Question 1

The CISG governs only the formation of the contract of sales and the rights and obligations of the seller and buyer. It does not cover the validity of the contract or any of its provisions.

Accepted Answer

The CISG (United Nations Convention on Contracts for the International Sale of Goods) specifically excludes issues of validity of the contract or any of its provisions from its scope, focusing instead on the formation of contracts of sale and the rights and obligations of the seller and buyer.

Question 2

A "merchant" is defined as a person who:
A) is a dealer in a particular type of goods.
B) by his occupation holds himself out as having knowledge or skills peculiar to certain goods or practices.
C) employs an agent or broker whom he holds out as having such knowledge or skill.
D) All of these define a merchant.

Accepted Answer

All of these options correctly define a merchant. A merchant can be a dealer in specific goods, someone who by their profession claims to have special knowledge or skills related to certain goods or practices, or someone who employs an agent or broker with such knowledge or skills.

Question 3

The definition of "usage of trade" includes:
A) a sequence of previous conduct between the parties that may fairly be regarded as establishing a common basis of understanding for interpreting their expressions and agreement.
B) a practice regularly observed and followed in a place, vocation, or trade.
C) separation rules that apply to transactions between merchants.
D) jargon or language that is particular to the trade of the parties to the contract.

Accepted Answer

"Usage of trade" refers to a practice or method of dealing that is regularly observed and followed in a particular place, vocation, or trade, which can help interpret or give meaning to the terms of an agreement.

Question 4

In the case of Pittsley v. Houser, the court:
A) held that the contract should be severed into different parts, applying the UCC to the part of the contract involving goods and the common law to the services part of the contract.
B) held that the "predominant factor" test contravened the UCC's declared purpose.
C) found the "predominant factor" test was the better, more prudent rule.
D) found the CISG governed the contract in question.

Accepted Answer

In Pittsley v. Houser, the court found the "predominant factor" test to be the better, more prudent rule for determining whether a contract is primarily for goods or services, which in turn decides if the Uniform Commercial Code (UCC) applies. This test helps in distinguishing whether a contract's primary nature is for the sale of goods or the provision of services, thereby determining the applicable law.

Question 5

The Code provides that its remedies shall be liberally administered to place the aggrieved party in a position as good as the one she would have occupied had the defaulting party fully performed.

Accepted Answer

The Code of Federal Regulations provides that remedies under the code should be liberally administered to put the aggrieved party in a position as good as the one she would have occupied had the defaulting party fully performed.

Question 6

Edie telephoned the office supply store and agreed to buy a dozen ink cartridges at $26 each. She then realized what a good buy this was and called the store with a request to modify the contract to read two dozen. What is the consequence?
A) The modified contract is unenforceable.
B) The modified contract is void.
C) The modified contract is valid and enforceable.
D) There is no consideration, so the contract is void.

Accepted Answer

The answer of Edie telephoned the office supply store and...

Question 7

Leases of personal property exceed $100 billion annually and are governed by Article 2A of the UCC.

Accepted Answer

Leases of personal property do indeed exceed $100 billion annually, and they are governed by Article 2A of the Uniform Commercial Code (UCC), which specifically deals with the leasing of personal property.

Question 8

Albert has a contract to buy 100 tables from Bartholomew at a price of $50 a table. Five days before Bartholomew is to deliver the tables, he calls Albert to say that he is sorry but $50 won't cover his costs, and he will now need at least $75 a table. Albert agrees, because he needs the tables for his special sale. The modified contract is enforceable even though Albert isn't getting any new consideration, so long as Bartholomew is acting in good faith and the agreement to the new price is put in writing.

Accepted Answer

Under the Uniform Commercial Code (UCC), which governs contracts for the sale of goods in the United States, a modification of a contract for the sale of goods does not require consideration if both parties agree to the modification, the modification is made in good faith, and, if the contract as modified falls within the statute of frauds, the modification is in writing.

Question 9

In determining whether a contract containing both a sale of goods and a service is a UCC contract or general contract, a majority of states follow the predominant purpose test.

Accepted Answer

The predominant purpose test is used by a majority of states to determine whether a contract is governed by the Uniform Commercial Code (UCC) or general contract law, by assessing whether the contract's primary purpose is the sale of goods or the provision of services.

Question 10

If a contract does not comply with the statute of frauds, it is void.

Accepted Answer

A contract that does not comply with the statute of frauds is not necessarily void but is unenforceable. This means that while the contract exists, it cannot be enforced in court due to its non-compliance with specific legal requirements.

Question 11

Categorizing a transaction as a lease rather than a security interest:
A) has significant implications for the parties and for third parties.
B) has significant implications only for the parties to the transaction.
C) would mean the provisions of Article 9 of the UCC apply to the transaction.
D) would mean the transaction would be governed only by common law.

Accepted Answer

Categorizing a transaction as a lease rather than a security interest affects not only the parties involved in the transaction but also third parties, such as creditors or subsequent buyers, because it determines the legal rights and obligations applicable under the law, including priority rights in bankruptcy or insolvency situations.

Question 12

Amendments to UCC Articles 2 and 2A were promulgated in 2003 to accommodate electronic commerce and to reflect developments in business and law and, as of 2011, these amendments had been adopted in all of the states.

Accepted Answer

As of 2011, not all states had adopted the 2003 amendments to UCC Articles 2 and 2A, reflecting variations in state adoption of uniform laws.

Question 13

Which of the following is true regarding unconscionability under the Code?
A) It is defined in Article 2 as "extortionately harsh, showing no regard for conscience."
B) The Code denies or limits enforcement of an unconscionable contract for the sale of goods.
C) Unconscionability may be substantive, but it cannot be procedural.
D) Unconscionability of a contract for the sale of goods makes the contract void.

Accepted Answer

The Uniform Commercial Code (UCC), specifically in Article 2, which deals with the sale of goods, allows courts to deny or limit the enforcement of contracts or clauses that are found to be unconscionable. This provision is a safeguard against unfair contracts, but it does not define unconscionability explicitly nor does it automatically render a contract void; instead, it gives courts the discretion to refuse to enforce unconscionable terms.

Question 14

Under the CISG, which of the following would not always be considered a material alteration to an offer?
A) A change in payment.
B) A change in time of delivery.
C) A change in color of goods ordered.
D) The addition of an arbitration clause for settlement of disputes.

Accepted Answer

Under the CISG, changes that do not significantly alter the terms of the contract, such as a change in the color of goods, may not be considered a material alteration.

Question 15

Who among the following is most likely not considered a merchant according to Article 2 of the UCC?
A) Jim who owns a wholesale auto parts business.
B) Tom who, as a hobby, builds and sells birdhouses on the weekends.
C) Kay who sells her 3-year-old fishing boat to her neighbor.
D) Jan, who is not knowledgeable about selling sailboats, but who employs an experienced expert in the trade.

Accepted Answer

Kay, who sells her 3-year-old fishing boat to her neighbor, is most likely not considered a merchant according to Article 2 of the UCC because her sale is a one-time personal transaction rather than being in the business of selling goods.

Question 16

The Code defines __________ as " honesty in fact and the observance of reasonable commercial standards of fair dealing ."
A) good faith
B) unconscionability
C) merchantability
D) entrusting

Accepted Answer

Good faith is defined as "honesty in fact and the observance of reasonable commercial standards of fair dealing" in various legal contexts, including the Uniform Commercial Code (UCC) which governs commercial transactions in the United States.

Question 17

Contracts containing unconscionable clauses are void and unenforceable.

Accepted Answer

Contracts with unconscionable clauses are not automatically void; they may be deemed unenforceable by a court if the clauses are found to be excessively unfair or oppressive.

Question 18

Under the Code, a contract to sell or lease personal property is recognized whenever the parties manifest such an intent, even if they cannot identify a precise moment the contract was formed.

Accepted Answer

This statement is true as per the provisions of the Code. The parties need not identify a precise moment when the contract was formed, as long as their intent to sell or lease personal property is evident.

Question 19

Under the CISG, contracts for the sale of goods do not have to be evidenced by a writing to be enforceable, unless one of the parties has its place of business in a country that provides otherwise.

Accepted Answer

The CISG (United Nations Convention on Contracts for the International Sale of Goods) generally does not require contracts to be in writing, but allows countries to declare otherwise when they adopt the convention.

Question 20

The UCC modifies the common law rule by requiring additional consideration for the modification of a contract.

Accepted Answer

Under the Uniform Commercial Code (UCC), a contract can be modified without additional consideration as long as the modification is made in good faith. This is a departure from common law, which typically requires new consideration for any modification to a contract.

Quiz 19: Introduction to Sales and Leases

The CISG governs only the formation of the contract of sales and the rights and obligations of the seller and buyer. It does not cover the validity of the contract or any of its provisions.

A "merchant" is defined as a person who:

The definition of "usage of trade" includes:

In the case of Pittsley v. Houser, the court:

The Code provides that its remedies shall be liberally administered to place the aggrieved party in a position as good as the one she would have occupied had the defaulting party fully performed.

Edie telephoned the office supply store and agreed to buy a dozen ink cartridges at $26 each. She then realized what a good buy this was and called the store with a request to modify the contract to read two dozen. What is the consequence?

Leases of personal property exceed $100 billion annually and are governed by Article 2A of the UCC.

In determining whether a contract containing both a sale of goods and a service is a UCC contract or general contract, a majority of states follow the predominant purpose test.

If a contract does not comply with the statute of frauds, it is void.

Categorizing a transaction as a lease rather than a security interest:

Amendments to UCC Articles 2 and 2A were promulgated in 2003 to accommodate electronic commerce and to reflect developments in business and law and, as of 2011, these amendments had been adopted in all of the states.

Which of the following is true regarding unconscionability under the Code?

Under the CISG, which of the following would not always be considered a material alteration to an offer?

Who among the following is most likely not considered a merchant according to Article 2 of the UCC?

The Code defines __________ as " honesty in fact and the observance of reasonable commercial standards of fair dealing ."

Contracts containing unconscionable clauses are void and unenforceable.

Under the Code, a contract to sell or lease personal property is recognized whenever the parties manifest such an intent, even if they cannot identify a precise moment the contract was formed.

Under the CISG, contracts for the sale of goods do not have to be evidenced by a writing to be enforceable, unless one of the parties has its place of business in a country that provides otherwise.

The UCC modifies the common law rule by requiring additional consideration for the modification of a contract.