business law chapter 13

In a contract that is designated f.o.b. (the place of shipment), which of the following are true? (Check all that apply.)

The risk of loss transfers to buyer at the place of shipment. The buyer accepts full responsibility for goods during transit. Title transfers to buyer at the place of shipment. The buyer pays all shipping costs.

Purchase orders and invoices in sales contracts often have terms hidden in the fine print--ones that may contradict one another and which are not essential to the completion of the sale. How are these conflicts resolved?

Through application of the rules of the Uniform Commercial Code

Which of the following constitute documents of title under the UCC? (Check all that apply.)

Warehouse receipts Bills of lading

The exception to the UCC rule that requires a written contract for the sale of goods of $500 or more involving a written confirmation sent from one party to another is

a limited exception for transactions between merchants only.

When goods are sold on approval, they remain the property of the seller until they are approved by the buyer. The buyer's approval may be indicated by: (Check all that apply.)

an oral consent. a written consent. the buyer's retaining the goods for more than a reasonable time.

Goods held on sale or return: (Check all that apply.)

are subject to the claims of the buyer's creditors. must be cared for and used in a reasonable manner. are held by the buyer.

The CISG applies to sales between businesses whose places of business are in different

countries adopting the CISG.

E-Sign requires that parties to a cyber-contract must have some way to: (Check all that apply.)

duplicate a cyber-record of the contract. store a cyber-record of the contract.

The UCC requires parties to a sales contract to act and deal fairly with each other--that is, to act in good ______

faith

The law merchant principles of ______ are incorporated into the Uniform Commercial Code. (Check all that apply.)

integration involvement neutrality universality

The shipping term f.o.b. (place of shipment) indicates that

items will be shipped free to the place of shipment.

Papers that may satisfy the writing requirements of the UCC include a(n): (Check all that apply.)

memorandum. sales slip. informal note. fax.

The Uniform Commercial Code is based on the law

merchant

Goods are: (Check all that apply.)

moveable. tangible. valuable.

When title to a good passed under the law merchant, it signified transfer of: (Check all that apply.)

ownership. risk.

When the parties to a sales contract have dealt with each other before, ______ can be important in interpreting the sales contract.

prior dealings or a course of dealings

A seller may accept a buyer's order (or offer) to purchase goods by a: (Check all that apply.)

prompt shipment of conforming goods. prompt promise to ship conforming goods.

When goods are sold primarily for the buyer's use and they can be returned even though they conform to the contract, the sale is a(n)

sale on approval

Goods that are intended primarily for resale are often sold under a contract called a

sale or return

Identified goods are those that have been

selected as the subject matter of the contract.

Goods must be identified to the contract before the: (Check all that apply.)

seller can transfer risk of loss. risk of loss can transfer to the buyer. title can transfer to the buyer.

A contract where the seller turns over goods to a shipper for delivery to the buyer is a ______ contract.

shipment contract

When a shipment contract does not specify shipping point or destination, it is assumed to be a

shipment contract

The definition of goods excludes:

stocks. bonds. money.

When the seller offers to turn over the goods to the buyer at a specified location, it is called

tender

A document of title is a paper that: (Check all that apply.)

-is given to the one holding the goods to receive possession. -gives the person possessing it the right to receive the goods named in the document. -may be delivered to a buyer instead of the goods themselves.

The UCC requires contracts for the sale of goods of ______ or more to be in writing to be enforceable.

$500

If the seller wants to add an instruction to the shipment contract that the carrier is to retain possession of the goods until the carrier has collected the cost of the goods, the seller would add

C.o.d.

A contract for the sale of goods that cannot be completed within ______ is another example of a contract that must be in writing to be enforceable, regardless of its dollar value.

one year

A(n) ______ price term exists when the parties intend to be bound by a contract; however, they have not settled on a price.

open

Many of the rules found in the UCC relating to the ______ of goods also apply to the lease of goods under Article 2A of the UCC.

sale

The UCC makes an exception to the written contract requirement for an oral agreement between two merchants. When either merchant prepares and sends to the other a written confirmation of the oral agreement, it satisfies the UCC exception so long as

the other merchant does not object in writing within 10 days.

A document of title gives ______ the right to receive the goods named in the document

the person who possesses it

The United Nations Convention on Contracts for the International Sale of Goods (CISG) is similar to the Uniform Commercial Code in many ways; however, it also has some differences. These include that: (Check all that apply.)

there is no requirement for a written contract. it does not hold the seller responsible for death or personal injury caused by the goods. it doesn't address the validity of a contract for the sale of something illegal.

Which of the following may be subject to Article 2A of the UCC when leased? (Check all that apply.)

Furniture Trucks Tools Computers

In a shipment contract, the ______ has the responsibility to see that the goods reach their destination.

buyer

If the seller wants to add an instruction to the shipment contract that the carrier is to collect all fees and charges, except insurance, in one lump sum, the seller would add

c.f.

A contract where one party agrees to pay another party's debt can be referred to as a: (Check all that apply.)

collateral contract. guaranty of payment. guaranty contract.

Contracts for the sale of goods are governed by the Uniform Commercial Code; service contracts are governed by

common law rules

If the parties cannot agree on the price term at the time that a contract is fulfilled, then the price will be established as a reasonable price at the time of

delivery

Documents that are not covered by the E-Sign Act include: (Check all that apply.)

eviction notices. prenuptial contracts. health care cancellation. divorce papers.

If the seller wants to add an instruction to the shipment contract that the carrier is to deliver the goods alongside the vessel or at a dock designated by the buyer, the seller would add

f.a.s.

A(n) ______ is a merchant's signed and written agreement to hold an offer open.

firm offer

Fungible goods are those which

have each unit the equivalent of any like unit.

The shipping term f.o.b. (place of destination) indicates that

items will ship free to the specified destination.

The UCC provides exceptions to the general rule that contracts for the sale of goods of $500 or more, or for the lease of goods of $1,000 or more must be in writing to be enforceable. One exception is for a contract for specially ______ goods

manufactured

Under the UCC, special rules apply to ______--those who deal in goods of the kind sold or who otherwise claim to have special knowledge or skills related to those goods.

merchants

Contracts involving both sale of goods and services are: (Check all that apply.)

mixed contracts. blended contracts. hybrid contracts.

The Uniform Commercial Code adapted very well to the changes in sales contracts involving ______ sales.

online

A rare vase is placed on auction. The auctioneer is instructed to sell the vase for no less than $25,000. What type of auction is this?

with reserve

The UCC applies special rules to merchants. Merchants include those who: (Check all that apply.)

-claim special knowledge or skills related to the product(s) covered by the agreement. -regularly sell the product(s) covered by the agreement.

Certain contracts for the sale of goods of $500 or more must generally be in writing to be enforceable. There are certain exceptions to that rule which include: (Check all that apply.)

-contracts that are executed. -contracts admitted to in court. -oral contracts between merchants, so long as the confirmation is sent and is not objected to. -contracts for goods that are customized.

In a contract that specifies f.o.b. (place of delivery), which of the following are true? (Check all that apply.)

Title transfers to the buyer when goods are tendered at the specified destination. The seller accepts full responsibility for the goods until they are tendered at the destination. Risk of loss transfers to the buyer when goods are tendered at the specified destination. The seller pays all shipping costs.

The Uniform Commercial Code imposes an obligation of good faith in every sales transaction. In addition, ______ can be used to supplement or qualify the terms of a sales contract, unless the parties agree otherwise. (Check all that apply.)

usage of trade course of dealings

______ is the right of ownership to goods.

valid title title