Exam 14: The Formation of Sales and Lease Contracts

A-1 Furnishings,Inc.,agrees to lease a desk to Business Resources,Inc.(BRI),which requests that the desk be left outside City Warehouse for BRI to pick up.Before BRI retrieves the desk,it is stolen.The loss is suf-fered by

Secure Courier,Inc.,has a requirements contract with Petro Distribution Corporation that obligates Petro to supply Secure with all the gasoline it needs for its delivery vehicles for one year at $2.30 per gallon.A clause inserted in small print in the contract by Secure,and not noticed by Petro,states,"The buyer reserves the right to reject any shipment for any reason without liability." For six months,Secure orders and Petro delivers under the contract without any controversy.Then,because of a war in the Middle East,the price of gasoline to Petro increases substantially.Petro tells Secure it cannot possibly fulfill their contract unless Secure agrees to pay $2.50 per gallon.Secure,in need of the gasoline,agrees in writing to modify the contract.Later that month,Secure learns it can buy gasoline at $2.40 per gallon from Refined Oil Company.Secure refuses delivery of its most recent order from Petro,claiming,first that the contract allows it to do so without liability,and second,that it is required to pay only $2.30 per gallon if it accepts the delivery.Discuss Secure's contentions.

If a seller is not a merchant,and the goods are not to be moved,the risk of loss passes to a buyer on tender of delivery.

Community Construction Corporation offers to buy from Solid Cement Company a certain quantity of cement for a certain price.Solid can ac-cept the offer by

If a nonmerchant-seller's offer expressly conditions acceptance on a nonmerchant-buyer's agreement to the terms of the offer,the buyer's positive response is an acceptance even if it contains additional terms.

Entrusting goods to a merchant who deals in goods of the kind gives the merchant the power to transfer all rights to a buyer in the ordinary course of business.

FlavorBean Coffee Company agrees to buy an unspecified quantity of coffee beans from Global AgriCorp.Global breaches the contract.In FlavorBean's suit to obtain relief,the court will most likely

If there is no definite period stated,a firm offer by a merchant is irrevocable without the necessity of consideration for up to six months.

Equipment Rental Corporation and Floodlights,Inc.,are parties to an oral agreement for a lease of goods with payments in excess of $10,000.They may satisfy the Statute of Frauds by

Motor Coach Corporation,a U.S.firm,orally agrees to sell six vehicles to National Tours,Ltd.,a Canadian firm.Motor Coach fails to deliver and National Tours sues to enforce the agreement.Under the CISG,National Tourscan prove the terms by

Under the UCC,parties to sales and lease contracts are not free to establish whatever terms they wish.

In a destination contract,the seller is required to deliver the goods to a particular destination.

Peter,an agent for Zippy Cars,Inc.,writes a letter to Cassandra on March 1 stating that he will sell her a 2011 Suburu Outback for $20,000 between March 1 and April 30.Peter's letter to Cassandra is

Roy's Chick'n Shack orders chicken from Standard Food Supplier,but Standard does not deliver.Roy's will probably be unable to enforce the agreement if the parties

Jackson owns an antiques store.He sells a grand piano to Fred for $5,000,a old jukebox to Sam for $499,an antebellum chest of drawers to Josephine for $659 and a gold ring to Wendy for $999.Which of Jackson's sales must be in writing to be enforceable?

Even if goods are not identified to the contract,the title and risk of loss can still pass from the seller to the buyer.

A contract between Fresh Fruit Corporation and Green Grocer,Inc.,re-quires Fresh Fruit to deliver goods to Green Grocer's place of business.This is

Article 2 of the UCC covers any transaction that creates a lease of goods.

A firm offer by a merchant may be oral.

Rita,the manager of the State University (SU) soccer team,orally agrees to lease a certain number of specially made SU banners from Top Banners,Inc.This lease is enforceable only if Top has made a substan-tial start on making the banners and