Exam 18: Formation of Sales and Lease Contracts

A lessor and lessee orally agree to a lease of goods in the amount of $400 per month.The lease is later modified to $600 per month.Must the modification be in writing?

The formation of sales and lease contracts requires no consideration.

Jean owns a small manufacturing company in North Carolina with a sales force of ten salespersons.The company provides a company car to each of the salespersons to use.The company sells throughout the southeastern United States.Jean suspects that during the long,hot,humid summer the salespersons often do not take the fastest route from one customer to another because they enjoy the comfort of the air conditioning in their cars.Jean decides to order a fleet of ten cars without air conditioning,believing that the salespersons will spend less time in their cars and more time in the offices of potential customers.Air conditioning is an option on the economy car,the Mink,although the factory makes all Minks with air conditioning unless a customer special orders one without air conditioning.The salesperson is a little surprised at Jean's plan,but reaches an oral agreement with Jean for the 10 cars.The salesperson orders the cars.A few weeks later Jean's sales force finds out about the plan and revolts.Jean decides it is not worth angering the sales force to make them use nonair-conditioned cars.She calls the salesperson at the dealer to cancel the order for the cars,six of which have arrived,and the other four,which will be built next week.Can the dealer hold Jean to the purchase of any of the cars?

What is required to meet the writing requirement of the Statute of Frauds under the UCC?

A "firm offer" may be made by a nonmerchant seller.

What is "course of performance?"

Every state except Louisiana has enacted the UCC as its commercial statute.

Where a contract for the sale of goods does not mention the place of delivery for the goods,which of the following is true?

Under the UCC,firm offers can be made:

A retailer ordered some inventory by phone from a manufacturer.The order was for 1,000 machines from the manufacturer's inventory at $300 each.The manufacturer sent the retailer a fax moments later detailing the order.The retailer looked at the fax and was satisfied that it stated the terms of the contract,but never responded in any way.When the goods were delivered on time a month later,the retailer refused to accept them,asserting that the contract was unenforceable.Which is true?

Additional terms to a contract are considered proposed additions if one or both parties to a sales contract are nonmerchants.

Seller orally contracts to sell goods to Buyer for a total price of $450.Several days later,both parties orally agree to raise the price to $550 because of a shortage of these goods.When the goods are delivered,Buyer refuses to accept them.Seller sues.Both parties are merchants.In this situation,which of the following is true?

According to the UCC,which of the following will be enforceable even if it is not in writing?

The UCC applies only to sales between merchants.

Where the offeror is a merchant and the offeree is a nonmerchant,what is the effect of minor different terms contained in an acceptance?

A finance lease is a three-party transaction comprised of the lessor,the lessee,and the offeror.

In a contract for the sale of goods,if the seller does not have a place of business and the contract does not mention delivery in any way,delivery is to be made at the buyer's house.

A merchant is a person who:

A buyer purchases some equipment that costs $20,000.As part of the contract,the seller agrees to install this equipment for an additional $2,000.After the buyer begins using the equipment,problems develop.Some of the problems relate to how the equipment was installed,while others relate to the equipment itself.Which of the following is true?

Melissa purchased a compact satellite dish as part of a contract to obtain satellite television service.Melissa owns a small bar and plans to use the dish and cable service in her bar.The contract provided that she pay $200 for the dish,after which she would receive 12 months of television service through the satellite dish at no charge.After 12 months,in order to receive continued service,she would have to pay the company's regular monthly charge of $21,or her dish would be disabled.The dish is specially manufactured such that it can receive only the signals provided by the company that provided her with the dish.The company installed the dish in Melissa's bar as provided in the contract.For the first couple of months,Melissa was happy with the service.It was less expensive than regular cable television and the quality of the picture was superior.In the fourth month of the contract,Melissa began having problems.First,the dish became slightly warped.Second,the signals received by the dish began to fail frequently,at least once every week when bar patrons wanted to watch television.Melissa assumes the signal fails at other times when patrons are not watching.The warping of the dish appears to have affected the quality of the picture.Melissa had a friend hold the dish and push it into its original shape while Melissa watched the television,and the picture improved as long as the friend held the dish.The company refuses to address Melissa's complaints.Discuss whether the Uniform Commercial Code or common law would apply in resolving each of Melissa's problems.Also,discuss whether Melissa would be considered a merchant under the UCC.