Question 1

Orange Manufacturing Corporation (OMC) orders twelve job-training and on-the-job safety DVDs from Plum Productions, Inc., which delivers the disks to OMC's plant. This is most likely
A) a gift.
B) a lease of goods.
C) a sale of goods.
D) a service contract.

Accepted Answer

OMC ordered the DVDs from Plum Productions, Inc., making it a sale of goods.

Question 2

Under the UCC, the meaning of any agreement must be interpreted in light of commercial practices.

Accepted Answer

According to UCC Section 1-303, the interpretation of any agreement or term must be made in light of the commercial context, including the course of dealing, usage of trade, and the parties' intention. Therefore, commercial practices play a significant role in interpreting the meaning of an agreement under the UCC.

Question 3

Over the course of a year, Discount Market Company sells goods from its inventory and also sells one of its warehouses. In exchange, Discount receives checks, which Discount uses to repay a loan from Evermore Credit Inc. Article 2 of the UCC governs
A) the checks.
B) the payment of the loan.
C) the sale of the buildings.
D) the sale of the goods.

Accepted Answer

Article 2 of the UCC governs the sale of goods, which includes the inventory sold by Discount Market Company. It does not cover checks, loans, or real estate transactions like the sale of buildings.

Question 4

If there is no definite period stated, a firm offer by a merchant is irrevocable without the necessity of consideration for up to six months.

Accepted Answer

The answer of If there is no definite period stated,...

Question 5

A court can refuse to enforce a contract that the court deems to have been unconscionable at the time it was made.

Accepted Answer

This is true. Unconscionability refers to a situation where the terms of a contract are so one-sided or oppressive that no reasonable person would agree to them. If a court finds that a contract is unconscionable, it can refuse to enforce it or enforce only the parts of the contract that are not unconscionable.

Question 6

Under the UCC, an agreement modifying a contract needs no considera?tion to be binding.

Accepted Answer

The UCC recognizes the concept of a "modification without consideration." This means that a modification to a contract can be binding even if there is no additional consideration exchanged between the parties.

Question 7

Under the UCC, prompt shipment of goods is considered an acceptance of an offer to buy the goods.

Accepted Answer

According to the UCC (Uniform Commercial Code), if a seller sends the goods to the buyer, it is considered as an acceptance of the offer made by the buyer. This is known as the "shipment contract." Therefore, prompt shipment of goods is regarded as an acceptance of an offer to purchase under the UCC.

Question 8

All oral contracts are enforceable under the UCC.

Accepted Answer

Not all oral contracts are enforceable under the UCC. The UCC requires certain contracts, such as contracts for the sale of goods over $500, to be in writing in order to be enforceable.

Question 9

A course of performance is the conduct that occurs under the terms of a particular agreement.

Accepted Answer

A course of performance refers to the actual conduct and behavior of the parties involved in fulfilling the terms of a contract or agreement. It can be used as evidence in interpreting ambiguous terms or resolving disputes.

Question 10

Under the UCC, if a contract is unilateral, the offeror must be notified of the of?feree's performance.

Accepted Answer

Under the UCC, if a contract is unilateral and requires performance by the offeree, the offeror must be notified of the offeree's performance to complete the contract. This notification is essential to ensure that the offeror is aware of the offeree's completion of the obligation and is ready to fulfill their own obligations under the contract. Failure to provide such notice may result in the offeror's inability to enforce the contract.

Question 11

Precise Engineering, P.C., is a California-based firm that does business with clients throughout North America. Precise Engineering plans and executes construction projects, and buys and sells developed and undeveloped land, and related equipment and supplies. Precise Engineering has had to confront work-site theft and vandalism. With respect to these circumstances, the Uniform Commercial Code (UCC) provides a framework for
A) commercial transactions for the sale of and payment for goods.
B) international construction contracts.
C) domestic and foreign transactions in real estate.
D) prosecuting crimes against business interests.

Accepted Answer

The UCC provides rules and regulations for commercial transactions involved in the buying and selling of goods, including payment and delivery. As Precise Engineering buys and sells supplies and equipment related to its construction projects, the UCC can offer a framework for mitigating theft and vandalism-related losses.

Question 12

The UCC requires that the mirror image rule be followed for all acceptances.

Accepted Answer

The UCC has modified the mirror image rule to allow for variations in acceptance as long as the essential terms of the offer are not changed. This is known as the "battle of the forms" and is addressed in UCC Section 2-207.

Question 13

The terms of a fully integrated contract can be contradicted by evidence of any prior agreements.

Accepted Answer

A fully integrated contract is a written agreement that contains all the terms the parties intended to include in the contract. Evidence of prior agreements cannot contradict the terms of a fully integrated contract. This is because the parties intended for the written agreement to be the final expression of their agreement, and any prior or contemporaneous agreements are considered merged into the written contract.

Question 14

Dan, a computer programmer, holds a garage sale to sell a lawnmower, some clothes, some CDs and some old clothes. Will, a lawyer, sells Thelma his collection of seashells. Philip, a CEO of a successful company, sells George his pet parakeet. Judy, an expert horse trainer, sells Bob a horse. Which person would be considered a merchant under the UCC?
A) Dan
B) Will
C) Judy
D) Philip

Accepted Answer

According to the Uniform Commercial Code (UCC), a merchant is defined as a person who deals in the goods of the kind involved in the transaction or who by his or her occupation holds themselves as having knowledge or skill peculiar to the practices or goods involved in the transaction. Since Judy is an expert horse trainer and sells a horse to Bob, she can be considered a merchant under the UCC. The other individuals are not specifically involved in selling goods as part of their occupation or expertise.

Question 15

In interpreting a commercial agreement, a court will assume that the usage of trade was taken into account when the agreement was phrased.

Accepted Answer

This principle is known as the "usage of trade" doctrine, which assumes that parties to a commercial agreement intend to use terms and language that are customary in their industry or trade. Therefore, a court will interpret the agreement in light of these industry customs and practices.

Question 16

An unconscionable contract is one that is so unfair and one sided that it would be unreasonable to enforce it.

Accepted Answer

An unconscionable contract is defined as one that is extremely one-sided and unfair to one party, to the point where it would be considered unreasonable to enforce it. Therefore, the statement is true.

Question 17

If a nonmerchant-seller's offer expressly conditions acceptance on a nonmerchant-buyer's agreement to the terms of the offer, the buyer's positive response is an acceptance even if it contains additional terms.

Accepted Answer

This is known as the "mirror image rule," meaning that the buyer's acceptance must match the terms of the offer exactly in order to form a binding contract. However, if the offer expressly allows for additional terms in the acceptance, then those additional terms may become part of the contract as well.

Question 18

Canyon Creek Corporation is a Delaware-based firm that does business throughout the United States. With respect to this circumstance, the UCC has been adopted by, and applies in,
A) a few of the states.
B) all of the states, in whole or in part.
C) half of the states.
D) none of the states, to date.

Accepted Answer

The UCC has been adopted by all 50 states in the United States, either in whole or in part. Therefore, Canyon Creek Corporation would be subject to the provisions of the UCC in all states where it does business.

Question 19

Under the UCC, a firm offer for a sale or lease of goods made by a merchant without consideration can be revoked at any time before acceptance.

Accepted Answer

Under the UCC, a firm offer made by a merchant without consideration cannot be revoked for a specified period of time, which is not to exceed three months.

Question 20

Generally, acceptance of an offer to lease goods may be made in any reasonable manner and by any reasonable means.

Accepted Answer

This is true according to the Uniform Commercial Code (UCC) section 2A-303. It allows for flexibility in the method of acceptance as long as it is reasonable.

Quiz 17: The Formation of Sales and Lease Contracts

Orange Manufacturing Corporation (OMC) orders twelve job-training and on-the-job safety DVDs from Plum Productions, Inc., which delivers the disks to OMC's plant. This is most likely