Question 1

Modification to a sales or lease contract is binding even if it is made under duress.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following articles in the UCC deals with the sale of goods?

Accepted Answer

A) Article 2 
B) Article 4 
C) Article 5 
D) Article 8 
A) Article 2 
B) Article 4 
C) Article 5 
D) Article 8

Question 3

Which of the following describes a mixed sale?

Accepted Answer

A) a sale that involves two or more intangible goods 
B) a sale that involves the passing of title of goods from a seller to a buyer for a price 
C) a sale that involves the possession and use of named goods for a set 
D) a sale that involves the provision of a service and a good in the same transaction 
A) a sale that involves two or more intangible goods 
B) a sale that involves the passing of title of goods from a seller to a buyer for a price 
C) a sale that involves the possession and use of named goods for a set 
D) a sale that involves the provision of a service and a good in the same transaction

Question 4

Stelwire LLC, a vintage car dealer, advertises the sale of a 1964 Ford Thunderbolt.Ralph responds to the advertisement with an offer of $80, 000 for the car.Stelwire signs a written assurance to keep that offer open to Ralph for a fortnight.Five days before the fortnight is up, Stelwire sells the car to another buyer.At the end of the fortnight period, Ralph tenders $80, 000 for the car, but the car has already been sold.Ralph then buys the same model car from another dealer for $90, 000 and sues Stelwire for breach of contract.The court rules that Stelwire is liable to Ralph for breach of contract, and orders Stelwire to pay Ralph the difference of $10, 000 he paid extra to the second dealer for the car.
-Which of the following rules governs the execution of this contract?

Accepted Answer

A) firm offer rule 
B) mirror image rule 
C) battle of the forms rule 
D) gap-filling rule 
A) firm offer rule 
B) mirror image rule 
C) battle of the forms rule 
D) gap-filling rule

Question 5

A person who transfers the right of possession and use of goods under a lease is known as the ________.

Accepted Answer

A) lessor 
B) lessee 
C) seller 
D) consignee 
A) lessor 
B) lessee 
C) seller 
D) consignee

Question 6

Article 2 of the UCC applies to sales contracts for the sale of intangible goods.

Accepted Answer

A) True 
 B)False

Question 7

In a finance lease, the lessor manufactures and supplies the goods of the contract.

Accepted Answer

A) True 
 B)False

Question 8

Miranda Airways, a commercial air carrier, has a contract with Wurtherton Inc., an airplane manufacturer, to purchase a new plane.Due to a sudden shortage of cash, Miranda Airways goes to MetrosBank.MetrosBank issues a document to Wurtherton that if Miranda does not pay for the transaction, MetrosBank would.Wurtherton considers the offer, and then sends an acceptance with additional terms.The additional terms stipulates that Miranda Airways could have the new airplane for a period of 10 years, and then return it to Wurtherton.Miranda Airways agrees to the acceptance, and Wurtherton hands the new airplane over to them.
-What is the nature of the contract between Miranda Airways and Wurtherton?

Accepted Answer

A) sale of goods 
B) lease 
C) counteroffer 
D) option contract 
A) sale of goods 
B) lease 
C) counteroffer 
D) option contract

Question 9

Option contracts are an example of irrevocable offers.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is true of additional terms being added under the UCC?

Accepted Answer

A) They are considered to be counteroffers. 
B) It can be added when the sale is between two merchants. 
C) It can be added into the contract without the consent of the offeror. 
D) It can be added in a sale that involves one or both parties being a nonmerchant. 
A) They are considered to be counteroffers. 
B) It can be added when the sale is between two merchants. 
C) It can be added into the contract without the consent of the offeror. 
D) It can be added in a sale that involves one or both parties being a nonmerchant.

Question 11

The UCC does not allow for open terms to be read into a sales or lease contract.

Accepted Answer

A) True 
 B)False

Question 12

What is the function of the gap-filling rule used under the UCC?

Accepted Answer

A) It helps open terms be read into a contract. 
B) It helps a merchant revoke his offer even after acceptance. 
C) It assures the offeree that goods will be held open for a reasonable time. 
D) It protects the offeror from additional terms that maybe added by the offeree. 
A) It helps open terms be read into a contract. 
B) It helps a merchant revoke his offer even after acceptance. 
C) It assures the offeree that goods will be held open for a reasonable time. 
D) It protects the offeror from additional terms that maybe added by the offeree.

Question 13

A ________ is a transfer of the right to the possession and use of named goods for a set term in return for certain consideration.

Accepted Answer

A) trade 
B) gift 
C) lease 
D) sale 
A) trade 
B) gift 
C) lease 
D) sale

Question 14

The ________ requires all contracts for the sale of goods costing $500 or more and lease contracts involving payments of $1, 000 or more to be in writing.

Accepted Answer

A) parol evidence rule 
B) open price term 
C) firm offer rule 
D) Statute of Frauds 
A) parol evidence rule 
B) open price term 
C) firm offer rule 
D) Statute of Frauds

Question 15

Which of the following is true for terms to be expressed in a contract under the common law of contract?

Accepted Answer

A) Additional terms can be added during acceptance. 
B) Additional terms can be added without consideration. 
C) Gap-filling rules are permitted for time, delivery, and prices of goods. 
D) Contract must contain all the material terms of the parties' agreement. 
A) Additional terms can be added during acceptance. 
B) Additional terms can be added without consideration. 
C) Gap-filling rules are permitted for time, delivery, and prices of goods. 
D) Contract must contain all the material terms of the parties' agreement.

Question 16

The firm offer rule allows the offeror to revoke an offer at any point of time prior to the acceptance.

Accepted Answer

A) True 
 B)False

Question 17

Article 5 of the UCC governs letter of credit.

Accepted Answer

A) True 
 B)False

Question 18

The battle of the forms takes place between a merchant and a nonmerchant.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following sales would be covered by Article 2 of the UCC?

Accepted Answer

A) the sale of intangible goods 
B) the sale of tangible goods 
C) the sale of real estate 
D) the sale of stocks 
A) the sale of intangible goods 
B) the sale of tangible goods 
C) the sale of real estate 
D) the sale of stocks

Question 20

Which of the following acceptances is allowed for an offer under common law?

Accepted Answer

A) mirror image rule acceptance 
B) open term acceptance 
C) accommodation 
D) additional terms acceptance 
A) mirror image rule acceptance 
B) open term acceptance 
C) accommodation 
D) additional terms acceptance

Exam 18: Formation of Sales and Lease Contracts

Modification to a sales or lease contract is binding even if it is made under duress.

Which of the following articles in the UCC deals with the sale of goods?

Which of the following describes a mixed sale?

A person who transfers the right of possession and use of goods under a lease is known as the ________.

Article 2 of the UCC applies to sales contracts for the sale of intangible goods.

In a finance lease, the lessor manufactures and supplies the goods of the contract.

Option contracts are an example of irrevocable offers.

Which of the following is true of additional terms being added under the UCC?

The UCC does not allow for open terms to be read into a sales or lease contract.

What is the function of the gap-filling rule used under the UCC?

A ________ is a transfer of the right to the possession and use of named goods for a set term in return for certain consideration.

The ________ requires all contracts for the sale of goods costing $500 or more and lease contracts involving payments of $1, 000 or more to be in writing.

Which of the following is true for terms to be expressed in a contract under the common law of contract?

The firm offer rule allows the offeror to revoke an offer at any point of time prior to the acceptance.

Article 5 of the UCC governs letter of credit.

The battle of the forms takes place between a merchant and a nonmerchant.

Which of the following sales would be covered by Article 2 of the UCC?

Which of the following acceptances is allowed for an offer under common law?

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