Deck 21: Introduction to Sales and Lease Contracts

Question 1

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

Answer 1

False

Question 2

The UCC pertains to all business transactions.

Answer 2

False

Question 3

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

Answer 3

False

Question 4

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

Question 5

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 6

The UCC was created in ____.

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

Question 7

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

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

Question 8

Which of the following 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 9

Which of the following was the result in Eureka Water Company v. Nestle Waters North America Inc., the case in the text involving whether a trade name is considered a good or nongood?

A) The court ruled that a trade name is a good.
B) The court ruled that a trade name is not a good.
C) The court ruled that a trade name is a good if other items that are clearly goods are involved in a contractual dispute; otherwise, it is a nongood.
D) The court ruled that a trade name is a good if it was considered a good in other previously settled disputes between the same parties; otherwise, it is a nongood.
E) The court ruled that a trade name is a good if it is the only matter involved in a dispute between parties; otherwise, it is a nongood.

Question 10

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

Question 11

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

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

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

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

Question 14

How many states have failed to adopt any portions of the UCC?

A) 18
B) 7
C) 5
D) 4
E) 0

Question 15

The UCC recognizes the concept of unconscionability.

Question 16

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

Question 17

A consumer lease is the same thing as a finance lease.

Question 18

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

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

Question 19

Which of the following is true regarding the sources of laws that interpret sales contracts?

A) Three sources of laws that interpret sales contracts exist: state common law, the Uniform Commercial Code, and state statutory law.
B) Two sources of laws that interpret sales contracts exist: state common law and the Uniform Commercial Code.
C) Two sources of laws that interpret sales contracts exist: the Uniform Commercial Code and state statutory law.
D) Two sources of laws that interpret sales contracts exist: state common law and state statutory law.
E) The Uniform Commercial code is the only source of law interpreting sales contracts.

Question 20

The UCC is divided into sections known as ______.

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

Question 21

Which of the following was the result in the case in the text, Novamedix Limited v. NDM Acquisition Corporation and Vesta Healthcare Inc., in which the plaintiff claimed that a settlement agreement was a contract for the sale of goods breached by the defendant because a type of medical slipper involved in the settlement agreement could not be resold?

A) That the transaction would not be treated as a contract for the sale of goods because the predominant purpose of the settlement agreement was to settle a patent infringement lawsuit.
B) That the transaction would not be treated as a contract for the sale of goods because it was a mixed type of transaction.
C) That the transaction would not be treated as a contract for the sale of goods because of the involvement of medical treatment issues.
D) That the transaction would be treated as a contract for the sale of goods because the essential nature of the agreement was the exchange of slippers for the release of a legal right.
E) That the transaction would be treated as a contract for the sale of goods because it was a mixed type of transaction.

Question 22

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

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

Question 23

Under Article 2(A) of the UCC, a[n] ______ 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) Acquiror

Question 24

Which of the following is true regarding material 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 25

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

Question 26

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 27

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 28

Which of the following is a special type of lease?

A) Consumer and finance but not terminal
B) Finance but not consumer or terminal
C) Terminal and finance but not consumer
D) Terminal but not finance or consumer
E) Consumer but not finance or terminal

Question 29

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

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

Question 30

To resolve contract issues in cases in which a tangible good is mixed with something intangible, most states employ some variation of the ______.

A) Mixed-purpose test
B) Unclear-purpose test
C) Goods-services test
D) Predominant-purpose test
E) Substantial-purpose test

Question 31

Regarding the "Case Opener," which of the following best represents the decision on whether the cell towers at issue constituted goods?

A) That the contract involving the purchase of the cell towers was predominately for the purchase of real estate and that the towers were, therefore, not goods.
B) That the contract involving the purchase of the cell towers predominately involved cellular telephone service and that the towers were, therefore, not goods.
C) That the contract involving the purchase of the cell towers was not for goods because the towers were not easily movable.
D) That the contract involving the purchase of the cell towers was predominately for goods because common law was applied by contract.
E) That the contract involving the purchase of the cell towers was predominantly for the sale of goods for reasons including that the towers had physical property and could be moved.

Question 32

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 33

A ______ lease is 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.

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

Question 34

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 35

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 of 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 a 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 36

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 37

If a firm offer is silent as to time, the UCC assumes ______.

A) A one-year irrevocability period
B) A six-month irrevocability period
C) A four-month irrevocability period
D) A three-month irrevocability period
E) A one-week irrevocability period

Question 38

Under the UCC, how may an acceptance be made?

A) Only by 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 39

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

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

Question 40

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 41

"Customer Uncertainty." Wallace wanted baseball caps with the name of the firm of which he was president, ABC Corporation, emblazoned on the front. Fran, a merchant in specialized goods, orally agreed with Wallace that she would sell to 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, Wallace called to cancel the order because his firm had just announced a merger and would no longer be known as ABC Corporation. Fran told him to forget canceling the contract because she had just finished the caps. Wallace told Fran that she should have been smarter and had him sign something because without a writing, she does not have a chance in court. Fran 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 $400 each to give out at a league banquet. He just wanted a variety of caps with no name on them because players from different teams would be at the banquet. Fran had sent a confirming letter to the coach. Fran had the caps packed up and ready to go. Twenty days later, 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 and that it is just that he do so because a big order was involved. Finally, Fran plans on taking to small claims court 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.



-Are there any steps Fran 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 to the judge 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 42

"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 XYZ carpet, and he also contracted with XYZ to do the installation. Unfortunately, Beau almost immediately started to have problems with the carpet. Beau told the sales manager for XYZ Carpet that he was planning on bring 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 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 bound by the offer only if Beau can establish reliance.
E) ABC Carpet was bound by the offer.

Question 43

The ______ is a legal concept that aims to protect sales or lease contracts that the parties intended 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) Anti-oral evidence rule

Question 44

"Customer Uncertainty." Wallace wanted baseball caps with the name of the firm of which he was president, ABC Corporation, emblazoned on the front. Fran, a merchant in specialized goods, orally agreed with Wallace that she would sell to 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, Wallace called to cancel the order because his firm had just announced a merger and would no longer be known as ABC Corporation. Fran told him to forget canceling the contract because she had just finished the caps. Wallace told Fran that she should have been smarter and had him sign something because without a writing, she does not have a chance in court. Fran 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 $400 each to give out at a league banquet. He just wanted a variety of caps with no name on them because players from different teams would be at the banquet. Fran had sent a confirming letter to the coach. Fran had the caps packed up and ready to go. Twenty days later, 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 and that it is just that he do so because a big order was involved. Finally, Fran plans on taking to small claims court 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.



-Which of the following is correct regarding Wallace's assertion that Fran cannot recover the cost of the caps?

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

Question 45

"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 XYZ carpet, and he also contracted with XYZ to do the installation. Unfortunately, Beau almost immediately started to have problems with the carpet. Beau told the sales manager for XYZ Carpet that he was planning on bring 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 Beau?

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

Question 46

Which of the following is true regarding state rights in relation to the UCC?

A) Because the UCC is a federal law, states have no rights to change it.
B) Each state is allowed to rewrite parts of the UCC to reflect the wishes of its state legislature.
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(A) of the UCC but not to any other articles.

Question 47

"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 XYZ carpet, and he also contracted with XYZ to do the installation. Unfortunately, Beau almost immediately started to have problems with the carpet. Beau told the sales manager for XYZ Carpet that he was planning on bring 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 Beau 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 48

"Dress Shop Problems." Susie, 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 Susie's good will. Susie sent Kim a memo confirming their oral agreement, including the modification, but heard nothing. When the dresses did not arrive within 30 days, Susie 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 49

Under the UCC, courts allow parties to explain or supplement a written contract with which of the following?

A) Additional terms that are consistent with the terms in the agreement, evidence that helps the court interpret the agreement, and any evidence as to price.
B) Evidence that helps the court interpret the agreement, but not additional terms that are consistent with the terms in the agreement or any evidence as to price.
C) Any evidence as to price, but not additional terms that are consistent with the terms in the agreement or evidence that helps the court interpret the agreement.
D) Additional terms that are consistent with the terms in the agreement, but not evidence that helps the court interpret the agreement or any evidence as to price.
E) Additional terms that are consistent with the terms in the agreement and evidence that helps the court interpret the agreement, but not any evidence as to price.

Question 50

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

A) The contract is void.
B) The court can only refuse to enforce the contract or lease in total.
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 51

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 52

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 53

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 54

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 55

"Dress Shop Problems." Susie, 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 Susie's good will. Susie sent Kim a memo confirming their oral agreement, including the modification, but heard nothing. When the dresses did not arrive within 30 days, Susie 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 56

"Dress Shop Problems." Susie, 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 Susie's good will. Susie sent Kim a memo confirming their oral agreement, including the modification, but heard nothing. When the dresses did not arrive within 30 days, Susie 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 Susie 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 Susie did not send Kim a registered letter memorializing the oral conversation as is required by the UCC.

Question 57

When courts interpret sales and lease contracts, how do they prioritize express terms, course of performance, course of dealing, and usage of trade?

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

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 59

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 60

"Customer Uncertainty." Wallace wanted baseball caps with the name of the firm of which he was president, ABC Corporation, emblazoned on the front. Fran, a merchant in specialized goods, orally agreed with Wallace that she would sell to 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, Wallace called to cancel the order because his firm had just announced a merger and would no longer be known as ABC Corporation. Fran told him to forget canceling the contract because she had just finished the caps. Wallace told Fran that she should have been smarter and had him sign something because without a writing, she does not have a chance in court. Fran 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 $400 each to give out at a league banquet. He just wanted a variety of caps with no name on them because players from different teams would be at the banquet. Fran had sent a confirming letter to the coach. Fran had the caps packed up and ready to go. Twenty days later, 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 and that it is just that he do so because a big order was involved. Finally, Fran plans on taking to small claims court 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.



-Which of the following is true regarding Fran's assertion that she should be allowed to recover from the coach?

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

Question 61

Discuss when a party may be considered a "merchant" under the UCC.

Question 62

Describe a finance lease and explain how it is different from a regular lease contract.

Question 63

Contrast the requirement of consideration for modification of contracts under the common law and under the UCC.

Question 64

List what is required in order for an offer to be considered a firm offer under the UCC. Also discuss the effect if a firm offer is silent as to time and compare that with the result of silence as to time under the common law.

Question 65

Set for the circumstances under which the parol evidence rule would not apply and parties would be allowed to explain or supplement a written contract.