Question 1

Under Article 2 of the Uniform Commercial Code, which of the following statements illustrates a merchant?

Accepted Answer

A)  Theodora, a doctor, sells her phone to her friend. 
B)  Charles, a chef, sells his car to his neighbor. 
C)  Nick, an electronic goods dealer, contracts to sell laptops to another firm. 
D)  Annie, a teacher, contracts to sell her microwave and television to her friend, Iris. 
A)  Theodora, a doctor, sells her phone to her friend. 
B)  Charles, a chef, sells his car to his neighbor. 
C)  Nick, an electronic goods dealer, contracts to sell laptops to another firm. 
D)  Annie, a teacher, contracts to sell her microwave and television to her friend, Iris. C

Question 2

If the contract requires delivery of the goods by the seller, title passes to the buyer when the seller delivers the goods to the carrier.

Accepted Answer

A) True 
 B)False  False

Question 3

Which of the following statements is true for a sale on approval?

Accepted Answer

A)  Goods are delivered to the buyer primarily for resale. 
B)  Goods are delivered to the buyer primarily for the buyer's use. 
C)  The risk of loss and title pass to the buyer even before the buyer accepts the goods. 
D)  Any use of the goods that is consistent with a trial of goods is regarded as an acceptance by the buyer. 
A)  Goods are delivered to the buyer primarily for resale. 
B)  Goods are delivered to the buyer primarily for the buyer's use. 
C)  The risk of loss and title pass to the buyer even before the buyer accepts the goods. 
D)  Any use of the goods that is consistent with a trial of goods is regarded as an acceptance by the buyer. B

Question 4

Under the Uniform Commercial Code, if a contract is silent about the place of delivery, the goods are to be delivered:

Accepted Answer

A)  at the production site of the goods. 
B)  at the seller's place of business. 
C)  at the buyer's residence. 
D)  at any place the seller deems convenient. 
A)  at the production site of the goods. 
B)  at the seller's place of business. 
C)  at the buyer's residence. 
D)  at any place the seller deems convenient.

Question 5

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 6

Under the Uniform Commercial Code, which of the following statements is true for the identification of goods to the contract?

Accepted Answer

A)  It is applicable if delivery is to be made without moving the goods. 
B)  It occurs when the parties use a negotiable document of title when the goods are being shipped. 
C)  It does not result from the actions of the seller, such as setting aside or marking the goods. 
D)  It does not result from the contract description of the goods. 
A)  It is applicable if delivery is to be made without moving the goods. 
B)  It occurs when the parties use a negotiable document of title when the goods are being shipped. 
C)  It does not result from the actions of the seller, such as setting aside or marking the goods. 
D)  It does not result from the contract description of the goods.

Question 7

Ellie took her diamond ring to Portman Jewelers Corp. for routine cleaning. An employee at the store sold the ring to Daniel who was unaware that the ring belonged to Ellie. Which of the following statements is true in this case?

Accepted Answer

A)  Ellie can recover the ring from Daniel. 
B)  Ellie can sue the store for conversion, but cannot recover the ring from Daniel because he was a buyer in the ordinary course of business. 
C)  Ellie can recover the ring from the store under the Uniform Commercial Code's ownership principles because the service element is predominant in this case. 
D)  Ellie cannot sue the store because the store employee acted in good faith. 
A)  Ellie can recover the ring from Daniel. 
B)  Ellie can sue the store for conversion, but cannot recover the ring from Daniel because he was a buyer in the ordinary course of business. 
C)  Ellie can recover the ring from the store under the Uniform Commercial Code's ownership principles because the service element is predominant in this case. 
D)  Ellie cannot sue the store because the store employee acted in good faith.

Question 8

In a sale or return contract, goods are delivered to buyers primarily for:

Accepted Answer

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

Question 9

The Uniform Commercial Code requires the original owners of the goods to bear the burden of collecting from their fraudulent buyers.

Accepted Answer

A) True 
 B)False

Question 10

If the parties' contract calls for a number of performances over an indefinite period of time, the contract is valid for a reasonable period of time but may be terminated at any time by either party after giving reasonable notice.

Accepted Answer

A) True 
 B)False

Question 11

If delivery is to be made without moving the goods, title passes from the seller to the buyer at the time and place of contracting if the goods have been identified to the contract.

Accepted Answer

A) True 
 B)False

Question 12

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 13

The law of sales of goods is codified in Article 3(A) of the Uniform Contracts Code.

Accepted Answer

A) True 
 B)False

Question 14

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

Question 15

When, at the time of contracting, the goods are in the hands of a third-party bailee and are covered by a document of title, the risk passes to the buyer when he or she:

Accepted Answer

A)  takes possession of the goods. 
B)  receives the document of title. 
C)  acknowledges the third-party bailee's right to possession. 
D)  indulges in a breach of contract. 
A)  takes possession of the goods. 
B)  receives the document of title. 
C)  acknowledges the third-party bailee's right to possession. 
D)  indulges in a breach of contract.

Question 16

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 17

Which of the following statements is true of a negotiable document of title?

Accepted Answer

A)  It serves as a contract between the seller and the shipper. 
B)  It is given to a buyer before he or she makes the payment for the goods. 
C)  It does not identify who has control of the goods. 
D)  It is used when a buyer rejects the goods delivered. 
A)  It serves as a contract between the seller and the shipper. 
B)  It is given to a buyer before he or she makes the payment for the goods. 
C)  It does not identify who has control of the goods. 
D)  It is used when a buyer rejects the goods delivered.

Question 18

When a contract appears to call for the furnishing of both goods and services, the common law automatically applies to the transaction.

Accepted Answer

A) True 
 B)False

Question 19

Explain what output and requirements contracts are.
In some cases, the parties may state the quantity of goods covered by their sales contract in an indefinite way. Contracts that obligate a buyer to purchase a seller's output of a certain item or all the buyer's requirements of a certain item are commonly encountered. These contracts caused frequent problems under the common law because of the indefiniteness of the parties' obligations. If the seller decided to double its output, did the buyer have to accept the entire amount? If the market price of the item soared much higher than the contract price, could the buyer double or triple its demands?

Accepted Answer

The Uniform Commercial Code (UCC) limits

Question 20

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

Accepted Answer

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

Exam 19: Formation and Terms of Sales Contracts

Under Article 2 of the Uniform Commercial Code, which of the following statements illustrates a merchant?

If the contract requires delivery of the goods by the seller, title passes to the buyer when the seller delivers the goods to the carrier.

Which of the following statements is true for a sale on approval?

Under the Uniform Commercial Code, if a contract is silent about the place of delivery, the goods are to be delivered:

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

Under the Uniform Commercial Code, which of the following statements is true for the identification of goods to the contract?

Ellie took her diamond ring to Portman Jewelers Corp. for routine cleaning. An employee at the store sold the ring to Daniel who was unaware that the ring belonged to Ellie. Which of the following statements is true in this case?

In a sale or return contract, goods are delivered to buyers primarily for:

The Uniform Commercial Code requires the original owners of the goods to bear the burden of collecting from their fraudulent buyers.

If the parties' contract calls for a number of performances over an indefinite period of time, the contract is valid for a reasonable period of time but may be terminated at any time by either party after giving reasonable notice.

If delivery is to be made without moving the goods, title passes from the seller to the buyer at the time and place of contracting if the goods have been identified to the contract.

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

The law of sales of goods is codified in Article 3(A) of the Uniform Contracts Code.

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.

When, at the time of contracting, the goods are in the hands of a third-party bailee and are covered by a document of title, the risk passes to the buyer when he or she:

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

Which of the following statements is true of a negotiable document of title?

When a contract appears to call for the furnishing of both goods and services, the common law automatically applies to the transaction.

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

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 Property

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 Remedies

Warranties and Product Liability

Performance of Sales Contracts

Remedies for Breach of Sales Contracts

The Agency Relationship-Creation, Duties, and Termination

Liability of Principals and Agents to Third Parties

Employment Laws

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 Accountants

Personal Property and Bailments

Real Property

Landlord and Tenant

Estates and Trusts

Insurance

Negotiable Instruments

Negotiation and Holder in Due Course

Liability of Parties

Checks and Electronic Fund Transfers

Introduction to Security

Security Interests in Personal Property

Bankruptcy

The Antitrust Laws

Consumer Protection Laws

Environmental Regulation

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