Question 1

By definition,a sale under Article 2 of the UCC requires:

Accepted Answer

A) that the parties involved be merchants. 
B) that the product involved be goods,services,or a mixture;that the sale be between or among merchants;and that the sale take place in the normal course of business for that industry. 
C) that title to the goods pass between the seller and the buyer and that a price be paid for the goods. 
D) that the service being sold cannot be a gift or a bailment. 
A) that the parties involved be merchants. 
B) that the product involved be goods,services,or a mixture;that the sale be between or among merchants;and that the sale take place in the normal course of business for that industry. 
C) that title to the goods pass between the seller and the buyer and that a price be paid for the goods. 
D) that the service being sold cannot be a gift or a bailment.

Question 2

The UCC is federal legislation enacted by Congress.

Accepted Answer

A) True 
 B)False

Question 3

Lorene,an artist,orally agrees to sell Sabrina a painting for $600.While Lorene is busy talking on the phone,Sabrina writes her a note on the back of an envelope she finds in her purse.The signed note states that she will stop by the studio to pick up the painting within the week.Sabrina changes her mind about the painting,and when Lorene sues to enforce the contract,Sabrina defends on the basis of the statute of frauds.Sabrina will succeed with this defense.

Accepted Answer

A) True 
 B)False

Question 4

To simplify,clarify,and modernize the law governing commercial transactions,the UCC permits the use of "open terms" in sales contracts.In the use of "open terms," which of the following is true?

Accepted Answer

A) The court will use market value and other comparable sales to determine what a reasonable price would have been at the time of delivery if the parties have not settled the price in the contract. 
B) If time of payment is not mentioned in the contract,payment within a commercially reasonable time is presumed. 
C) If the contract permits the buyer or seller to determine the price during contract performance,the UCC requires the party to do so in good faith. 
D) All of the above are true. 
A) The court will use market value and other comparable sales to determine what a reasonable price would have been at the time of delivery if the parties have not settled the price in the contract. 
B) If time of payment is not mentioned in the contract,payment within a commercially reasonable time is presumed. 
C) If the contract permits the buyer or seller to determine the price during contract performance,the UCC requires the party to do so in good faith. 
D) All of the above are true.

Question 5

Dean Builders agrees to purchase all of its sump pump requirements for the new houses it builds from Satisfactory Sump Pump,Inc.These two business have had similar agreements the last three years and Dean's requirements have averaged 100 sump pumps per year.This year there was an unusually wet spring and Dean's requirements doubled to 200 sump pumps.Because of the high demand of sump pumps,the market price of the pumps tripled.Satisfactory Sump Pump,Inc.delivers 100 pumps at $75,the contract price.Satisfactory has exhausted its inventory and cannot deliver any more,so Dean buys the other 100 pumps from other suppliers at $225 each.Dean sues Satisfactory Sump Pump,Inc.for the additional expense.What is the most likely result?

Accepted Answer

A) Satisfactory Sump Pump,Inc.wins;output and requirements contracts are not enforceable since no quantity is stated. 
B) Dean wins;Satisfactory Sump Pump,Inc.agreed to meet the needs of Dean and did not do so,which is a breach. 
C) Satisfactory Sump Pump,Inc.wins;requirements contracts are governed by a good faith standard,and it was unreasonable for Dean to demand so many additional pumps. 
D) Dean wins;the requirement of good faith applies only between merchants,and Dean is not a merchant. 
A) Satisfactory Sump Pump,Inc.wins;output and requirements contracts are not enforceable since no quantity is stated. 
B) Dean wins;Satisfactory Sump Pump,Inc.agreed to meet the needs of Dean and did not do so,which is a breach. 
C) Satisfactory Sump Pump,Inc.wins;requirements contracts are governed by a good faith standard,and it was unreasonable for Dean to demand so many additional pumps. 
D) Dean wins;the requirement of good faith applies only between merchants,and Dean is not a merchant.

Question 6

Under the UCC statute of frauds,the writing for a sale of goods must:

Accepted Answer

A) state quantity. 
B) state price. 
C) be signed by both parties. 
D) be notarized. 
A) state quantity. 
B) state price. 
C) be signed by both parties. 
D) be notarized.

Question 7

Office Plus,an office supply store,ordered 600 blank CDs from Curtis Co. ,a manufacturer of computer products.Office Plus placed the order using a preprinted purchase order form;Curtis acknowledged the order by sending a preprinted acceptance form back to Office Plus.Unlike Office Plus' form which says nothing about packaging,Curtis's form specifies that the CDs will be packaged in cases of 10 CDs per box,10 boxes per case.Which statement is correct?

Accepted Answer

A) The UCC does not cover computer CDs. 
B) Curtis's packaging term is a different term which materially changes the offer.There is no contract. 
C) Curtis's packaging term is an additional term and therefore a part of the contract unless Office Plus promptly objects to the term. 
D) The UCC does not cover the contract because both parties are merchants. 
A) The UCC does not cover computer CDs. 
B) Curtis's packaging term is a different term which materially changes the offer.There is no contract. 
C) Curtis's packaging term is an additional term and therefore a part of the contract unless Office Plus promptly objects to the term. 
D) The UCC does not cover the contract because both parties are merchants.

Question 8

Pizazz,Inc.leased the 34th floor in an office building in downtown Chicago.This contract is governed by Article 2A of the UCC.

Accepted Answer

A) True 
 B)False

Question 9

Betty's BBQ orally contracts with Denny's Design House for 10,000 matchbooks at the price of 10 cents per matchbook.The matchbooks are to be embossed with a logo to be designed by Denny's Design promoting Betty's BBQ.Price,payment terms,delivery terms are agreed upon between the parties.Denny's Design creates the logo,gets Betty's BBQ's approval of the design and begins applying the logo on the matchbook covers.Denny's Design has almost finished the order when Betty's BBQ calls to say it has decided to make the eatery a smoke-free restaurant and cancels the order.Denny's Design sues,but Betty's BBQ states that the agreement is unenforceable under the statute of frauds.Who wins?

Accepted Answer

A) Denny's Design House wins.This situation falls under an exception to the statute of frauds. 
B) Denny's Design House wins.This is a service contract for design of a logo.Therefore,the UCC,including the statute of frauds provisions of Article 2,does not apply. 
C) Betty's BBQ wins.This is a contract for $1000.The statute of frauds requires all sales contracts in excess of $500 be in writing. 
D) Betty's BBQ wins.The statute of frauds only applies to merchants.Betty's BBQ is not a merchant in this instance because it intended to give the matchbooks away and not sell them. 
A) Denny's Design House wins.This situation falls under an exception to the statute of frauds. 
B) Denny's Design House wins.This is a service contract for design of a logo.Therefore,the UCC,including the statute of frauds provisions of Article 2,does not apply. 
C) Betty's BBQ wins.This is a contract for $1000.The statute of frauds requires all sales contracts in excess of $500 be in writing. 
D) Betty's BBQ wins.The statute of frauds only applies to merchants.Betty's BBQ is not a merchant in this instance because it intended to give the matchbooks away and not sell them.

Question 10

A requirements contract is a contract:

Accepted Answer

A) in restraint of trade. 
B) in which the seller provides all of the goods that the buyer needs. 
C) in which the buyer purchases all of the goods that the seller produces. 
D) in which a party must buy a product it does not want in order to be allowed to buy a product it requires. 
A) in restraint of trade. 
B) in which the seller provides all of the goods that the buyer needs. 
C) in which the buyer purchases all of the goods that the seller produces. 
D) in which a party must buy a product it does not want in order to be allowed to buy a product it requires.

Question 11

Lian contracted for financial services from E-wise.This contract is governed by Article 2 of the UCC.

Accepted Answer

A) True 
 B)False

Question 12

Wayne agrees over the phone to sell L.J.Cartwright 1,000 yards of 1-inch diameter rope.Wayne honestly believes that L.J.Cartwright offered to pay $1.00 per yard whereas L.J.Cartwright actually offered to pay 75 cents per yard.If the parties subsequently take their dispute to court,the fact that L.J.Cartwright admits on the stand that he offered to pay Wayne 75 cents per yard will:

Accepted Answer

A) prevent L.J.Cartwright from using the statute of frauds to nullify the contract. 
B) create an unconscionable contract. 
C) make it possible for Wayne to enforce the contract to sell 1,000 yards of rope at a price of 75 cents per yard. 
D) Both a and c are correct. 
A) prevent L.J.Cartwright from using the statute of frauds to nullify the contract. 
B) create an unconscionable contract. 
C) make it possible for Wayne to enforce the contract to sell 1,000 yards of rope at a price of 75 cents per yard. 
D) Both a and c are correct.

Question 13

If Edmund and Kaylin have a writing mistakenly showing a sale and purchase of goods for $10,000 when the price should have been $1,000,a court will most likely:

Accepted Answer

A) enforce the agreement,relying on oral testimony to determine the correct price. 
B) only enforce the agreement as written. 
C) not hear the case unless both parties are merchants. 
D) not enforce the agreement since the writing did not reflect a meeting of the minds of the parties. 
A) enforce the agreement,relying on oral testimony to determine the correct price. 
B) only enforce the agreement as written. 
C) not hear the case unless both parties are merchants. 
D) not enforce the agreement since the writing did not reflect a meeting of the minds of the parties.

Question 14

Trey,a full-time college student,sold his car to Don,another student.In the performance of this contract,Trey:

Accepted Answer

A) has a duty of good faith which means honesty in fact and the exercise of good judgment. 
B) has a duty of good faith which means honesty in fact. 
C) has a duty of good faith which means honesty in fact and the exercise of reasonable commercial standards of fair dealing. 
D) does not have a duty of good faith. 
A) has a duty of good faith which means honesty in fact and the exercise of good judgment. 
B) has a duty of good faith which means honesty in fact. 
C) has a duty of good faith which means honesty in fact and the exercise of reasonable commercial standards of fair dealing. 
D) does not have a duty of good faith.

Question 15

In a "mixed contract," one involving a sale of both goods and services,the court will:

Accepted Answer

A) apply the UCC to the provisions of the contract involving the sale of goods and the common law to the provisions involving the sale of services. 
B) apply the lex mercatoria to the contract. 
C) first determine the dominant purpose of the contract.If the sale of goods dominates the contract,then the court will apply the law of the UCC,Article 2.If the sale of services dominates the contract,the court will apply the common law. 
D) apply UCC Article 2A. 
A) apply the UCC to the provisions of the contract involving the sale of goods and the common law to the provisions involving the sale of services. 
B) apply the lex mercatoria to the contract. 
C) first determine the dominant purpose of the contract.If the sale of goods dominates the contract,then the court will apply the law of the UCC,Article 2.If the sale of services dominates the contract,the court will apply the common law. 
D) apply UCC Article 2A.

Question 16

ABC Siding,Inc.manufactures aluminum siding.ABC enters into a contract to deliver siding to Slippery Siding,Ltd. ,a retailer of aluminum siding.The written agreement insists that all modifications to the agreement be in writing and signed by both parties.This prohibition against oral modifications is:

Accepted Answer

A) valid regardless of whether the clause is signed separately. 
B) invalid unless the clause is signed separately by Slippery Siding,Ltd. 
C) invalid unless the clause is signed separately by ABC Siding,Inc. 
D) invalid unless new consideration is supplied by the parties when the modification agreement is made. 
A) valid regardless of whether the clause is signed separately. 
B) invalid unless the clause is signed separately by Slippery Siding,Ltd. 
C) invalid unless the clause is signed separately by ABC Siding,Inc. 
D) invalid unless new consideration is supplied by the parties when the modification agreement is made.

Question 17

Elizabeth worked as a salesperson in a carpet store.She was in the midst of divorce proceedings and needed some money.Elizabeth sold her wedding ring.Elizabeth is considered a merchant with regard to the sale of the ring.

Accepted Answer

A) True 
 B)False

Question 18

Sean of Sean's Shrimp House was enjoying a cup of cappuccino while visiting with Ollie at Ollie's Ocean Front Bar & Grill.During the course of their conversation,Sean agreed to supply 100 pounds of shrimp per month for the next year to Ollie's restaurant at the price of $2.50 per pound.When Sean got back to his office,he sent a written confirmation of the agreement to Ollie.Six weeks after receiving the confirmation Ollie wrote back,stating that he had not agreed to the price of $2.50 per pound.Is Ollie bound to the confirmation?

Accepted Answer

Probably.Shrimp is a "good," and therefo

Question 19

The UCC does not apply to a contract for the sale of goods if the value of the goods is less than $500.

Accepted Answer

A) True 
 B)False

Question 20

Oxtren,Inc.is a tools wholesaler.Oxtren sent M&E Tools a purchase order offering to buy 200 Model 308 milling & drilling machines with R-8 spindles.The purchase order stated the credit term to be 2% discount if payment was made in 10 days,with the full amount due in 30 days.It did not include a forum selection clause.M&E responded with an acceptance form accepting the offer.The acceptance form,however,stated that full payment was due on delivery and that disputes under the contract would be settled by arbitration.
(A)Do the parties have an agreement?
(B)What is the payment term?
(C)Is the arbitration clause part of the agreement?

Accepted Answer

(A)Under the UCC,the parties will have a

Exam 19: Introduction to Sales

By definition,a sale under Article 2 of the UCC requires:

The UCC is federal legislation enacted by Congress.

To simplify,clarify,and modernize the law governing commercial transactions,the UCC permits the use of "open terms" in sales contracts.In the use of "open terms," which of the following is true?

Under the UCC statute of frauds,the writing for a sale of goods must:

Pizazz,Inc.leased the 34th floor in an office building in downtown Chicago.This contract is governed by Article 2A of the UCC.

A requirements contract is a contract:

Lian contracted for financial services from E-wise.This contract is governed by Article 2 of the UCC.

If Edmund and Kaylin have a writing mistakenly showing a sale and purchase of goods for $10,000 when the price should have been $1,000,a court will most likely:

Trey,a full-time college student,sold his car to Don,another student.In the performance of this contract,Trey:

In a "mixed contract," one involving a sale of both goods and services,the court will:

Elizabeth worked as a salesperson in a carpet store.She was in the midst of divorce proceedings and needed some money.Elizabeth sold her wedding ring.Elizabeth is considered a merchant with regard to the sale of the ring.

The UCC does not apply to a contract for the sale of goods if the value of the goods is less than $500.

Introduction to Law

Business Ethics and Social Responsibility

Dispute Resolution

Common Law, Statutory Law, and Administrative Law

Constitutional Law

Torts and Product Liability

Crime

International Law

Introduction to Contracts

Agreement

Consideration

Legality

Capacity and Consent

Written Contracts

Third parties

Performance and Discharge

Remedies

practical Contracts

Ownership and Warranties

Performance and Remedies

Negotiable Instruments

Secured Transactions

Bankruptcy

Agency

Employment and Labor Law

Employment and Discrimination

Starting a Business

Corporations

Government Regulations:Securities and Antitrust

Consumer Protection

Cyberlaw

Intellectual Property

Real and Personal Property

Filters