC, but the right to remove soil from real estate is not considered a good under the UCC.
E) Minerals taken from real estate and sold by the owner and the right to remove soil from real estate are considered goods under the UCC, but soil taken from real estate and sold by the owner is not considered a good under the UCC.

Question 29

Which of the following is true regarding what meets the UCC definition of a good?

A) Real estate, corporate stocks, copyrights, and trade fixtures all meet the definition of a good under the UCC.
B) Corporate stocks, real estate, and copyrights meet the definition of a good under the UCC, but trade fixtures do not.
C) Trade fixtures meet the definition of a good under the UCC, but real estate, corporate stocks, and copyrights do not.
D) Copyrights meet the definition of a good under the UCC, but real estate, corporate stocks, and trade fixtures do not.
E) Real estate, trade fixtures, and corporate stocks meet the definition of a good under the UCC, but copyrights do not.

Question 30

The UCC is divided into sections known as ________.

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

Question 31

Under Article 2(A) of the UCC, what is the correct term for 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 32

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

A) lessor
B) lessee
C) assignor
D) agent
E) actuary

Question 33

________ are contracts that combine a good with a service.

A) Combined sales
B) Mixed sales
C) Sales agreements
D) Goods contracts
E) Total contracts

Question 34

Article 2 of the UCC defines ________ as tangible things which are movable at the time of identification to the contract for sale.

A) Merchandise
B) Attachments
C) Goods
D) Personable Property
E) Sales Items

Question 35

Henry and Alva are merchants under the UCC entering into a contract. Under the UCC, how may an acceptance be made by Henry and Alva?

A) Only by a writing.
B) Orally as long as it is followed up by a writing.
C) Only by electronic communications.
D) By fax or mail only, not electronic communications.
E) By any reasonable means of communication.

Question 36

A lease that (1) has a value of $25,000 or less and (2) exists between a lessor regularly engaged in the business of leasing or selling and a lessee who leases the goods primarily for a personal, family, or household purpose, is called a ________ lease.

A) Finance
B) Consumer
C) Regulated
D) Commercial
E) Retail

Question 37

Under the UCC, which of the following are two special kinds of leases?

A) Consumer and finance
B) Finance and terminal
C) Consumer and terminal
D) Real estate and procedural
E) Procedural and terminal

Question 38

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, which law applies?

A) The common law rules
B) The civil law rules
C) Federal common law
D) Federal statutory law
E) The Uniform Sales Act

Question 39

Which of the following is true regarding the holding of the court in The Travelers Property Casualty Company of America and Hellmuth Obata & Kassabaum, Inc. v. Saint-Gobain Technical Fabrics Canada Limited, the case in the text involving whether the statute of frauds barred enforcement of a contract and also whether the United Nations Convention on Contracts for the International Sale of Goods (CISG) applied to a contract in view of the fact that a particular state's law was referenced in the contract?

A) That the CISG did not apply because the contract referred to provisions of the UCC and that the statute of frauds contained within the UCC barred enforcement of the contract.
B) That the CISG did not apply because the construction of an arena, which would result in a type of realty, was concerned and that the statute of frauds contained within the UCC barred enforcement of the contract.
C) That the CISG did not apply because significant provisions in the contract were left unwritten but that the statute of frauds was inapplicable.
D) That the CISG applied and that oral discussions could have formed a contract.
E) That the CISG applied and that no contract could have resulted because of the lack of a writing.

Question 40

Which article of the UCC governs lease contracts?

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

Question 41

[Customer Uncertainty] Luke wanted baseball caps with the name of the firm of which he was president, ABC Corporation, emblazoned on the front. Emilia, a merchant in specialized goods, orally agreed with Luke that she would sell him 200 baseball caps at $5 each. No writing was ever made, although there were a number of witnesses to the conversation. After the caps were finished, but before they were shipped, Luke called to cancel the order because his firm had just announced a merger and would no longer be known as ABC Corporation. Emilia told him she would not cancel the contract because she had just finished the caps. Luke told Emilia that she should have been smarter and had him sign something because without a writing, she would not have a chance in court. Emilia is also having problems with other customers. A father who voluntarily coached a youth softball league in his community called and orally ordered 150 baseball caps at a cost of $4 to give out at a league banquet. He wanted a variety of caps with no name on them because players from different teams would be at the banquet. Emilia sent a confirmation letter to the coach and had the caps packed up and ready to go. Just before she shipped them, the coach called and told her that there was a big feud, the banquet was canceled, and that he was canceling the order. She believes that the coach should pay damages, especially because a big order was involved. Finally, Emilia has a merchant customer who orally ordered 500 plain T-shirts at a cost of $5 each, but has not picked them up and has refused to do so after several demands. Emilia wants to take the merchant customer to small claims court.
Which of the following is true regarding Emilia's assertion that she should be allowed to recover from the baseball coach?

A) Based upon the facts given, Emilia cannot recover because the coach was not a merchant in regards to the transaction and had not signed anything showing that he was to be charged for the caps.
B) Emilia can recover because she sent the coach a confirmation letter, and he did not object within 10 days of receipt.
C) Emilia can recover because she sent the coach a confirmation letter, and he did not object within 20 days of receipt.
D) Emilia can recover because the transaction was not covered by the UCC.
E) Emilia can recover only if she can prove by testimony of a witness that the coach received the confirmation letter and read it.

Question 42

[Carpet Woes] Joaquin 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, Joaquin went back to ABC Carpet to purchase the carpet. Unfortunately, the price had gone up. Joaquin showed the manager his writing and guaranteed price, but the manager said that the offer was no longer good. Frustrated with ABC Carpet, Joaquin decided to purchase his carpet from XYZ Carpet, and he also contracted with XYZ to do the installation. Unfortunately, Joaquin almost immediately started to have problems with the carpet. Joaquin told the sales manager for XYZ Carpet that he was planning on bringing a suit for breach of warranty. The sales manager, however, told him that 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 Joaquin 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 bound by the offer, but only if Joaquin can establish reliance.
E) ABC Carpet was bound by the offer.

Question 43

When does the UCC assume a three-month irrevocability period?

A) Always.
B) Never.
C) If a firm offer is silent as to time.
D) Only if one of the parties is a nonmerchant.
E) Only if one of the parties lives in Louisiana who does not follow the common law.

Question 44

In a finance lease, the lessor does not select, manufacture, or supply the goods. Rather, the lessor ________.

A) receives the rights to the goods but does not receive title
B) can acquire title to goods but not their possession
C) acquires title to the goods or the right to their possession and use in connection with the terms of the lease
D) must agree to take all the goods in any shape or form they are presented
E) may refuse goods but must do so within 24 hours

Question 45

Which of the following is true regarding payment and the place for delivery if those terms are left open under the UCC?

A) There is no contract if these terms are omitted.
B) If payment terms are omitted, payment is due at the time and place at which the buyer is to receive the goods, and the place for delivery is the seller's place of business.
C) If payment terms are omitted, payment is due at the time and place at which the buyer is to receive the goods, and the place for delivery is the buyer's place of business.
D) If payment terms are omitted, payment is due at least 10 days prior to the date set for delivery, and the place for delivery is the seller's place of business.
E) If payment terms are omitted, payment is due at least 10 days prior to the date set for delivery, and the place for delivery is the buyer's place of business.

Question 46

[Dress Shop Problems] Lara, who has a ladies' dress shop, reached an oral agreement with Kim, a wholesaler, to purchase 100 dresses for $80 each, with the dresses to be delivered within 30 days. Kim later orally agreed to a modification whereby she would add ten belts to go along with certain dresses at no extra charge. Kim did so because she wanted to maintain Lara's good will. Lara sent Kim a memo confirming their oral agreement, including the modification, but heard nothing. When the dresses did not arrive within 30 days, Lara checked with Kim. Kim told her that their agreement was no good because Kim never signed anything and that the UCC does not apply in the retail arena.
Which of the following is true regarding the modification to the agreement involving the belts added to the order at no extra charge?

A) The modification is not enforceable because the initial contract involving the sale of the dresses is not enforceable.
B) The modification is not enforceable because no additional consideration was given.
C) The modification is not enforceable unless it can be shown that the dresses were designed to have a belt.
D) The modification is enforceable because although the UCC requires consideration for modifications, the desire to maintain good will satisfies the requirement of consideration.
E) The modification is enforceable because the UCC requires only that modifications be made in good faith.

Question 47

Under the UCC, since both Leyland and Melanie are merchants, when Leyland sends his acceptance to Melanie's contract terms, when would his acceptance be effective?

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

Question 48

[Carpet Woes] Joaquin 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, Joaquin went back to ABC Carpet to purchase the carpet. Unfortunately, the price had gone up. Joaquin showed the manager his writing and guaranteed price, but the manager said that the offer was no longer good. Frustrated with ABC Carpet, Joaquin decided to purchase his carpet from XYZ Carpet, and he also contracted with XYZ to do the installation. Unfortunately, Joaquin almost immediately started to have problems with the carpet. Joaquin told the sales manager for XYZ Carpet that he was planning on bringing a suit for breach of warranty. The sales manager, however, told him that 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 in most states regarding whether the UCC applies to the contract Joaquin had with XYZ 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 apply the predominant-purpose test to 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 49

Which of the following was offered as a treaty that countries could sign in order to indicate 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 50

Under the UCC, a contract for the sale of goods valued at $500 or more ________.

A) must be in writing in order to be enforceable
B) must be on a special form
C) is considered a mixed sale
D) must be purchased by credit
E) is an irrevocable sale

Question 51

[Dress Shop Problems] Lara, who has a ladies' dress shop, reached an oral agreement with Kim, a wholesaler, to purchase 100 dresses for $80 each, with the dresses to be delivered within 30 days. Kim later orally agreed to a modification whereby she would add ten belts to go along with certain dresses at no extra charge. Kim did so because she wanted to maintain Lara's good will. Lara sent Kim a memo confirming their oral agreement, including the modification, but heard nothing. When the dresses did not arrive within 30 days, Lara checked with Kim. Kim told her that their agreement was no good because Kim never signed anything and that the UCC does not apply in the retail arena.
Which of the following is true regarding whether the agreement between Lara and Kim for the sale of dresses satisfied the writing requirement of the UCC?

A) The agreement is likely binding because under the UCC, if two merchants have an oral agreement, a written memo from either party to the other is deemed to satisfy the statute of frauds, even if it is not acknowledged by the receiving party. If it is not objected to within 10 days of receipt, the oral agreement, memorialized by the memo, is binding.
B) The agreement is likely binding because under the UCC, if two merchants have an oral agreement, there is no requirement of a writing so long as another witness is willing to confirm that within 10 days of the agreement, one of the parties memorialized the agreement by a memorandum to the file, even if it was not sent to the other party.
C) The agreement is binding because the UCC has no requirement of a writing under any circumstances.
D) The agreement is not binding because Kim never signed anything by which she agreed to the terms of the oral agreement.
E) The agreement is not binding because Lara did not send Kim a registered letter memorializing the oral conversation as is required by the UCC.

Question 52

Under the UCC, if a court discovers that a contract or lease provision or the contract or lease as a whole is unconscionable, the court can ________.

A) void the contract completely
B) refuse to enforce the contract or lease in total
C) only refuse to enforce the parts of the contract or lease that are unfair
D) either refuse to enforce the contract or lease or can enforce the parts of the contract or lease that are deemed to be fair
E) award the innocent party punitive damages due to the court's lack of ability to enforce an unconscionable contract

Question 53

A contract or contract provision is said to be unconscionable if ________.

A) it is not written out
B) a party is trying to enforce an oral agreement
C) it is so unfair that a court would be unreasonable if it enforced the contract
D) it is less than $25,000 and is not in writing
E) there are more than two parties associated with the contract

Question 54

Veronica and Paul are arguing about whether or not states have any rights under the UCC. If you were explaining state's rights under the UCC, which of the following is true regarding state rights in relationship to the UCC?

A) Since the UCC is a federal law, states have no right to change it.
B) Each state is allowed to rewrite parts of the UCC to reflect the wishes of its state legislature and they become part of that state's commercial code.
C) States must adopt the UCC in full or not at all.
D) State legislatures may make changes to Article 2 of the UCC but not to any other articles.
E) State legislatures may make changes to Article 2 and Article 2(A) of the UCC but not to any other articles.

Question 55

[Carpet Woes] Joaquin 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, Joaquin went back to ABC Carpet to purchase the carpet. Unfortunately, the price had gone up. Joaquin showed the manager his writing and guaranteed price, but the manager said that the offer was no longer good. Frustrated with ABC Carpet, Joaquin decided to purchase his carpet from XYZ Carpet, and he also contracted with XYZ to do the installation. Unfortunately, Joaquin almost immediately started to have problems with the carpet. Joaquin told the sales manager for XYZ Carpet that he was planning on bringing a suit for breach of warranty. The sales manager, however, told him that 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 Joaquin?

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

Question 56

[Customer Uncertainty] Luke wanted baseball caps with the name of the firm of which he was president, ABC Corporation, emblazoned on the front. Emilia, a merchant in specialized goods, orally agreed with Luke that she would sell him 200 baseball caps at $5 each. No writing was ever made, although there were a number of witnesses to the conversation. After the caps were finished, but before they were shipped, Luke called to cancel the order because his firm had just announced a merger and would no longer be known as ABC Corporation. Emilia told him she would not cancel the contract because she had just finished the caps. Luke told Emilia that she should have been smarter and had him sign something because without a writing, she would not have a chance in court. Emilia is also having problems with other customers. A father who voluntarily coached a youth softball league in his community called and orally ordered 150 baseball caps at a cost of $4 to give out at a league banquet. He wanted a variety of caps with no name on them because players from different teams would be at the banquet. Emilia sent a confirmation letter to the coach and had the caps packed up and ready to go. Just before she shipped them, the coach called and told her that there was a big feud, the banquet was canceled, and that he was canceling the order. She believes that the coach should pay damages, especially because a big order was involved. Finally, Emilia has a merchant customer who orally ordered 500 plain T-shirts at a cost of $5 each, but has not picked them up and has refused to do so after several demands. Emilia wants to take the merchant customer to small claims court.
Which of the following is correct regarding Luke's assertion that Emilia cannot recover the cost of the caps?

A) Luke is correct. Emilia cannot recover because she has nothing in writing.
B) Luke is incorrect because the cost of the caps is insufficient to come within the requirement of a writing under the UCC.
C) Luke is incorrect because Emilia has witnesses.
D) Luke is incorrect because Emilia had already made the caps and she cannot sell them to another buyer.
E) Luke is incorrect both because Emilia had already made the caps and also because she had witnesses.

Question 57

When courts interpret sales and lease contracts, how do they prioritize the combination of the following four factors?

A) (1) Express terms, (2) Course of performance, (3) Course of dealing, and (4) Usage of trade
B) (1) Usage of trade, (2) Course of performance, (3) Course of dealing, and (4) Express terms
C) (1) Express terms, (2) Course of dealing, (3) Course of performance, and (4) Usage of trade
D) (1) Course of performance, (2) Course of dealing, (3) Express terms, and (4) Usage of trade
E) (1) Express terms, (2) Usage of trade, (3) Course of dealing, and (4) Course of performance

Question 58

The ________ is aimed at protecting sales or lease contracts that the parties involved intend to be the final expression of their agreement.

A) statute of frauds
B) final evidence regulation
C) parol evidence rule
D) end evidence rule
E) blindspot rule

Question 59

[Dress Shop Problems] Lara, who has a ladies' dress shop, reached an oral agreement with Kim, a wholesaler, to purchase 100 dresses for $80 each, with the dresses to be delivered within 30 days. Kim later orally agreed to a modification whereby she would add ten belts to go along with certain dresses at no extra charge. Kim did so because she wanted to maintain Lara's good will. Lara sent Kim a memo confirming their oral agreement, including the modification, but heard nothing. When the dresses did not arrive within 30 days, Lara checked with Kim. Kim told her that their agreement was no good because Kim never signed anything and that the UCC does not apply in the retail arena.
Which of the following is true regarding Kim's statement that the UCC does not apply in the retail arena?

A) Kim is correct in that the UCC does not apply in the retail arena.
B) Kim is partially correct. The UCC does not apply in the retail arena if the parties have had significant past dealings under common law.
C) Kim is partially correct. The UCC does not apply in the retail arena if the parties are located in the same state.
D) Kim is partially correct. The UCC does not apply in the retail arena if the contract at issue is for an amount under $10,000.
E) Kim is incorrect.

Question 60

Which of the following is true regarding the creation of the Uniform Commercial Code?

A) The Uniform Commercial Code was created by the National Conference of Commissioners on Uniform State Laws, the American Law Institute, and the U.S. Commercial Consortium.
B) The Uniform Commercial Code was created by the U.S. Commercial Consortium and the National Conference of Commissioners on Uniform State Laws, but not the American Law Institute.
C) The Uniform Commercial Code was created by the National Conference of Commissioners on Uniform State Laws and the American Law Institute, but not the U.S. Commercial Consortium.
D) The Uniform Commercial Code was created by a federal congressional committee.
E) The Uniform Commercial Code was created by state legislative representatives from all 50 states.

Question 61

Is Aranda correct that full payment should be made at the time of delivery?

A) Yes, because the UCC requires "reasonable payment terms" to be supplied at the time of delivery.
B) Yes, since the terms of payment were left open, payment is due at the time and place at which the buyer is to receive the goods.
C) No, because all material terms must be specified.
D) No, because of the mirror image rule.
E) No, because the statute of frauds requires payment terms to be in writing.

Question 62

Aranda claims that Rita's telephone call with Aranda is an admission of the existence of the contract and an admission constitutes an exception to the statute of frauds under the UCC. Is Aranda correct?

A) Yes, an admission is an exception to the statute of frauds under the UCC and Rita admitted the existence of the contract over the telephone.
B) Yes, an admission is an exception to the statute of frauds under the UCC but only when it is expressly worded as an admission to the other party.
C) No, even though an admission is an exception to the statute of frauds under the UCC, Rita never admitted the existence of a contract.
D) No, even though an admission is an exception to the statute of frauds under the UCC, the admission was not made in pleadings, testimony, or court.
E) No, an admission is not an exception to the statute of frauds.

Question 63

[Cookware Crisis] Aranda owns Aranda's Cooking, a cooking supply company which sells high quality cookware to restaurants and specialty stores. Aranda stopped at a potential customer, Rita's Restaurant, to show Rita a new, elite line of copper cookware, bakeware, and utensils. Rita told Aranda she wanted to buy the entire cookware line for the stated price of $5,000, but needed time to think about the other items. The following day, Rita called Aranda and told her to add the line of bakeware Rita had quoted for $5,000 and the line of utensils. The next week, Aranda delivered the entire cookware line, and said she would return the next day to drop off the bakeware and utensils and pick up a check for $12,000 which included $5,000 for the bakeware and $2,000 for the utensils. Rita was outraged at the price of the utensils and told Aranda not to deliver the utensils because there was no agreement about them. Aranda tells Rita that she agreed to buy the utensils and there is a valid contract, and that she expects full payment when she returns the next day. Rita responds that the addition of the utensils was only a counteroffer, which was not accepted by Rita and there is nothing in writing, and therefore there is no contract. Aranda delivers the bakeware and utensils the following day.
Is Rita correct that there is no contract because there is nothing at all in writing?

A) Yes, although the UCC is lenient about the statute of frauds, there must at least be something in writing to evidence the existence of a contract.
B) Yes, unless the goods were specifically manufactured for Rita.
C) No, because there has been partial performance of the contract.
D) Yes, because Rita made no payment.
E) No, but only if Rita has made a payment under the contract.

Question 64

[Cookware Crisis] Aranda owns Aranda's Cooking, a cooking supply company which sells high quality cookware to restaurants and specialty stores. Aranda stopped at a potential customer, Rita's Restaurant, to show Rita a new, elite line of copper cookware, bakeware, and utensils. Rita told Aranda she wanted to buy the entire cookware line for the stated price of $5,000, but needed time to think about the other items. The following day, Rita called Aranda and told her to add the line of bakeware Rita had quoted for $5,000 and the line of utensils. The next week, Aranda delivered the entire cookware line, and said she would return the next day to drop off the bakeware and utensils and pick up a check for $12,000 which included $5,000 for the bakeware and $2,000 for the utensils. Rita was outraged at the price of the utensils and told Aranda not to deliver the utensils because there was no agreement about them. Aranda tells Rita that she agreed to buy the utensils and there is a valid contract, and that she expects full payment when she returns the next day. Rita responds that the addition of the utensils was only a counteroffer, which was not accepted by Rita and there is nothing in writing, and therefore there is no contract. Aranda delivers the bakeware and utensils the following day.
Is Rita correct that her statement to add the utensils did not constitute acceptance?

A) No, because additional terms must be in writing.
B) No, because Aranda never accepted Rita's counteroffer.
C) No, because Rita's acceptance was not the mirror image of Aranda's offer.
D) Yes, because additional terms are always permitted in sales contracts under the UCC.
E) Yes, because Rita did not expressly condition her acceptance upon Aranda's assent to the additional terms.

Question 65

According to Exhibit 21-6 of the text, which of the following statements about material terms under the UCC and the common law is true?

A) Under both UCC and common law, all material terms must be specified in the contract.
B) Under both UCC and common law, material terms may be left open for subsequent determination by the parties.
C) Under both UCC and common law, all material terms other than price must be specified in the contract.
D) Under the UCC, all material terms must be specified in the contract, but under common law, material terms may be left open.
E) Under common law, all material terms must be specified in the contract, but under the UCC, material terms may be left open.

Question 66

Under the UCC, when will additional terms negate acceptance of a sales contract?

A) When acceptance is made expressly conditional on assent to the additional terms.
B) When acceptance is made expressly conditional on assent to the mirror image rule.
C) When acceptance is made expressly conditional on assent to the parol evidence rule.
D) Additional terms never cancel the acceptance of a sales contract.
E) Adding terms to a sales contract always cancels acceptance of a contract.

Question 67

After conducting a great deal of research, Nora contacts a camping store and signs a contract to purchase forty-five new tents at a reduced rate. According to Exhibit 21-4 of the text, under what circumstances would Nora not be considered a "merchant" under UCC Article 2 with regard to the contract for the purchase of the tents?

A) If Nora purchased the tents for use at the summer camp she manages.
B) If Nora owns a camping store and held herself out as having knowledge and skill unique to camping.
C) If Nora deals in tents and if Nora employed a merchant as a broker to buy the tents.
D) If Nora owns a camping store and held herself out as having knowledge and skill unique to camping; or if Nora employed a merchant as a broker to buy the tents.
E) If Nora deals in tents; if she owns a camping store and held herself out as having knowledge and skill unique to camping; and if Nora employed a merchant as a broker to buy the tents.

Question 68

According to Exhibit 21-5 in the text, which terms can be interpreted by the UCC if left open in a contract?

A) All terms except price.
B) Payment, delivery, time, but not price or duration.
C) Price, payment, delivery, time, and duration.
D) Delivery, time, and duration, but not price or payment.
E) Time and duration, but not price, payment, or delivery.

Question 69

[Lucky Morton] Morton, who owns 500 acres of land in east Texas, has just discovered oil under his property. He calls OilEx, who wants to buy all of the oil from Morton's property. Morton is thrilled about the money he will make from selling the oil and he signs a contract allowing OilEx to set up a drilling station on his property. Thinking he can get more money off his land, Morton cuts down all of his trees with a chainsaw and then sells them to PaperCo to be made into paper. Meanwhile, Morton's neighbor offers to buy Morton's wheat crop after it is harvested in the Fall, and Morton agrees.
Is Morton's contract with OilEx likely covered by the UCC?

A) Yes, because oil is considered a good.
B) Yes, but only if it is over $500 in value and in writing.
C) No, because Morton has sold OilEx the right to come onto his property and remove the oil, which is not covered by the UCC.
D) Yes, because the oil is a fixture, which is being removed from the ground and sold.
E) No, because oil is considered part of the land and land sales are not covered by the UCC.

Question 70

What was the court's ruling in Loizeaux Builders Supply Co. v. Donald B. Ludwig Company, the case in the text about whether a supplier's telephone call in February that the low price for concrete "would be adhered to for the year" still applied after January 1, when the supplier raised its price?

A) The court found for the supplier and awarded the higher price for deliveries after January 1, based on the plain meaning of "adhered to for the year", the customer practice in the industry to raise prices January 1, and the fact that the buyer had actual notice of the price increase.
B) The court found for the supplier and awarded the higher price for deliveries after January 1, because there were witnesses who supported the supplier's testimony.
C) The court found for the buyer and split the price difference, because the contract is between merchants, who are held to a higher standard of care, but the buyer had actual notice of the price increase.
D) The court found for the buyer and awarded the lower price for deliveries until February 1, because the contract is between merchants, who are held to a higher standard of care.
E) The court found for the buyer and awarded the lower price for deliveries until February 1, based on the plain meaning of "adhered to for a year".

Question 71

Which of the following statements is true about the UCC and the CISG?

A) Only the UCC provides guidance in international litigation.
B) The CISG requirements for the statute of frauds are more lenient than those under the UCC.
C) Only the UCC covers offer and acceptance.
D) The CISG requirements for the statute of frauds are the same as those under the UCC.
E) The UCC preempts the CISG because all states have adopted the UCC in some form.

Question 72

Which of the following items would not be considered a "good" under the UCC?

A) Light bulbs to be placed in a skyscraper.
B) Trees cut from a parcel of land to be turned into paper.
C) A book that has been copyrighted and sold to a bookstore.
D) The copyright of a best-selling novel.
E) A box of hammers, with a value of $499.

Question 73

What are the UCC's exceptions to the statute of fraud's writing requirements?

A) There are no exceptions for the statute of fraud's writing requirements.
B) Admission and partial performance, but specifically manufactured goods must be in writing.
C) Specifically manufactured goods, admission, and modification.
D) Specifically manufactured goods, admission, and partial performance.
E) Specifically manufactured goods and admission, but there is no exception for partial performance.

Question 74

According to Exhibit 21-5 in the text, if quantity is left open in a contract for the sale of goods under the UCC, how will a court most likely interpret this provision?

A) A "reasonable" quantity is supplied at the time of delivery.
B) A "reasonable" quantity is supplied at the time of trial.
C) The court will look to the specific industry standards in the UCC.
D) The court generally has no basis for determining a remedy.
E) The court will decide the quantity.

Question 75

Are there any steps Emilia should take in small claims court, or before she goes, regarding the customer who ordered the plain T-shirts?

A) No, because once the parties are in court, positions of the parties are frozen.
B) No, because once the parties are in court, only the judge can add evidence.
C) Yes, she should attempt to get the customer to admit that he ordered the T-shirts.
D) Yes, she should dismiss the case before she is charged with sanctions.
E) Yes, she should dismiss the case before she is charged with the other party's attorney fees.

Question 76

[Lucky Morton] Morton, who owns 500 acres of land in east Texas, has just discovered oil under his property. He calls OilEx, who wants to buy all of the oil from Morton's property. Morton is thrilled about the money he will make from selling the oil and he signs a contract allowing OilEx to set up a drilling station on his property. Thinking he can get more money off his land, Morton cuts down all of his trees with a chainsaw and then sells them to PaperCo to be made into paper. Meanwhile, Morton's neighbor offers to buy Morton's wheat crop after it is harvested in the Fall, and Morton agrees.
Is Morton's contract for Winslow to purchase his wheat crop covered by the UCC?

A) No, because the wheat is still growing and affixed to the land, and land sales are covered by common law.
B) No, because crops are not considered goods.
C) Yes, but only if Morton sells Winslow the right to come onto his property and remove the wheat.
D) Yes, but only if Morton cuts them down and then sells them to Winslow.
E) Yes, because crops that are sold while still growing in the field are considered goods.

Question 77

Which of the following statements is true about the Uniform Commercial Information Transactions Act (UCITA)?

A) Unlike the UCC, states can decide whether or not to adopt UCITA.
B) UCITA applies to physical goods, like the UCC.
C) UCITA was adopted by the UCC.
D) In 2001, Virginia became the first state to enact UCITA, probably because major Internet-related companies are headquartered in Northern Virginia.
E) All states have adopted UCITA.

Question 78

[Lucky Morton] Morton, who owns 500 acres of land in east Texas, has just discovered oil under his property. He calls OilEx, who wants to buy all of the oil from Morton's property. Morton is thrilled about the money he will make from selling the oil and he signs a contract allowing OilEx to set up a drilling station on his property. Thinking he can get more money off his land, Morton cuts down all of his trees with a chainsaw and then sells them to PaperCo to be made into paper. Meanwhile, Morton's neighbor offers to buy Morton's wheat crop after it is harvested in the Fall, and Morton agrees.
Is Morton's contract for PaperCo to purchase his trees covered by the UCC?

A) No, because the trees are part of the land and land sales are covered by common law.
B) Yes, because trees are always considered goods.
C) Yes, but only if Morton sells PaperCo the right to come onto his property and remove the trees.
D) Yes, because Morton cut them down and then sold them to PaperCo.
E) Yes, but only if PaperCo removes the trees.

Question 79

For businesses that operate in the global economy, ________ clauses would be advantageous to include in a contract in order to avoid conflict.

A) only choice-of-language and forum-selection
B) only choice-of-language and choice-of-law
C) only choice-of-law and forum-selection
D) choice-of-language, forum-selection and choice-of-law
E) choice-of-law clauses would be the only allowable clause under the CISG

Question 80

Which of the following statements is true regarding merchants under the UCC?

A) The UCC has different rules for transactions involving merchants and transactions involving nonmerchants, however merchants and non-merchants are generally held to the same standard of care and behavior.
B) Although the UCC applies the same rules for transactions involving merchants and transactions involving nonmerchants, merchants are generally held to a high standard of care and behavior than nonmerchants.
C) Under the UCC, merchants and nonmerchants are sometimes treated differently, however, they are both held to the same standard of care and behavior.
D) The UCC has different rules for transactions involving merchants and transactions involving nonmerchants, and merchants are generally held to a high standard of care and behavior than nonmerchants.
E) There is no distinction between merchants and nonmerchants under the UCC.