BADM 201 Ch. 19-25 & 30 (FINAL)

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Seller and Buyer enter into an agreement in which Buyer purchases 100 black laptops from Seller for $10,000. There is no agreement regarding payment. If Seller delivers 100 black laptops to Buyer, when is Buyer obligated to pay seller? a. At the time Buyer receives the laptops. b. At the time of shipment from Seller. c. At the time of the agreement. d. None of the answers are correct.

a. At the time Buyer receives the laptops.

Daniel, a merchant in the business of selling appliances, sold a refrigerator to Michelle, a retail customer. Michelle paid for the refrigerator but did not have access to a moving truck to transport the refrigerator. Daniel agreed to hold the refrigerator until the next day. Later that night, a fire in Daniel's store destroyed the refrigerator and other merchandise. Who has risk of loss for the refrigerator in this situation? a. Daniel has risk of loss since he is a merchant. b. Michelle has risk of loss since Daniel tendered delivery at the time of the sale. c. The risk of loss is shared equally between Daniel and Michelle. d. Michelle has risk of loss since she paid for it.

a. Daniel has risk of loss since he is a merchant.

Bill orders a custom-made boots from Rooks to be delivered by Friday at 5 p.m. When the boots are delivered to his office on Friday afternoon, he is in conference with a client. He accepts delivery and places the boots in his closet. Bill takes the boots home and when tries them on Saturday evening, he discovers that they do not fit correctly, so he calls Rooks on Monday and informs them that he is returning the boots. What can he do? a. He can revoke acceptance if the incorrect size of the boots substantially impair the value of the goods to him and Rooks cannot repair the defect. b. He cannot reject the goods because the size of the boots is curable defect. c. He can reject the goods since he had not yet accepted them prior to inspection. d. He cannot revoke acceptance since the size of the boots is not difficult to discover.

a. He can revoke acceptance if the incorrect size of the boots substantially impair the value of the goods to him and Rooks cannot repair the defect.

Which of the following is NOT included within the Code definition of merchantability? a. In the case of fungible goods that they be of a quality that exceeds the description and be above average. b. Reasonably fit for the ordinary purposes for which the goods are used. c. Be of fair, average quality. d. Pass without objection in the trade under the contract description.

a. In the case of fungible goods that they be of a quality that exceeds the description and be above average.

Rainbow Toy Corporation places a rocket ship toy into the market, but the rocket is missing certain plastic screws that are part of the specifications of the project. Such a defect is a: a. Manufacturing Defect. b. Design Defect. c. Failure to Warn Defect. d. None of the answers are correct.

a. Manufacturing Defect.

__________ exists by a product failing to meet manufacturing specifications thus not made properly. a. Manufacturing defect b. Failure to warn c. Design defect d. Strict liability

a. Manufacturing defect

Daniel, a lawyer, sold a refrigerator to his friend Michelle for $1,000. Michelle did not have access to a moving truck to transport the refrigerator. Daniel agreed to hold the refrigerator until the next day. Later that night, an accidental fire in Daniel's home destroyed the refrigerator. Who has risk of loss for the refrigerator in this situation? a. Michelle has risk of loss because Daniel is not a merchant. b. Daniel has risk of loss since he is a merchant. c. None of these answers are correct. d. The risk of loss is shared equally between Daniel and Michelle.

a. Michelle has risk of loss because Daniel is not a merchant.

Which of the following would not be a remedy available to the seller on account of buyer's breach? a. Require the financially sound buyer to return the goods. b. Stop delivery of the goods by carrier. c. Recover the price. d. Cancel the contract.

a. Require the financially sound buyer to return the goods.

In the In Re L. B. Trucking, Inc. case: a. Southern States was found to have breached both express and implied warranties. b. warranty provisions of the UCC did not apply because the sale of goods was merely incidental to the service aspect of the contract. c. Thomas's statements were found by the court to be mere puffing or sales talk. d. Durham did not rely on Thomas's statements, so they could not be considered warranties.

a. Southern States was found to have breached both express and implied warranties.

Commercial GC, Ltd. orders 100 doors from a company in California. They are sent "F.O.B. Hartford, Connecticut," but they are damaged in transit. What is the consequence? a. The California company is required to bear the loss since the doors had not yet reached the F.O.B. point. b. Commercial GC, Ltd. must accept the doors and is responsible for any damages. c. It cannot be determined who has the risk of loss from the information given. d. The California company and Commercial GC will have to split the loss since they did not specify in their contract when the risk of loss would pass to Commercial GC.

a. The California company is required to bear the loss since the doors had not yet reached the F.O.B. point.

Laura orally agrees to buy 50 smartphones from Smartphones, Inc. for $25,000. Smartphones delivers 25 smartphones to Laura, who receives and accepts them. Which of the following is correct with regard to this transaction? a. The contract is enforceable to the extent of the 25 machines that have been received and accepted. b. The entire contract is in violation of the statute of frauds and cannot be enforced. c. Laura can enforce the contract for the additional 25 smartphones. d. This is a bad deal, and is therefore commercially unconscionable from the beginning and unenforceable.

a. The contract is enforceable to the extent of the 25 machines that have been received and accepted.

Bob telephoned the office supply store and agreed to buy 90 reams of paper at $5 each. He then realized what a good buy this was and called the store with a request to modify the contract to read 200 reams of paper. What is the consequence? a. The modified contract is unenforceable. b. There is no consideration, so the contract is void. c. The modified contract is void. d. The modified contract is valid and enforceable.

a. The modified contract is unenforceable.

Sam, a seller in Miami, enters into a contract that states that goods are to be delivered to Maria, a buyer in New York. Title is to remain with Sam until delivery. This is: a. a destination contract. b. an FOB Miami contract. c. a shipment contract. d. a consignment.

a. a destination contract.

Strict liability in tort imposes liability on: a. a manufacturer of a defective component used in a larger product if the manufacturer of the finished product made no essential change in the component. b. a manufacturer of a component used within a larger product, the manufacturer of which modifies the component for use in its finished product. c. a non-merchant seller of a defective product which is unreasonably dangerous to the user or consumer. d. a manufacturer, even if the defect occurs after it left the factory.

a. a manufacturer of a defective component used in a larger product if the manufacturer of the finished product made no essential change in the component.

Tablets Plus, Ltd. enters into a contract with Electronics Mfg, Inc. to manufacturer one million tablets to be delivered by September 30th., in time for the holiday season. Electronics Mtg. notifies Tablets Plus that it will not perform the contract on August 1st. In this situation, the notice is: a. an anticipatory repudiation. b. a request for adequate assurance of performance. c. not a breach until the contract deadline passes. d. a right of cooperation

a. an anticipatory repudiation.

Sam, a buyer in Atlanta enters into a sales contract with JP Manufacturing, a seller in Chicago. If the contract does not mention the place for delivery of the goods, the place of delivery will be: a. as JP Manufacturing's place of business in Chicago. b. irrelevant since the contract is void. c. as stated in all destination contracts. d. at the buyer's business or residence in Atlanta.

a. as JP Manufacturing's place of business in Chicago.

A transfer, not in the ordinary course of the transferor's business, of a major part of inventory is known as: a. bulk sales. b. large scale trade. c. bulk transfer. d. global trade.

a. bulk sales.

Title cannot pass from the seller to the buyer unless existing goods have been: a. identified. b. tendered. c. delivered. d. manufactured.

a. identified.

Leslie purchased 100 flower pots from a local merchant. Warranties which are not included in her sales contract, but exist by "operation of law," are the: a. implied warranties. b. express warranties. c. exclusive warranties. d. quasi warranties.

a. implied warranties.

A buyer in a contract for the sale of goods: a. must bear the expenses of inspection, but may recover these costs from the seller if the goods are rightfully rejected. b. loses the right to reject nonconforming goods by not inspecting them immediately upon delivery. c. must pay prior to inspection with a C.O.D. sale, which impairs the buyer's remedies. d. may not inspect the goods before payment or acceptance, unless the parties agree otherwise.

a. must bear the expenses of inspection, but may recover these costs from the seller if the goods are rightfully rejected.

In a sale on approval: a. possession, but not title, is transferred to the buyer for a stated period of time. b. possession and title are transferred to the buyer for a stated period of time. c. title, but not possession, is transferred to the buyer for a stated period of time. d. neither title nor possession is transferred to the buyer for a stated period of time.

a. possession, but not title, is transferred to the buyer for a stated period of time.

A manifestation by the buyer of his unwillingness to become the owner of the goods is called: a. rejection. b. revocation. c. acceptance. d. tender.

a. rejection.

When goods are sold and delivered to the buyer with an option to return them to the seller, a(n) __________ has occurred. a. sale or return b. bailment c. sale on approval d. consignment

a. sale or return

Solomon pays Henry's Bike Shop $150 for a bicycle. This is an example of a: a. sale. b. option. c. lease. d. novation.

a. sale.

Trailers R Us enters into an agreement with Mobile Hot Dogs, a food vendor, for the manufacture of a new trailer for food vending services. Trailers R Us includes a provision in the fine print of the agreement that there are no warranties included with the sale and that Mobile Hot Dogs agrees to waive its rights to sue or arbitrate over any matters. This clause likely constitutes: a. substantive unconscionability. b. breach of the statue of frauds. c. failure to perform in good faith. d. procedural unconscionability.

a. substantive unconscionability.

Brown & Co enters into a contract with ATM Industries for the sale of 1,000 shirts at $6 per shirt. In order for Brown & Co to successfully sue ATM industries in the event of a breach of the agreement, all of the following are required except: a. the price of the goods. b. the signature of the defendant. c. a written agreement indicating that a sale or contract to sell has been made. d. the quantity of the goods involved in the transaction.

a. the price of the goods.

A sale of goods is defined as: a. the transfer of title to the goods. b. the risk of loss on the goods. c. an insurable interest in the goods. d. a special property interest in the goods.

a. the transfer of title to the goods.

In the case of Pittsley v. Houser, the issue of the case is: a. whether the UCC applies to the transaction. b. whether the CISG governed the contract in question. c. whether 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 nongoods part of the contract. d. whether the "predominant factor" test contravened the UCC's declared purpose.

a. whether the UCC applies to the transaction.

In Womco, Inc. v. Navistar International Corporation the issue was: a. whether the warranty of merchantability and warranty of fitness for a particular purpose were communicated clearly to the buyer before the sale. b. whether the warranty of merchantability and warranty of fitness for a particular purpose must be in writing. c. whether the warranty of merchantability and warranty of fitness for a particular purpose could be disclaimed. d. whether the warranty of merchantability and warranty of fitness for a particular purpose clauses were conspicuous.

a. whether the warranty of merchantability and warranty of fitness for a particular purpose were communicated clearly to the buyer before the sale.

Which of the following is generally NOT a defense to a claim against a manufacturer under 402A? a. Voluntary assumption of the risk. b. Contributory negligence on the part of the plaintiff. c. Subsequent alteration of the product by the plaintiff. d. Misuse or abuse of the product.

b. Contributory negligence on the part of the plaintiff.

Rainbow Toy Corporation places a rocket ship toy into the market. The rocket is manufactured according to specifications, but the rocket suddenly explodes after its first use. Such a defect is a: a. Manufacturing Defect. b. Design Defect. c. Failure to Warn Defect. d. None of the answers are correct.

b. Design Defect.

The initials ______ and _____ mean place of shipment and port of shipment, respectively, in a shipment contract. a. F.B.I. and F.E.I. b. F.O.B. and F.A.S c. F.O.B. and C.I.F. d. None of these are correct.

b. F.O.B. and F.A.S

Karen decided to sell her stair step exerciser, because she wasn't using it as much as she thought she would. Her friend Lydia bought it from Karen for $100. The first day that Lydia used the exerciser, it fell apart, injuring Lydia's ankle. In this situation: a. Karen can sue the manufacturer for breach of the warranty of merchantability, because she was the original buyer. b. Lydia cannot sue Karen for the warranty of merchantability because Karen is not a merchant. c. Lydia cannot sue Karen, because they are not in privity of contract. d. Lydia can sue Karen for breach of the warranty of merchantability, because the exerciser is not fit for the ordinary purpose intended.

b. Lydia cannot sue Karen for the warranty of merchantability because Karen is not a merchant.

Mark, a college student, agreed to sell his car to Henry for $5,000. The contract required Mark to take the car on that same day to a mechanic where Henry was going to have certain repairs made. Henry paid Mark the money, kicked the tires and said, "I'm glad you're mine," and drove off. Mark then drove the car on to the trailer and set off for the two-hour drive to the mechanic. Has there been a sale? a. No, not until Henry sees the car again. b. No, not until delivery to the mechanic. c. Yes, since the contract was made earlier in the day. d. Yes, since Henry already paid for the car.

b. No, not until delivery to the mechanic.

Alex sees Mona's ring, and he thinks it is very valuable. He uses physical duress to cause her to give him the ring, and he quickly sells it to Hanna for $5,000. A month later, Mona discovers that Hanna has her ring. Can Mona get the ring back? a. Yes, since Alex had voidable title to the ring. b. No, since Hanna was a good faith purchaser for value. c. Yes, since a true owner can always recover her own property. d. Yes, since Alex had void title to the ring.

b. No, since Hanna was a good faith purchaser for value.

Which of the following is true regarding unconscionability under the Code? a. It is defined in Article 2 as "monstrously 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. All of these are correct.

b. The Code denies or limits enforcement of an unconscionable contract for the sale of goods.

Wired Up, Inc. shipped nonconforming goods to Chase. Which of the following best describes risk of loss concerning the goods? a. The risk of loss will pass to the buyer regardless of remedy of the defect or acceptance. b. The risk of loss will remain with the seller until remedy of the defect or acceptance. c. The seller has risk of loss to the extent of any insurance coverage, and the buyer has risk of loss for anything beyond the seller's insurance. d. The risk of loss will pass as per the contract terms.

b. The risk of loss will remain with the seller until remedy of the defect or acceptance.

Which of the following transactions is governed by Article 2 of the UCC? a. The sale of an apartment complex. b. The sale of oranges to be picked from a 10-acre grove. c. A contract to receive medical services in a hospital. d. The sale of common stock of a soft drink company.

b. The sale of oranges to be picked from a 10-acre grove.

Which of the following is true with regard to implied warranties under the Code? a. They continue the common law rule of caveat emptor. b. They depend on the type of contract or sale entered into. c. They are intended to protect the seller rather than the buyer. d. They are a result of specific language in the sales contract.

b. They depend on the type of contract or sale entered into.

A seller in Chicago agreed to send goods to a buyer in Houston. The terms of the contract specified that the goods were to be shipped F.O.B. Houston. When does the buyer acquire title to the goods? a. When the goods are delivered to the carrier in Chicago. b. When the goods are tendered in Houston as specified in the contract. c. When the shipment arrives in Texas. d. None of the answers are correct.

b. When the goods are tendered in Houston as specified in the contract.

Michael is a guest at George's home. While there, he goes into the library and picks up a music box that is part of George's collection. Michael overwinds the stem and it breaks. Hoping George won't notice, Michael takes the music box for repair to a jeweler who sells similar ones. The jeweler fixes it, but forgets to tag it and an unsuspecting clerk sells it to Robert. Michael is frantic. Can George get the music box from Robert? a. Yes, Robert was not a buyer in the ordinary course of business. b. Yes, Robert has assumed only Jack's title, which is no title at all. c. No, the jeweler was not a merchant with regard to music boxes. d. No, the jeweler gives good title to a bona find purchaser for value.

b. Yes, Robert has assumed only Jack's title, which is no title at all.

Seller and Buyer enter into an agreement in which Buyer purchases 100 black laptops from Seller. If Seller delivers 100 white laptops, may the Buyer rightfully reject this delivery? a. No, because Seller substantially performed. b. Yes, under the perfect tender rule. c. No, because Buyer did not inspect the laptops. d. None of the answers are correct.

b. Yes, under the perfect tender rule.

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. separate rules that apply to transactions between merchants. d. All of these are correct.

b. a practice regularly observed and followed in a place, vocation, or trade.

An obligation of the merchant-seller that the goods are reasonably fit for the ordinary purposes for which they are manufactured and sold, and the goods are of fair average quality is known as: a. strict liability. b. a warranty of merchantability. c. a warranty of fitness for a particular purpose. d. an express warranty.

b. a warranty of merchantability.

Under the UCC, for a contract or policy of insurance to be valid, the insured must have: a. good faith. b. an insurable interest. c. the power to transfer title. d. a lien.

b. an insurable interest.

Alice is browsing in a commercial art gallery when she sees a painting that she likes. Arthur, who is the manager of the gallery, tells her that in his opinion the painting is a genuine Leroy Neiman work. Based upon that representation, Alice buys the work for $5,000. At the sale, Arthur has Alice sign a receipt that includes the following language: This sale caries no warranties, including no EXPRESS or IMPLIED WARRANTIES. Alice later discovers that the painting is only a cheap copy of the original that is worth no more than $50. Arthur has: a. not breached a warranty because he was merely expressing his opinion. b. breached an express warranty. c. breached the warranty of title. d. breached and the warranty of fitness for a particular purpose.

b. breached an express warranty.

M & Z Co. offers a "subscription" for two bottles of wine to be delivered every month for one year. Payment must be made within two weeks of delivery. Bob placed a subscription and began receiving shipments of wine each month. On the fourth month, one of the bottles of wine that arrived was bad. Bob: a. cannot reject the installment since it is part of a series. b. can reject the installment and refuse to pay for it if M & Z cannot cure it. c. can treat the whole contract as breached and refuse to pay for past installments as well as future installments. d. can reject the installment and cancel the contract immediately.

b. can reject the installment and refuse to pay for it if M & Z cannot cure it.

A(n) __________ is a delivery of possession of personal property to an agent for sale by the agent. a. sale on approval b. consignment c. sale or return d. security interest

b. consignment

Mary's Cupcake Shop bakes and sells various types of cupcakes. In remodeling the office areas of its business, Mary's Cupcake Shop purchased tile from the Tile Shop, Inc. Under the Uniform Commercial Code, Mary's Cupcake Shop is a merchant of: a. cupcakes and carpet. b. cupcakes, but not carpet. c. carpet, but not cupcakes. d. neither cookies cupcakes nor carpet.

b. cupcakes, but not carpet.

After a breach by the seller, buyer may replevy the goods after identification if: a. the seller is insolvent. b. he cannot buy replacement goods. c. he acts within 30 days. d. he cannot buy replacement goods or the seller is insolvent.

b. he cannot buy replacement goods.

Commercially reasonable charges for the care and custody of goods that a buyer has rejected are known as: a. liquidated damages. b. incidental damages. c. consequential damages. d. cover charges.

b. incidental damages.

When delivery is to be made without moving the goods, unless otherwise agreed, title passes: a. when an insurable interest arises. b. on delivery of a document of title, when the contract calls for delivery of such document. c. when a special property interest arises. d. only when the buyer or her agent takes actual possession of the goods.

b. on delivery of a document of title, when the contract calls for delivery of such document.

In the Carter v. Tokai Financial Services, Inc. case, the main issue is: a. the agreement was found to be for an initial term of five years, which ARC had an option to renew for nominal consideration. b. the agreement was found to be a true finance lease. c. the agreement was found to fit within the definition of a secured transaction. d. the agreement was found to be governed by UCC Article 9.

b. the agreement was found to be a true finance lease.

Mary's Cupcake Shop bakes and sells various types of cupcakes. On July 5, Billy's Grocery Company orally agreed to buy 2,000 cupcakes from Mary's for $1,000. On July 10, Mary's sent Billy's a written confirmation of the cupcake sale. Billy's received the letter on July 12, filed it, but did not respond. On July 28, Mary's shipped the cupcakes to Billy's Grocery Company and the cupcakes arrived on July 29. Billy's refused to accept delivery and Mary sued. Under the Uniform Commercial Code: a. the contract is enforceable, but only for $500, not for $1,000. b. the contract is enforceable because Billy did not object to the confirmation within ten days. c. the contract is enforceable because of the rule concerning specially manufactured goods. d. the contract is not enforceable because of the statute of frauds.

b. the contract is enforceable because Billy did not object to the confirmation within ten days.

An "option" is defined as a contract by which: a. the offeror is bound to hold open an offer for an unspecified amount of time. b. the offeror is bound to hold open an offer for a specified amount of time. c. the offeree is bound to hold open an offer for an unspecified amount of time. d. the offeree is bound to hold open an offer for a specified amount of time.

b. the offeror is bound to hold open an offer for a specified amount of time.

In the Moulton Cavity & Mold Inc. v. Lyn-Flex Ind. case, the main issue is: a. whether Moulton has substantially performed under the contract. b. whether the buyer has a right to reject goods if the tender of delivery fails in any respect to conform to the contract. c. whether the Lyn-Flex approved the sample molds. d. Lyn-Flex rescinded its acceptance of the molds in a timely manner.

b. whether the buyer has a right to reject goods if the tender of delivery fails in any respect to conform to the contract.

If an anticipatory repudiation substantially impairs the value of the contract, the aggrieved party may: a. await performance for a commercially reasonable time. b. resort to any appropriate remedy for breach. c. All of these are correct. d. None of these are correct.

c. All of these are correct.

Rainbow Toy Corporation places a rocket ship toy into the market. The rocket is manufactured according to specifications and is a safe product, but the rocket has a tendency to char whatever surface it launches from due to intense heat coming from the rocket during launch causing property damage. If Rainbow Toy Corporation does not tell buyers about the potential to char the launching pad surface, such a defect is: a. Manufacturing Defect. b. Design Defect. c. Failure to Warn Defect. d. None of the answers are correct.

c. Failure to Warn Defect.

Patience entered into a "sale or return" agreement with Bill's Tortilla Company in which Bill's was to provide fresh tortillas to Patience each week for sale in Patience's store. One week, a thief broke into Patience's store and stole thirty packages of Bill's tortillas. Who has the responsibility for the losses caused by the theft? a. Bill's Tortilla Company and Patience equally, since a sale or return agreement envisions a sharing of the responsibility for any losses during the contract. b. Patience, since risk of loss for the tortillas would not shift until Patience sold the tortillas. c. Patience, since a sale or return places risk of loss on the party in possession of the goods. d. Bill's Tortilla Company, since the agreement was a "sale or return" contract.

c. Patience, since a sale or return places risk of loss on the party in possession of the goods.

Which of the following is not true about auctions? a. If the auctioneer knowingly receives a bid on behalf of the seller and notice has not been given that the seller reserves the right to bid at the sale, the bidder to whom the goods are sold can avoid the sale. b. A bidder may retract his bid at any time prior to acceptance by the auctioneer. c. The UCC provides that if an auction sale is advertised or announced in explicit terms to be with reserve, the auctioneer may not withdraw the article put up for sale unless no bid is made within a reasonable time. d. Unless an auction is advertised as being without reserve, the sale is with reserve.

c. The UCC provides that if an auction sale is advertised or announced in explicit terms to be with reserve, the auctioneer may not withdraw the article put up for sale unless no bid is made within a reasonable time.

Which of the following is not a remedy of the buyer? a. The buyer may have the right to obtain specific performance. b. The buyer has the right of cover and to receive damages. c. The buyer has the right to stop delivery of the goods. d. The buyer may have the right to recover incidental and consequential damages.

c. The buyer has the right to stop delivery of the goods.

In which of the following situations does the seller NOT have the right to cure? a. After the time for performance has expired if the seller had reasonable grounds for believing the buyer would accept a nonconforming tender with or without monetary adjustment. b. Where the time for performance under the contract has not yet expired. c. Where the buyer has revoked acceptance of nonconforming goods. d. Where the seller had reasonable grounds to believe nonconforming goods would be acceptable to the buyer with or without a money allowance.

c. Where the buyer has revoked acceptance of nonconforming goods.

Jennifer and Avonti Ltd. have dealt with each other for many years. Jennifer's Boutique orders 100 scarfs at $2.00 each from Avonti Ltd. Avonti sends back a confirmation letter with an additional, nonmaterial term. There is: a. no contract, but a counteroffer. b. a contract with the additional term only if Jennifer agrees. c. a contract with the additional term unless Jennifer objects. d. a contract without the additional term.

c. a contract with the additional term unless Jennifer objects.

Howey stole a laptop from Jessica and then sold it to his friend Monica for $50. Monica has: a. a voidable title to the laptop. b. good title to the laptop because she paid for it. c. a void title to the laptop. d. good title to the laptop, because she is a good faith purchaser.

c. a void title to the laptop.

The UCC provides that a good faith purchaser for value obtains title from one possessing voidable title even if that person obtained voidable title by all of the following except: a. mistake. b. fraud. c. an illegal act. d. duress.

c. an illegal act.

Terrell asks a salesperson what size of water heater he should buy for their twenty-unit motel. If Terrell purchases a tank based on the salesperson's suggestion, the salesperson's recommendation is: a. an implied warranty of merchantability regarding the water heater. b. an express warranty of merchantability regarding the water heater. c. an implied warranty of fitness for a particular purpose. d. no warranty, but only a statement of opinion.

c. an implied warranty of fitness for a particular purpose.

The Code defines __________ as "honesty in fact in the conduct or transaction concerned." a. unconscionability b. entrusting c. good faith d. merchantability

c. good faith

Leslie purchased 100 flower pots from a local merchant. Warranties which are not included in her sales contract, but exist by "operation of law," are the: a. express warranties. b. quasi warranties. c. implied warranties. d. exclusive warranties.

c. implied warranties.

A "sale" of goods happens when: a. the parties sign the contract. b. the parties agree. c. title to the goods is passed. d. a promise to transfer title is made.

c. title to the goods is passed.

If a buyer rejects nonconforming goods and the seller provides no instruction within a reasonable time, the buyer may do all of the following except: a. reship them to the seller. b. store the goods. c. use them. d. resell them for the seller's account.

c. use them.

Windows Mfg. receives an order from United Contractors, Inc. for windows to be sent from Buffalo, NY to Raleigh, NC by UPS using the delivery terms F.O.B. Buffalo, NY. The tender of performance occurs: a. when the good are identified. b. when the goods are taken by the buyer. c. when the goods are shipped. d. when the goods are delivered.

c. when the goods are shipped.

The concept of the "right to cooperation" is: a. where goods are destroyed before an offer to sell or to buy them is accepted. b. where reasonable grounds for insecurity arise regarding either party's performance. c. where one party's required cooperation is not timely, the other party is excused from any resulting delay in her own performance. d. where neither party is at fault and the agreed manner of delivery becomes impracticable, both parties are required to negotiate a new price.

c. where one party's required cooperation is not timely, the other party is excused from any resulting delay in her own performance.

In the case of Furlong v. Alpha Chi Omega Sorority, the issue of the case is: a. whether AXO inspected the sweaters in a timely manner. b. whether AXO's oral contract was enforceable. c. whether AXO had the right to reject the nonconforming goods as a whole. d. whether AXO approved the changes in the design.

c. whether AXO had the right to reject the nonconforming goods as a whole.

In Belden, Inc. v. American Electronic Components, Inc. the issue was: a. whether Belden's writings were sufficient to create an express warranty. b. whether express warranties are a question of law. c. whether the 1996 and 1997 statements by Belden regarding certification created an express warranty that extended to the October 2003 contract. d. whether Belden made express warranties in 1996 and 1997 regarding its wire.

c. whether the 1996 and 1997 statements by Belden regarding certification created an express warranty that extended to the October 2003 contract.

In the case of Hessler v. Crystal Lake Chrysler-Plymouth, Inc., the issue of the case is: a. whether the trial court erred in finding for the plaintiff. b. whether the plaintiff and defendant had an enforceable contract. c. whether the actions of the defendant constituted anticipatory repudiation. d. whether the plaintiff should have taken self-help measures to mitigate his losses.

c. whether the actions of the defendant constituted anticipatory repudiation.

A contract that does not satisfy the writing requirement of the Article 2 statute of frauds, but which is otherwise valid, is enforceable in which of the following situations? a. Where the goods have been delivered and accepted. b. Where payment has been accepted. c. Where the goods have been specially manufactured and are not suitable for resale in the ordinary course of business. d. All of these are correct.

d. All of these are correct.

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 are correct.

d. All of these are correct.

An aggrieved seller may: a. withhold delivery. b. resell or recover damages for non-acceptance or recover the price. c. cancel the contract. d. All of these are correct.

d. All of these are correct.

An express warranty within the meaning of the Code is created by which of the following? a. A sample. b. A description. c. A promise. d. All of these are correct.

d. All of these are correct.

The buyer's incidental damages resulting from the seller's breach include: a. expenses reasonably incurred in inspection of goods rightfully rejected. b. any commercially reasonable charges or commissions in connection with obtaining cover. c. any reasonable expenses connected to the delay. d. All of these are correct.

d. All of these are correct.

Whether an implied warranty arises out of the circumstances under which the parties enter into a contract may depend on: a. the type of contract entered into. b. the seller's merchant or non-merchant status. c. applicability of other statutes. d. All of these are correct.

d. All of these are correct.

Which of the following is correct with respect to consequential damages under the Code? a. Consequential damages include damages for destruction of a warehouse caused by the explosion of nonconforming goods. b. Consequential damages include damages for lost profits from a contract to resell goods which the seller never delivers. c. Particular needs of the buyer need to be made known to the seller before the seller can be held responsible for consequential damages relating to those needs. d. All of these are correct.

d. All of these are correct.

Kobayashi Ltd. contracts with Software Development Corp (SDC) to develop a new software platform for its customer relationship management system. SCD is not able to deliver the product in a timely manner and Kobayashi Ltd. cancels its contract. If SDC sues, which of the following law applies to this contract in a jurisdiction that follows the predominant factor test? a. UCC Article 9. b. UCC Article 2a. c. UCC Article 2. d. Common law.

d. Common law.

Which of the following is not a remedy available to an unpaid seller against the buyer? a. Recovery of the price. b. Recovery of incidental damages. c. Cancellation of the contract. d. Cover and sue for damages.

d. Cover and sue for damages.

James Appliances agrees to sell Jason one stainless-steel oven for $700. It is to be delivered to Jason's home on July 7. Under the perfect tender rule, which one of the following cases would permit Jason to rightfully reject the goods? a. James Appliances sent his truck to Jason's home with the stainless-steel oven on July 7, but Jason was not home. b. James Appliances sent a stainless-steel oven with a missing oven rack on July 5 and notifies Jason of the defect. c. James Appliances sent a stainless-steel oven with a small dent in it on July 7. Jason refuses delivery but never bothers to call James. d. James Appliances delivered a black oven on July 7, and Jason calls James to complain.

d. James Appliances delivered a black oven on July 7, and Jason calls James to complain.

Specific performance would be an available remedy to a buyer for which of the following goods? a. Hot water heater. b. Car. c. Computer. d. Racehorse

d. Racehorse

Which of the following is correct with regard to risk of loss, where the goods are in the possession of a bailee and are covered by a negotiable document of title? a. Risk of loss passes when the document is mailed to the buyer. b. Risk of loss passes when the seller tenders to the buyer written directions to the bailee to deliver the goods. c. Risk of loss passes when the document is tendered to the buyer. d. Risk of loss passes when the buyer receives the document.

d. Risk of loss passes when the buyer receives the document.

Which of the following is required for tender of delivery? a. That the tender occurs during the buyer's normal business hours. b. That the goods be made available to the buyer for at least one week if they are not perishable. c. That the seller put and held goods that marginally conform to the contract at the buyer's disposition. d. That the seller give the buyer reasonable notice of the tender.

d. That the seller give the buyer reasonable notice of the tender.

Gabe has agreed to buy Sarits's car, but the two have not agreed on the price. When there is no agreement as to price in a contract for a sale of goods, what effect does it have on the contract? a. The price is whatever the seller decides. b. The price is a reasonable price at the time of making the contract. c. There is no contract, because the agreement is not definite and certain enough. d. The price is a reasonable price at the time of delivery.

d. The price is a reasonable price at the time of delivery.

Goods are to be sent from Buffalo, NY to Raleigh, NC by UPS using the delivery terms F.O.B. Buffalo, NY. Where does tender occur? a. Where the goods are taken by the buyer. b. Where the goods are delivered. c. Where the goods are identified. d. Where the goods are shipped.

d. Where the goods are shipped.

Mark tells Leslie that his stereo has quadraphonic speakers because he was told that when he bought it. Leslie buys the stereo, but it does not have quadraphonic speakers. Is Mark liable for breach of warranty? a. No, because he did not promise her that the speakers were quadraphonic. b. Yes, because Mark was not acting in good faith. c. No, because he did not know his statement was false. d. Yes, because the statement was false.

d. Yes, because the statement was false.

A buyer in New York enters into a sales contract with a seller in Los Angeles. If the contract makes no mention of where the delivery of the goods will take place, the place of delivery will be: a. at the buyer's business or residence in New York. b. as stated in all destination contracts. c. irrelevant since the contract is void. d. at the seller's business or residence in Los Angeles.

d. at the seller's business or residence in Los Angeles.

A warranty may rise out of all of the following except: a. a promise made by the seller the buyer. b. out of the circumstances under which the sale is made. c. the mere existence of a sale. d. from a disclaimer.

d. from a disclaimer.

Matt tells Ron that the snow boots he is selling are capable of protection at temperatures of 20° below zero. Ron orders a pair for his trip to Greenland. The first night's temperature goes down to 27 below. Ron suffers frostbite on all of his toes. Ron then sues for breach of warranty. The result is: a. no breach, because Matt's statement was merely opinion. b. a breach, because Matt's statement is a breach of the implied warranty of a fitness for a particular purpose. c. a breach, because Matt's statement is a breach of the implied warranty of merchantability. d. no breach, because Matt's statement was correct.

d. no breach, because Matt's statement was correct.

The CISG applies to: a. sales by auction. b. negotiable instruments. c. goods bought for household use. d. the international sale of goods.

d. the international sale of goods.

Under the perfect tender rule, the buyer may reject the goods upon the seller's failure to comply with all of the following except: a. the existence of an installment contract. b. an agreement between the parties limiting the buyer's right to reject non-conforming goods. c. cure by the seller. d. the seller holding the goods when the contract is silent as to the place of delivery.

d. the seller holding the goods when the contract is silent as to the place of delivery.

The Windows, Inc. v. Jordan Panel Systems Corp. case illustrated the concept that: a. unless the parties expressly designate the type of contract, it will be interpreted to be a destination contract. b. express, specific provisions in a contract control as long as they are not unconscionable or grossly unfair to one of the parties. c. goods in the possession of a bailee which are to be delivered without being moved will have the risk of loss pass to the buyer when the buyer receives a negotiable document of title. d. unless the parties expressly specify that the contract requires the seller to deliver to a particular destination, the contract is generally considered to be a shipment contract.

d. unless the parties expressly specify that the contract requires the seller to deliver to a particular destination, the contract is generally considered to be a shipment contract.

In Robinson v. Durham, the main issue is: a. whether the Robinsons were good faith purchasers for value when they bought the car for their business, and had good title which they passed to Durham. b. whether Durham, a good faith purchaser for value, had good title. c. whether the amount of the jury award was correct. d. whether the Robinsons obtained no title from the thief, and therefore could not pass good title to Durham even though he was a good faith purchaser for value.

d. whether the Robinsons obtained no title from the thief, and therefore could not pass good title to Durham even though he was a good faith purchaser for value.

Eric bought a new snowmobile from the North Pole Manufacturing Company. After buying the machine, Eric then modified the spark plugs and a few other things in order to soup it up. In February, just after a snowfall, Eric was driving the snowmobile, when it tipped over, trapping him beneath it. His leg was severely burned. Eric now wants to sue North Pole for strict liability in tort. Eric: a. will likely win because the snowmobile is an unreasonably dangerous product. b. will likely win the suit, because of the faulty design of the snowmobile. c. cannot sue the manufacturer, because horizontal privity is lacking. d. will likely lose the suit, because the machine has been altered since its manufacture.

d. will likely lose the suit, because the machine has been altered since its manufacture.


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