Deck 17: Introduction to Sales and Leases

Question 1

A "firm offer" under Article 2 or 2A can be made by any seller of goods.

Answer 1

False

Question 2

A consumer lease is used when a lessor leases goods to an individual, primarily for personal, family, or household purposes, where total lease payments are less than $25,000.

Answer 2

True

Question 3

Under the Code, as at common law, consideration is necessary to modify the terms of a contract.

Answer 3

False

Question 4

Under the Uniform Commercial Code, a contract that fails to specify price or a means of accurately ascertaining price will almost always fail.

Question 5

When a salesperson says, "Don't worry about all that little type on the back of this form," it is an example of substantive unconscionability.

Question 6

Under the Uniform Commercial Code, a contractual obligation will never arise when the agreement has open terms.

Question 7

Robert rented a floor sander from a hardware store to refinish his living room floor. This is a "finance lease" under the Code.

Question 8

The common law has a Statute of Frauds, and so does the UCC.

Question 9

The Code specifically defines what is an "unconscionable contract."

Question 10

Most of the Code's rules are not mandatory; rather the parties to the agreement may change or displace them.

Question 11

Although the UCC comprehensively covers commercial transactions, it does not deal with every aspect of commercial law.

Question 12

A "contract" for a gift of goods is enforceable under the Uniform Commercial Code.

Question 13

A merchant can only be defined in terms of an individual person.

Question 14

The lessor is the one who transfers the right to possession to the lessee.

Question 15

There is a significant difference between the common law and the Uniform Commercial Code on issues of duress, misrepresentation, undue influence, or mistake.

Question 16

Louisiana is the only state to not have enacted Article 2 of the Uniform Commercial Code in its entirety.

Question 17

The Uniform Commercial Code will not govern if the contract calls for the seller to sever crops, timber, or minerals from mining..

Question 18

The Uniform Commercial Code assumes that rules applicable to professionals ought to apply to the inexperienced buyer or seller also.

Question 19

At common law, where the "mirror image rule" reigns, if the acceptance differs from the offer, no contract results, but under the Code an acceptance varying from the offer may be good.

Question 20

The Code displaces all common-law rules with its own rules.

Question 21

The common-law "mirror image" rule is inapplicable under the Code.

Question 22

Janice took possession of a sailboat from SeaShore Boat Rentals. She paid a security deposit before using the boat and is to pay the balance when she returns it. This is an example of a _____.

A) lease
B) sale
C) gift
D) bailment
E) debt relief

Question 23

Which of the following is true for common law and the Uniform Commercial Code (UCC)?

A) The UCC requires consideration for a "firm offer" while common law does not.
B) There is a vast difference between common law and the UCC on issues of duress.
C) Unlike the UCC, in common law, an offer can be revoked at any time prior to acceptance unless the offeror has given the offeree an option.
D) The UCC and common law require consideration to modify a contract.
E) The common law and the UCC have a Statute of Frauds.

Question 24

Which of the following is a provision of obligation of good-faith dealings under Section 1-203 of the Uniform Commercial Code (UCC)?

A) Consideration is required for modification of a sales contract made in good faith.
B) In determining the intent a reasonable person would have had, due consideration is to be given to any practices which the parties have established between themselves.
C) Every contract or duty within this Act imposes an obligation of good faith in its performance or enforcement.
D) If the court finds the contract to have been unconscionable at the time it was made, the court may refuse to enforce the contract.
E) A proposal for concluding a contract addressed to one or more specific persons constitutes an offer if it is sufficiently definite and indicates the intention of the offeror.

Question 25

A _____ is the transfer of possession but not title or use.

A) sale
B) secured transaction
C) gift
D) lease
E) bailment

Question 26

Mr. Russell buys a watch for his granddaughter and gives it to her on the day she graduates. He does not expect anything in return. This is an example of a _____.

A) gift
B) bailment
C) sale
D) lease
E) secured transaction

Question 27

A(n) _____ lease is used when a lessor buys or obtains goods from a supplier for the purpose of leasing them to a commercial lessee.

A) consumer
B) finance
C) operating
D) leveraged
E) novated

Question 28

The Uniform Commercial Code defines a lease as _____.

A) that which is movable at the time of identification to the contract for sale other than the money in which the price is to be paid
B) a transfer of the right to possession and use of goods for a term in return for consideration
C) a transaction in which the owner-debtor gives a security interest in collateral to a creditor
D) a transfer of possession but not title or use
E) a transfer of title without consideration

Question 29

Which of the following subjects is covered under the Uniform Commercial Code?

A) Sale of real property
B) Mortgages
C) Letters of credit
D) Insurance contracts
E) Bankruptcy

Question 30

Under the Code, "open terms"-such as no quantity of goods, or no price for the goods-can be "plugged" to create an enforceable agreement.

Question 31

Newman borrows his neighbor's lawn mower for the season. This is an example of a _____.

A) gift
B) lease
C) secured transaction
D) bailment
E) sale

Question 32

A gift is _____.

A) the rightful possession of goods by one not their owner
B) the transfer of title without consideration
C) a mortgage on personal property in case the debtor-owner defaults
D) the reassignment of right of possession and use for a price
E) an arrangement whereby the lessee comes to own the leased goods

Question 33

In a _____, the owner-debtor gives a security interest in collateral to a creditor that allows the creditor to repossess the collateral if the owner defaults.

A) bailment
B) gift
C) secured transaction
D) lease
E) sale

Question 34

Julia, planning to move, sells many of her household items at a garage sale. Article 2 does not apply here.

Question 35

Under common law, consideration is _____.

A) required to discharge a breaching party
B) not required for modification of a sales contract made in good faith
C) not required if one party wants to forgive another's breach by written waiver
D) not required for a "firm offer"
E) required if a contract is modified or terminated by the mere agreement of the parties

Question 36

Under common law, _____.

A) a contractual obligation may arise even if the agreement has open terms
B) an offer can be revoked at any time prior to acceptance unless the offeror has given the offeree an option
C) if the acceptance is the same as the offer, no contract results
D) there is no consideration if one party wants to forgive another's breach by written waiver or renunciation signed and delivered by the aggrieved party
E) no written agreement is required to discharge a breaching party

Question 37

When a consumer purchases a car on credit, it is an example of a _____.

A) sale
B) secured transaction
C) lease
D) gift
E) bailment

Question 38

Able and Baker, two California residents, could not choose to have the CISG govern their contract for the sale of goods between them within California.

Question 39

If an agreement for the sale of goods does not satisfy the Code's statute of frauds, the agreement is void.

Question 40

Under the Uniform Commercial Code of offer and acceptance as a contract issue, _____.

A) merchants should be held to particular standards because they are more experienced
B) an offer can be revoked at any time prior to acceptance unless the offeror has given the offeree an option
C) if the acceptance differs from the offer, no contract results
D) a contractual obligation may arise even if the agreement has open terms
E) a contract that fails to specify price or a means of accurately ascertaining price will almost always fail

Question 41

According to the Uniform Commercial Code (UCC), what is a lease? What are the two types of leases?

Question 42

Pauline's Print Mart (PPM) discussed with Martin Mason printing up elegant brochures advertising Mason's business, at a price of $700. Mason took possession of about 500 brochures; then, pressed by a big national competitor, he quit that business. He then refused to pay for the 1000 brochures still stored in boxes at PPM, denying he had ordered any more than the 500 he'd taken. As to the remaining 1000 brochures . . .

A) Mason will win: the relevant statute of frauds requires contracts in excess of $500 to be evidenced by a writing.
B) Mason will win: the parol evidence rule precludes admission of contemporaneous oral agreements that alter the terms of otherwise unambiguous written contracts.
C) Moderate
C) Mason will win: the brochures were printed by normal printing mechanisms, nothing special.
D) Mason will win because under Article 2 if a person accepts goods, he admits a contract for that much.

Question 43

A clause in a finance lease requiring the lessee to continue to make payments to the lessor even though the equipment leased is unsuitable, defective, or destroyed is c__________ clause.

A) unwitting
B) salutary
C) Moderate
C) hell or high water
D) flying pigs

Question 44

Define a sale. Are gifts and bailment the same as making a sale? Explain.

Question 45

Jill went to Harry's Hair Salon to get a permanent wave; the lotion Harry applied to Jill's hair burned her scalp. The test to determine whether the common law or Article 2 applies here__________ test.

A) substantial performance
B) main purpose doctrine
C) Moderate
C) predominate factor
D) part performance

Question 46

Colleen telephoned an off-campus computer store and ordered five flash drives at $10 apiece. Later that day she observed that they were a very good buy; she called the store the next day to order 60 of them (for resale to her dorm-mates at a slight profit). Which is true?

A) The modification is void for lack of consideration.
B) The modified agreement is unenforceable.
B) Moderate
C) The changed agreement is entirely enforceable.
D) The modified contract is void.