Question 1

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 majority of states follow the predominant purpose test to determine whether a contract containing both a sale of goods and a service is a UCC contract or general contract. This test looks at whether the primary purpose of the contract is the sale of goods or the provision of services.

Question 2

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), an offer to buy or sell goods is irrevocable if it is a signed, written offer by a merchant promising to keep the offer open, and it does not require consideration to be irrevocable for the time stated or a reasonable time, but not exceeding three months.

Question 3

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

Accepted Answer

This statement accurately reflects the purpose of Article 2 of the UCC.

Question 4

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

Accepted Answer

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

Question 5

Contracts containing unconscionable clauses are void and unenforceable.

Accepted Answer

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

Question 6

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

Accepted Answer

The UCC defines goods as "all things that are movable at the time of identification to the contract for sale" and specifically includes items like timber, minerals, growing crops, and buildings.

Question 7

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

Accepted Answer

Substantive unconscionability involves examining the fairness of the terms of the contract itself, not the behavior during the bargaining process.

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 doctrine of promissory estoppel, if a promise causes someone to rely on that promise and suffer a detriment as a result, the promise may be enforced even without new consideration. In this case, Albert relied on Bartholomew's promise to deliver the tables at a higher price and suffered a detriment (paying more for the tables) as a result. As long as Bartholomew acted in good faith and the agreement was put in writing, the modified contract is enforceable.

Question 9

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 automatically voidable. Under the Uniform Commercial Code (UCC), a reasonable price at the time of delivery can be determined if the parties intended to make a contract.

Question 10

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

Accepted Answer

A lease is not a transfer of title, but rather a temporary agreement for the use of goods in exchange for payment. Ownership remains with the lessor.

Question 11

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 true according to Article 11 of the CISG, which states that a contract of sale need not be concluded in or evidenced by writing and is not subject to any other requirement as to form. However, this provision is subject to any contrary provisions in the applicable law, if one of the parties has its place of business in a country which has made a declaration under Article 96 of the CISG requiring contracts to be in writing.

Question 12

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

The answer of Under the Code, if the parties have...

Question 13

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

Accepted Answer

The UCC's definition of "unconscionable" is intentionally broad and somewhat vague, allowing courts flexibility in interpretation to address fairness and justice in contracts.

Question 14

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 15

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 supplier of the leased asset.

Question 16

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.

Question 17

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 may be unenforceable. The statute of frauds requires certain types of contracts to be in writing to be enforceable, but failure to comply does not automatically void the contract.

Question 18

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 only governs the formation of the contract of sales, the rights and obligations of the seller and buyer, and the remedies available for breach of contract. It does not cover the validity of the contract or any of its provisions. Validity is left to be determined by domestic law.

Question 19

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

Accepted Answer

Article 2A of the UCC contains provisions that specifically apply to consumer leases, such as disclosure requirements and limitations on the lessor's remedies in the event of a default by the lessee.

Question 20

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

Under the Uniform Commercial Code (UCC), a lessee under a consumer lease is protected by Article 2A, which has provisions specifically addressing leases, while a buyer under a sale of goods is protected by Article 2. The protections against unconscionability might be similar but are not identical, as they are tailored to the specific contexts of leases and sales.

Quiz 19: Introduction to Sales and Leases