Question 1

When a sales contract as a whole is unconscionable,the courts do not have the right to refuse to enforce the contract.

Accepted Answer

A) True 
 B)False

Question 2

Adam offered to buy automobile batteries from Ben.Adam's purchase order was complete with respect to all material terms except price,which was omitted.If Ben accepts Adam's offer,and the price of automobile batteries is well established in the industry,which of the following statements is true?

Accepted Answer

A)  A contract cannot be formed between Adam and Ben if the price is not included. 
B)  A contract can be formed between Adam and Ben only if it can be proved that the parties intended to enter a contract to discuss the price. 
C)  A contract can be formed between Adam and Ben, but the price will be treated as a proposed addition to the contract which must be accepted by both parties. 
D)  A contract can be formed between Adam and Ben even though the price term was omitted. 
A)  A contract cannot be formed between Adam and Ben if the price is not included. 
B)  A contract can be formed between Adam and Ben only if it can be proved that the parties intended to enter a contract to discuss the price. 
C)  A contract can be formed between Adam and Ben, but the price will be treated as a proposed addition to the contract which must be accepted by both parties. 
D)  A contract can be formed between Adam and Ben even though the price term was omitted.

Question 3

Beck Inc.,a food processing company in Chicago,placed a phone order with Gary,a vineyard owner in California,for a certain quantity of perishable products.The shipping term was "CIF" with payment to be made on delivery.Gary contracted with a carrier to deliver the goods to Beck Inc.However,he neglected to ship the goods under refrigeration.The goods were loaded on a non-refrigerated boxcar and as a result the product was spoiled when it reached Chicago.Under these circumstances,_____.

Accepted Answer

A)  neither Gary nor Beck Inc. bears the risk of loss as the goods are insured 
B)  Beck Inc. bears the risk of loss because, under a CIF shipment, the buyer has to bear all risks 
C)  Beck Inc. bears the risk of loss as the contract did not mention that Gary will guarantee their delivery 
D)  Gary bears the risk of loss because, under a CIF shipment, the seller bears the expense and the risk of loading the goods 
A)  neither Gary nor Beck Inc. bears the risk of loss as the goods are insured 
B)  Beck Inc. bears the risk of loss because, under a CIF shipment, the buyer has to bear all risks 
C)  Beck Inc. bears the risk of loss as the contract did not mention that Gary will guarantee their delivery 
D)  Gary bears the risk of loss because, under a CIF shipment, the seller bears the expense and the risk of loading the goods

Question 4

If a contract merely requires the seller to ship the goods,title passes to the buyer when:

Accepted Answer

A)  the buyer pays the seller. 
B)  the contract is signed by both parties. 
C)  the goods are delivered by the seller to the buyer. 
D)  the seller delivers the goods to the carrier. 
A)  the buyer pays the seller. 
B)  the contract is signed by both parties. 
C)  the goods are delivered by the seller to the buyer. 
D)  the seller delivers the goods to the carrier.

Question 5

The Uniform Commercial Code distinguishes between merchants and nonmerchants by holding nonmerchants to a higher standard in all cases.

Accepted Answer

A) True 
 B)False

Question 6

A buyer has a retail store in Florida and the seller is a manufacturer in California.If the buyer orders goods from the seller and the goods are shipped "FOB Florida," which of the following statements is true?

Accepted Answer

A)  The seller bears the expense and risk of delivering the goods to Florida. 
B)  Neither the seller nor the buyer bears the risk of delivering the goods as the goods are insured. 
C)  The seller is allowed to charge a nominal fee for delivering the goods. 
D)  The buyer bears the risk of loss as he is responsible for taking possession of the goods. 
A)  The seller bears the expense and risk of delivering the goods to Florida. 
B)  Neither the seller nor the buyer bears the risk of delivering the goods as the goods are insured. 
C)  The seller is allowed to charge a nominal fee for delivering the goods. 
D)  The buyer bears the risk of loss as he is responsible for taking possession of the goods.

Question 7

Which of the following statements should be governed by Article 2 of the Uniform Commercial Code?

Accepted Answer

A)  Andrew agreed to decorate the interiors of Jamie's house. 
B)  Barney leased his house to Mick for conducting business. 
C)  Bill contracted to sell 100 boxes of chocolates to a supermarket. 
D)  Monica contracted to sing with her group at Nancy's wedding. 
A)  Andrew agreed to decorate the interiors of Jamie's house. 
B)  Barney leased his house to Mick for conducting business. 
C)  Bill contracted to sell 100 boxes of chocolates to a supermarket. 
D)  Monica contracted to sing with her group at Nancy's wedding.

Question 8

Which of the following statements is true of voidable title?

Accepted Answer

A)  Sellers may obtain voidable title by paying for goods sold on a "cash sale" basis. 
B)  Sellers may obtain voidable title by paying for the goods with a good check. 
C)  Sellers may obtain voidable title by impersonating another person when acquiring the goods from their rightful owner. 
D)  Sellers may obtain voidable title by obtaining the goods without using fraudulent means. 
A)  Sellers may obtain voidable title by paying for goods sold on a "cash sale" basis. 
B)  Sellers may obtain voidable title by paying for the goods with a good check. 
C)  Sellers may obtain voidable title by impersonating another person when acquiring the goods from their rightful owner. 
D)  Sellers may obtain voidable title by obtaining the goods without using fraudulent means.

Question 9

Briefly explain the exception made by the Uniform Commercial Code concerning buyers in the ordinary course of business.

Accepted Answer

A "buyer in the ordinary course of busin

Question 10

Article 2A of the Uniform Commercial Code deals exclusively with leases of goods.

Accepted Answer

A) True 
 B)False

Question 11

Under the Uniform Commercial Code,a buyer in the ordinary course of business:

Accepted Answer

A)  takes goods free of any security interest in the goods that his or her seller may have given a third party. 
B)  is a person who transacts only with nonmerchants. 
C)  does not act in good faith. 
D)  is one who buys goods from a merchant, knowing that the sale violates the ownership rights of a third party. 
A)  takes goods free of any security interest in the goods that his or her seller may have given a third party. 
B)  is a person who transacts only with nonmerchants. 
C)  does not act in good faith. 
D)  is one who buys goods from a merchant, knowing that the sale violates the ownership rights of a third party.

Question 12

Which of the following terms is closely related to destination contracts?

Accepted Answer

A)  CIF (cost, insurance, and freight) 
B)  FAS (free alongside) 
C)  Ex-ship 
D)  C&F (cost and freight) 
A)  CIF (cost, insurance, and freight) 
B)  FAS (free alongside) 
C)  Ex-ship 
D)  C&F (cost and freight)

Question 13

In a return contract,goods are delivered to buyers:

Accepted Answer

A)  primarily for personal use. 
B)  primarily for resale. 
C)  primarily for trial. 
D)  primarily for security. 
A)  primarily for personal use. 
B)  primarily for resale. 
C)  primarily for trial. 
D)  primarily for security.

Question 14

Anyone who entrusts goods to a merchant who regularly deals in such goods gives that merchant the power to give good title to a buyer in the ordinary course of business.

Accepted Answer

A) True 
 B)False

Question 15

Sales on approval are primarily _____ transactions.

Accepted Answer

A)  seller 
B)  merchant 
C)  consumer 
D)  nonmerchant 
A)  seller 
B)  merchant 
C)  consumer 
D)  nonmerchant

Question 16

Jane gave her car for maintenance to Bell Corp.,a company that deals in used cars and maintenance of cars.One of the employees at Bell Corp.accidentally sold Jane's car to Fiona.Under these circumstances,which of the following statements is correct?

Accepted Answer

A)  Jane cannot recover the car from Fiona because under the Uniform Commercial Code, Bell Corp. could give good title to a buyer in the ordinary course of business. 
B)  Jane can recover the car from Fiona because Bell Corp. did not have ownership to the car when it was sold to Fiona. 
C)  Jane can recover the value of the car from Fiona or Bell Corp. because neither Bell Corp. nor Fiona had title to the car. 
D)  Jane cannot recover the value of the car from Bell Corp. because she is a nonmerchant. 
A)  Jane cannot recover the car from Fiona because under the Uniform Commercial Code, Bell Corp. could give good title to a buyer in the ordinary course of business. 
B)  Jane can recover the car from Fiona because Bell Corp. did not have ownership to the car when it was sold to Fiona. 
C)  Jane can recover the value of the car from Fiona or Bell Corp. because neither Bell Corp. nor Fiona had title to the car. 
D)  Jane cannot recover the value of the car from Bell Corp. because she is a nonmerchant.

Question 17

Jessica went to Angel Beauty Salon to get a facial.The cosmetic products used by the beautician contained certain harmful chemicals that reacted with Jessica's face.This resulted in several rashes and spots on her face.Which of the following statements is true of Article 2 of the Uniform Commercial Code in determining the rights and responsibilities of the parties?

Accepted Answer

A)  Article 2 of the Uniform Commercial Code would not apply because Jessica entered into a contract which was predominantly a service contract. 
B)  Article 2 of the Uniform Commercial Code would not apply because Jessica is not a merchant. 
C)  Article 2 of the Uniform Commercial Code would apply because any contract involving the use of cosmetic products is governed by the Code. 
D)  Article 2 of the Uniform Commercial Code would apply because the cosmetic products are not Jessica's tangible personal property. 
A)  Article 2 of the Uniform Commercial Code would not apply because Jessica entered into a contract which was predominantly a service contract. 
B)  Article 2 of the Uniform Commercial Code would not apply because Jessica is not a merchant. 
C)  Article 2 of the Uniform Commercial Code would apply because any contract involving the use of cosmetic products is governed by the Code. 
D)  Article 2 of the Uniform Commercial Code would apply because the cosmetic products are not Jessica's tangible personal property.

Question 18

Which of the following statements is true of a lease?

Accepted Answer

A)  It is a transfer of the ownership of goods from one merchant to another. 
B)  It is a transfer of the right to possess and use goods belonging to another. 
C)  It is governed exclusively by Article 2 and Article 9 of the Uniform Commercial Code. 
D)  It is governed by the same principles of common law that predominantly govern the sale of goods. 
A)  It is a transfer of the ownership of goods from one merchant to another. 
B)  It is a transfer of the right to possess and use goods belonging to another. 
C)  It is governed exclusively by Article 2 and Article 9 of the Uniform Commercial Code. 
D)  It is governed by the same principles of common law that predominantly govern the sale of goods.

Question 19

Patty buys a Persian rug from James,a plumber,in an online auction.James called Patty on Wednesday to inform her that she submitted the winning bid and that he would ship the rug to her on Friday.On Thursday,the rug was destroyed in a garage fire at James' house.Which of the following statements is true in this case?

Accepted Answer

A)  James bears the loss as he has not delivered the goods. 
B)  James bears the loss as he has tendered delivery of goods. 
C)  Patty bears the loss as James is not a merchant. 
D)  Patty bears the loss as James was only providing a service. 
A)  James bears the loss as he has not delivered the goods. 
B)  James bears the loss as he has tendered delivery of goods. 
C)  Patty bears the loss as James is not a merchant. 
D)  Patty bears the loss as James was only providing a service.

Question 20

In a sale or return contract,the goods are delivered to the buyer primarily for resale with the understanding that the buyer has the right to return them.

Accepted Answer

A) True 
 B)False

Exam 19: Formation and Terms of Sales Contracts

When a sales contract as a whole is unconscionable,the courts do not have the right to refuse to enforce the contract.

Adam offered to buy automobile batteries from Ben.Adam's purchase order was complete with respect to all material terms except price,which was omitted.If Ben accepts Adam's offer,and the price of automobile batteries is well established in the industry,which of the following statements is true?

If a contract merely requires the seller to ship the goods,title passes to the buyer when:

The Uniform Commercial Code distinguishes between merchants and nonmerchants by holding nonmerchants to a higher standard in all cases.

A buyer has a retail store in Florida and the seller is a manufacturer in California.If the buyer orders goods from the seller and the goods are shipped "FOB Florida," which of the following statements is true?

Which of the following statements should be governed by Article 2 of the Uniform Commercial Code?

Which of the following statements is true of voidable title?

Briefly explain the exception made by the Uniform Commercial Code concerning buyers in the ordinary course of business.

Article 2A of the Uniform Commercial Code deals exclusively with leases of goods.

Under the Uniform Commercial Code,a buyer in the ordinary course of business:

Which of the following terms is closely related to destination contracts?

In a return contract,goods are delivered to buyers:

Anyone who entrusts goods to a merchant who regularly deals in such goods gives that merchant the power to give good title to a buyer in the ordinary course of business.

Sales on approval are primarily _____ transactions.

Jane gave her car for maintenance to Bell Corp.,a company that deals in used cars and maintenance of cars.One of the employees at Bell Corp.accidentally sold Jane's car to Fiona.Under these circumstances,which of the following statements is correct?

Which of the following statements is true of a lease?

In a sale or return contract,the goods are delivered to the buyer primarily for resale with the understanding that the buyer has the right to return them.

Law, Legal Reasoning, and the Legal Profession

Dispute Settlement

Business Ethics and Corporate Social Responsibility

Business and the Constitution

Crimes

Intentional Torts

Negligence and Strict Liability

Licensing and Intellectual Propertypart Two Contracts

The Nature and Origins of Contracts

Creating a Contract: Offers

Creating a Contract: Acceptances

Consideration

Capacity to Contract

Voluntary Consent

Illegality

The Form and Meaning of Contracts

Third Parties Contract Rights

Performance and Remediespart Three Sales

Warranties and Product Liability

Performance of Sales Contracts

Remedies for Breach of Sales Contractspart Four Agency and Employment

The Agency Relationship-Creation, duties, and Termination

Liability of Principals and Agents to Third Parties

Employment Laws-Part Five Business Organizations

Which Form of Business Organization

Partnerships

Formation and Termination of Corporations

Management of the Corporate Business

Financing the Corporation and the Role of the Shareholders

Securities Regulation

Legal Liability of Accountantspart Six Property

Personal Property and Bailments

Real Property

Landlord and Tenant

Estates and Trusts

Insurance-Part Seven Commercial Paper

Negotiable Instruments

Negotiation and Holder in Due Course

Liability of Parties

Checks and Electronic Fund Transfers-Part Eight Credit Transactions

Introduction to Security

Security Interests in Personal Property

Bankruptcy-Part Nine Government Regulation

The Antitrust Laws

Consumer Protection Laws

Environmental Regulation

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