Question 1

Which of the following is an example of an irrevocable offer?

Accepted Answer

A)  counteroffer 
B)  gift promise 
C)  option contract 
D)  accommodation

Question 2

The UCC provides that a contract is created when the offeror receives the acceptance.

Accepted Answer

A) True 
 B)False

Question 3

Miranda Airways,a commercial air carrier,has a contract with Wurtherton Inc.,an airplane manufacturer,to purchase a new plane.Due to a sudden shortage of cash,Miranda Airways goes to MetrosBank.MetrosBank issues a document to Wurtherton that if Miranda does not pay for the transaction,MetrosBank would.Wurtherton considers the offer,and then sends an acceptance with additional terms.The additional terms stipulates that Miranda Airways could have the new airplane for a period of 10 years,and then return it to Wurtherton.Miranda Airways agrees to the acceptance,and Wurtherton hands the new airplane over to them.Which of the following documents did MetrosBank issue to Wurtherton to help Miranda Airways secure the airplane?

Accepted Answer

A)  a bill of exchange 
B)  a pro forma invoice 
C)  a letter of credit 
D)  a remittance advice

Question 4

An oral sales or lease contract that should otherwise be in writing is enforceable to the extent to which the goods have been received and accepted by the buyer or lessee.

Accepted Answer

A) True 
 B)False

Question 5

If the parties to a contract do not agree to a place of delivery during the time of contracting but know that the goods are located at some other place,then the place of delivery is the seller's place of business.

Accepted Answer

A) True 
 B)False

Question 6

A shipment that is offered to a buyer as a replacement for the original shipment when the original shipment cannot be filled is referred to as a(n)________.

Accepted Answer

A)  consideration 
B)  accommodation 
C)  surrogate 
D)  open delivery

Question 7

A ________ is a transfer of the right to the possession and use of named goods for a set term in return for certain consideration.

Accepted Answer

A)  trade 
B)  gift 
C)  lease 
D)  sale

Question 8

Article 2 of the UCC generally applies to all sales contracts irrespective of the involvement of merchants.

Accepted Answer

A) True 
 B)False

Question 9

Two merchants exchange contract forms with each containing additional terms favorable to the drafter.Can the additional terms be accepted as part of the contract? Are there any exceptions to accepting the additional terms?

Accepted Answer

The answer of Two merchants exchange contract forms with each...

Question 10

A lease transaction can involve a supplier apart from the lessor and lessee.

Accepted Answer

A) True 
 B)False

Question 11

A person who transfers the right of possession and use of goods under a lease is known as the ________.

Accepted Answer

A)  lessor 
B)  lessee 
C)  seller 
D)  consignee

Question 12

The UCC provides that an acceptance of goods occurs if a buyer fails to reject the goods within a reasonable time after the delivery.

Accepted Answer

A) True 
 B)False

Question 13

Article 2 (Sales)and Article 2A (Leases)of the ________ are intended to provide clear,easy-to-apply rules that place the risk of loss of the goods on the party most able to either bear the risk or insure against it.

Accepted Answer

A)  Law Merchant 
B)  Uniform Sales Act 
C)  Uniform Commercial Code 
D)  common law

Question 14

When is the course of performance considered in a written contract?

Accepted Answer

A)  when oral modification is required for a written contract 
B)  when a sale or lease contract is not evidenced by writing 
C)  when the express terms of a written contract are not clear 
D)  when there is a prior oral or written agreement statement contradicting the written agreement

Question 15

Parris Boutique and the New Line Clothes Company decide to lease a new property of Green Floor Builders for their joint venture.To finance the acquisition,they go to a local bank.The bank purchases the property from Green Floor and leases it to the firms.In this case,________ is the supplier of the lease.

Accepted Answer

A)  Green Floor Builders 
B)  the New Line Clothes Company 
C)  Parris Boutique 
D)  the bank

Question 16

Under the UCC,if the time,place,and manner of delivery of goods are not mentioned in a contract,________.

Accepted Answer

A)  the place of delivery is the buyer's place of business 
B)  the contract is void for lack of definiteness 
C)  the place of delivery is the seller's place of business 
D)  the seller is obligated to pay for shipping to the buyer's place of business

Question 17

Which of the following is the correct order of prioritizing the external sources used to interpret the terms of a written contract?

Accepted Answer

A)  course of dealing, usage of trade, and course of performance 
B)  usage of trade, course of performance, and course of dealing 
C)  course of performance, course of dealing, and usage of trade 
D)  course of dealing, course of performance, and usage of trade

Question 18

Subjects that are severable from real estate may be classified as goods subject to Article 2 of the UCC.

Accepted Answer

A) True 
 B)False

Question 19

Miranda Airways,a commercial air carrier,has a contract with Wurtherton,Inc.,an airplane manufacturer,to purchase a new plane.Due to a sudden shortage of cash,Miranda Airways goes to MetrosBank.MetrosBank issues a document to Wurtherton that if Miranda does not pay for the transaction,MetrosBank would.Wurtherton considers the offer,and then sends an acceptance with additional terms.The additional terms stipulates that Miranda Airways could have the new airplane for a period of 10 years,and then return it to Wurtherton.Miranda Airways agrees to the acceptance,and Wurtherton hands the new airplane over to them.What UCC rule was applied when Miranda Airways agreed to the additional terms acceptance provided by Wurtherton?

Accepted Answer

A)  firm offer rule 
B)  mirror image rule 
C)  battle of the forms rule 
D)  gap-filling rule

Question 20

Explain with an example a transaction where the lessor does not manufacture,select,or supply the goods,but acquires title to the goods?

Accepted Answer

The answer of Explain with an example a transaction where...

Exam 16: Formation of Sales and Lease Contracts

Which of the following is an example of an irrevocable offer?

The UCC provides that a contract is created when the offeror receives the acceptance.

An oral sales or lease contract that should otherwise be in writing is enforceable to the extent to which the goods have been received and accepted by the buyer or lessee.

If the parties to a contract do not agree to a place of delivery during the time of contracting but know that the goods are located at some other place,then the place of delivery is the seller's place of business.

A shipment that is offered to a buyer as a replacement for the original shipment when the original shipment cannot be filled is referred to as a(n) ________.

A ________ is a transfer of the right to the possession and use of named goods for a set term in return for certain consideration.

Article 2 of the UCC generally applies to all sales contracts irrespective of the involvement of merchants.

Two merchants exchange contract forms with each containing additional terms favorable to the drafter.Can the additional terms be accepted as part of the contract? Are there any exceptions to accepting the additional terms?

A lease transaction can involve a supplier apart from the lessor and lessee.

A person who transfers the right of possession and use of goods under a lease is known as the ________.

The UCC provides that an acceptance of goods occurs if a buyer fails to reject the goods within a reasonable time after the delivery.

Article 2 (Sales) and Article 2A (Leases) of the ________ are intended to provide clear,easy-to-apply rules that place the risk of loss of the goods on the party most able to either bear the risk or insure against it.

When is the course of performance considered in a written contract?

Under the UCC,if the time,place,and manner of delivery of goods are not mentioned in a contract,________.

Which of the following is the correct order of prioritizing the external sources used to interpret the terms of a written contract?

Subjects that are severable from real estate may be classified as goods subject to Article 2 of the UCC.

Explain with an example a transaction where the lessor does not manufacture,select,or supply the goods,but acquires title to the goods?