Chapter 11 - Sales and Lease Contracts

Under the UCC, a sale is the passing of title from a seller to a buyer for a price. True False

True

Under the UCC, good faith means honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade. True False

True

Under the UCC, parties to sales and lease contracts are free to establish whatever terms they wish. True False

True

A lessor is a party who acquires a right to the possession and use of goods under a lease. True False

False

A merchant's firm offer is revocable at any time before acceptance. True False

False

According to the UCC, one open term will cause a sales contract to fail for indefiniteness. True False

False

Goods associated with real estate never fall within the scope of UCC Article 2. True False

False

Under the UCC, if a contract for a sale of goods does not specify the quantity, a court will objectively determine what is a reasonable quantity. True False

False

If the parties to a contract for a sale of goods have not agreed on a price, a court will determine a reasonable price at the time of delivery. True False

True

To be characterized as a "good" under the UCC, an item of property must be movable. True False

True

Brian, an agent for Clarion Motors, Inc., writes a letter to Dina on November 1 stating that he will sell her a 2016 Subaru Outback for $20,000 between November 1 and December 31. Brian's letter to Dina is c. an option contract. d. none of the choices. a. a merchant's firm offer. b. an acceptance.

a. a merchant's firm offer.

Omni Metals Company and Piecework Fabrication, Inc., enter into a contract under which Omni agrees to deliver a certain quantity of sheet metal to Piecework each month. The contract does not include a price term. In a suit between the parties over the price, a court will c. impose the highest market price. d. return the parties to the positions they held before the contract. a. determine a reasonable price. b. impose the lowest market price.

a. determine a reasonable price

Expert Stitching Corporation enters into a contract to sell denim clothing to Fine Fashion Company, which in turn sells a pair of jeans to Grady, a consumer. In contrast to standards that apply to consumers, the UCC imposes on merchants d. the same overall standards. c. stricter ethical standards. b. special business standards. a. less strict legal standards.

b. special business standards.

Bram buys a bulldozer from Construction Equipment Corporation, which he leases to Earth Movrs, Inc. In this situation, the lesse is a. Bram. d. none of the choices. b. Construction equipment Corporation. c. Earth Movers Inc.

c. Earth Movers Inc.

Refined Grains, Inc., agrees to sell to Sunny Cereal Company a certain quantity of refined oats each week but no mention is made of where the goods are to be delivered. In general, the UCC requires that the delivery take place at b. a "reasonable" of delivery. d. Sunny's place of business. a. a neutral place of business halfway between the parties' locations. c. Refined's place of business.

c. Refined's place of business.

Marine Expeditions, Inc., pays Nate's Boats $4,000 to use an oceangoing vessel for a month. For the purposes of the UCC, this is d. a sale. a. a merchant's firm offer. b. an option contract. c. a lease.

c. a lease.

Car n' Truck Body & Paint Company orders custom paint from Diverse Hues Inc., but Diverse does not deliver. Car n' Truck will probably be unable to enforce the agreement if the parties omitted a. a price term. b. a delivery date. c. a quantity term. d. shipping arrangements

c. a quantity term.

Lexi pays Mobile Edge Electronices $600 and receives a new phone. Under the UCC, this is a. a merchant's firm offer. d. a requirements contract. c. a sale. b. a lease.

c. a sale

Josefina owns a condominium that she leases to Katrina. Josefina gives her daughter Lucia $450 on her sixteenth birthday. Josefina sells her car to her neighbor Maria for $1,500. UCC Article 2 covers c. the sale to Maria. b. the gift to Lucia. a. the lease with Katrina d. all of the choices.

c. the sale to Maria.

Bert sells his car to Conrad for $5,000 and his bike to Del for $600. Bert sells his vinyl record collection to Elena for $1,000 and his stock in Altogether Now, Inc.—a firm that markets an app for organizing digital music files—to Franz for $4,000. UCC Article 2 covers all of these transactions except the sale of c. the record collection. d. the stock. a. the car. b. the bike.

d. the stock.