Question 1

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 valid and enforceable.
C) There is no consideration, so the contract is void.
D) The modified contract is void.

Accepted Answer

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

Question 2

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

Accepted Answer

The answer of Under the CISG, which of the following...

Question 3

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 United Nations Convention on Contracts for the International Sale of Goods (CISG) indeed governs the formation of contracts for the sale of goods and the rights and obligations of the seller and buyer arising from such a contract. However, it expressly excludes matters of validity of the contract or any of its provisions from its scope.

Question 4

Contracts containing unconscionable clauses are void and unenforceable.

Accepted Answer

The answer of Contracts containing unconscionable clauses are void and...

Question 5

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 the common law requirement of new consideration for contract modifications.

Question 6

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 of a contract for the sale of goods makes the contract void.
D) Unconscionability may be substantive, but it cannot be procedural.

Accepted Answer

The Uniform Commercial Code (UCC), specifically in Article 2, allows courts to deny or limit the enforcement of contracts or clauses that are found to be unconscionable. This provision is designed to prevent unfairness and oppression in contracts for the sale of goods.

Question 7

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

Accepted Answer

A merchant is defined by all of these characteristics: dealing in specific goods, employing agents with expertise, and possessing or claiming specialized knowledge or skills in certain goods or practices.

Question 8

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 does provide that 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, as stated in Section 1-106 of the UCC.

Question 9

The definition of "usage of trade" includes:
A) a practice regularly observed and followed in a place, vocation, or trade.
B) 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.
C) separation rules that apply to transactions between merchants.
D) All of these.

Accepted Answer

"Usage of trade" refers to a practice or method of dealing regularly observed and followed in a place, vocation, or trade, which is option A. Options B and C describe different concepts related to agreements and transactions.

Question 10

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

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 she is engaging in a one-time, personal sale rather than conducting sales in goods as a business.

Question 11

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

This is correct. The predominant purpose test is used by a majority of states to determine whether a contract is primarily a sale of goods (which would fall under the UCC) or primarily a service (which would fall under the common law).

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 the fact that the adoption of uniform laws across all states can be a slow and uneven process.

Question 13

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

This statement is true. A contract modification is only enforceable if both parties agree to the change, and as long as the change is made in good faith and is supported by consideration or a valid legal reason. In this case, Albert agrees to the new price because he needs the tables, and Bartholomew is acting in good faith by notifying Albert of the change in costs before delivering the tables. Additionally, the requirement for the modification to be put in writing is a common practice for ensuring clarity and avoiding misunderstandings in contract terms.

Question 14

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

This is because Article 11 of the CISG provides that a contract for the sale of goods need not be concluded in or evidenced by writing and is not subject to any other formal requirement. However, if one of the parties has its place of business in a country that requires a written contract for enforceability, then that requirement must be followed.

Question 15

In the case of Pittsley v.Houser, the court:
A) found the CISG governed the contract in question.
B) found the "predominant factor" test was the better, more prudent rule.
C) held that the "predominant factor" test contravened the UCC's declared purpose.
D) 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.

Accepted Answer

The court found the "predominant factor" test was the better, more prudent rule for determining whether the UCC or common law should apply to a mixed contract involving both goods and services.

Question 16

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 failure to meet specific legal requirements.

Question 17

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

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 commercial transactions under the Uniform Commercial Code (UCC).

Question 18

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

Accepted Answer

Article 2A of the UCC governs leases of personal property, and the total annual value of such leases is indeed over $100 billion.

Question 19

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) Two of these are correct.

Accepted Answer

Categorizing a transaction as a lease rather than a security interest affects both the parties involved and third parties, as it determines the applicable legal framework and rights.

Question 20

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 according to the provisions of the Code, which recognizes the intent of the parties as the key element in determining the formation of a contract to sell or lease personal property, even if there is no specific moment identified as the point of agreement.

Quiz 19: Introduction to Sales and Leases

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?

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

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.

Contracts containing unconscionable clauses are void and unenforceable.

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

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

A "merchant" is defined as a person who:

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.

The definition of "usage of trade" includes:

Who among the following is most likely not considered a merchant according to Article 2 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.

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.

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.

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

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

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

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

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

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.