Question 1

The purpose of Article 2 of the UCC is to modernize, clarify, simplify, and make uniform the law of sales.

Accepted Answer

Article 2 of the Uniform Commercial Code (UCC) is specifically designed to govern the sale of goods, aiming to modernize, clarify, simplify, and make uniform the laws related to sales transactions across different jurisdictions.

Question 2

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 to determine whether the primary purpose of a contract is the sale of goods or the provision of services, which helps decide if the UCC applies.

Question 3

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 the sale of goods, a contract modification does not require new consideration if it is made in good faith and agreed upon by both parties, especially if the modification is put in writing.

Question 4

Contracts containing unconscionable clauses are void and unenforceable.

Accepted Answer

Unconscionable clauses may render a contract voidable, not automatically void. Courts may choose to enforce the rest of the contract without the unconscionable clause.

Question 5

A lessee under a consumer lease and a buyer under a sale of goods are provided with the same protections against unconscionability under the UCC.

Accepted Answer

The UCC provides different protections for lessees under consumer leases and buyers under sales of goods, with specific provisions tailored to each type of transaction.

Question 6

Substantive unconscionability involves scrutiny by the court for "bargaining naughtiness."

Accepted Answer

Substantive unconscionability refers to the fairness of the terms of a contract, not the process of bargaining, which is covered by procedural unconscionability.

Question 7

A finance lease is a special type of lease transaction that generally involves three parties instead of two.

Accepted Answer

A finance lease involves three parties: the lessor, the lessee, and the lender.

Question 8

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 void but unenforceable, meaning it cannot be enforced in court unless it meets certain exceptions.

Question 9

Under the Code, if the parties have reached no agreement on price, the price is a reasonable one at the time of making the contract.

Accepted Answer

Under the Uniform Commercial Code (UCC), if the parties have not agreed on a price, the price is a reasonable one at the time of delivery, not at the time of making the contract.

Question 10

If a merchant signs a written offer to buy or sell goods, this will be irrevocable only if accompanied by consideration.

Accepted Answer

Under the Uniform Commercial Code (UCC), a merchant's firm offer to buy or sell goods in a signed writing is irrevocable for the time stated, or a reasonable time if not stated, without the need for consideration.

Question 11

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

The 2003 amendments to UCC Articles 2 and 2A were not widely adopted by the states, and as of 2011, they had not been adopted in all states.

Question 12

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

Accepted Answer

The UCC (Uniform Commercial Code) allows for contract modifications without additional consideration, as long as the modification is made in good faith.

Question 13

The definition of "goods" in the UCC may include timber, minerals, growing crops, or a building.

Accepted Answer

The UCC (Uniform Commercial Code) defines "goods" as all things that are movable at the time of identification to the contract for sale, which can include items like timber, minerals, growing crops, or a building if they are to be severed by the seller.

Question 14

The UCC definition of "unconscionable" is clear and unambiguous.

Accepted Answer

The UCC (Uniform Commercial Code) does not provide a clear and unambiguous definition of "unconscionable," leaving it open to interpretation by courts based on the circumstances of each case.

Question 15

A contract to purchase stocks and bonds is governed by Article 2 of the UCC.

Accepted Answer

Article 2 of the UCC governs the sale of goods, not stocks and bonds, which are considered securities and are governed by other laws.

Question 16

Article 2A of the UCC affords special treatment for consumer leases.

Accepted Answer

Article 2A of the Uniform Commercial Code (UCC) specifically addresses leases of personal property, including consumer leases, and provides certain protections and regulations for these transactions.

Question 17

Leslie, the owner of a shoe store, purchased 500 Model XT-50 running shoes from her supplier, but a price was not stated in the contract. The contract is voidable at Leslie's option until the parties agree on a price.

Accepted Answer

In a contract for the sale of goods, if the price is not stated, the contract is not voidable. Instead, the Uniform Commercial Code (UCC) allows the price to be determined as a reasonable price at the time of delivery.

Question 18

A lease is the transfer of title to goods from seller to buyer for a price.

Accepted Answer

A lease is a contractual agreement where one party (the lessor) allows another party (the lessee) to use an asset for a specified period in exchange for periodic payments, but it does not transfer the title of the goods.

Question 19

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 contract validity, focusing instead on the formation of contracts and the rights and obligations of the parties involved.

Question 20

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 that the writing requirement applies if they choose to do so.

Quiz 19: Introduction to Sales and Leases