Quiz 1 - Sales/Lease Contracts

Natural Eggs, Inc. agrees to supply Omelet Express with five hundred eggs. Natural Eggs can not reasonably ask Omelet Express to pick up the eggs at

2:00 a.m.

Manufacturing Corporation orders twelve safety videos from Productions, Inc., which delivers the videos. This is most likely

A sale of goods.

A buyer's failure to cover will bar him or her from using any other remedies available under the UCC.

False

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

False

The term cure refers to the right of the buyer to reject, adjust, or replace nonconforming goods.

False

Under the "partial performance" exception to the UCC, an oral contract for goods worth more than $500 is enforceable if the goods are designed to partially perform a specific function.

False

Under the UCC, a seller's tender of goods that does not conform in every way to a contract ("perfect tender") is still a valid tender.

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.

False

Under the UCC, there are no exceptions to the perfect tender rule.

False

The United Nations Convention on Contracts for the International Sale of Goods (CISG) is the uniform international sales law of countries that account for more than two-thirds of all global trade.

True

The doctrine of commercial impracticability only extends to problems that are unforeseen.

True

The principle of good faith applies to both parties to a sales contract.

True

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

True

Under the UCC, an offeror must be notified within a reasonable time that the offeree has accepted.

True

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

True

Until the time for performance under a contract expires, the seller has a right to cure.

True

Quinn enters into a series of agreements with Reba involving a sale of a Suite Dreams Motel, including the land, building, furnishings, shares of stock in Suite Dreams Company, and a contract with Trudy to create an ad campaign. Reba suspects that Quinn may be misrepresenting the facts. The UCC Statute of Frauds governs

the sale of the furnishings priced at $500 or more.

Dairy Goods agrees to sell a certain quantity of ice cream to Event Caterers, but their contract does not specify the address at which the goods are to be delivered. If the parties fail to specify the address before the delivery date

the seller is excused for any resulting delay.

Rice River Farms offers to sell Sensei Sushi Restaurants, Inc., five hundred bushels of rice. Sensei responds, "We agree to buy five hundred bushels only if the rice is Grade A quality." This statement is

​a counteroffer.

Pavers Inc. contracts to buy some heavy equipment from Earthmovers, Inc. Before either party performs, Earthmovers sells its assets to Excavation Corporation. On learning of the sale, Pavers is concerned about its contract with Earthmovers. Pavers should

​demand assurances of performance from the seller.

Field Farms and Gourmet Restaurant enter into a contract for a sale of produce. After Field Farms ships the lettuce but before the restaurant receives it, the buyer declares bankruptcy. The seller can stop delivery of the goods in transit

​regardless of the quantity.

H2O Company contracts to sell pumps, tanks, and water storage systems to In-Flo Irrigation, Inc. Before the goods are delivered, In-Flo indicates that it will not be able to pay. H2O can

​resell the goods and recover any damages from the buyer.

Downtown Contractors LLC and Equipment Rental Corporation are parties to an oral agreement for a one-year lease of a crane with payments totaling more than $10,000. They may satisfy the Statute of Frauds by

​setting out the terms in a memo.

Toro, S.A., which is based in Mexico, enters into a contract for the purchase of portable livestock fencing from United Fencing Company, which is based in the United States. This contract is governed by

​the United Nations Convention on Contracts for the International Sale of Goods.

A buyer who rightfully rejects nonconforming goods may obtain cover or cancel the contact, but may not seek damages.

False

For an item to be characterized as a "good" under the UCC, it must be intangible.

False

Goods associated with real estate that are severed from the land never fall within the scope of UCC Article 2.

False

Intangible property has conceptual existence and thus comes under Article 2.

False

Talk, Inc., offers to buy from Ultra Corporation 1,000 smartphones. Without notifying Talk, Ultra timely ships phones of a different quality. With respect to the offer and a possible contract, this shipment is an acceptance and

A breach

A contract for the sale of minerals is considered to be a contract for the sale of goods if the severance is to be made by the seller.

True

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

True

Acceptance of goods precludes the buyer or lessee from exercising the right of rejection.

True

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

True

If a buyer breaches a contract, the seller can choose to simply cancel the contract.

True

If a lessee breaches a contract, the lessor can cancel the contract.

True

If goods identified to a contract are destroyed through no fault of either party, both parties are excused from performance.

True

In the absence of any specific agreements, the buyer or lessee must make payment after receipt of the goods.

True

Tender must occur at a reasonable hour and in a reasonable manner.

True

Minerals Ltd. contracts to provide several manufacturers with tin. When a cartel of tin-producing countries suddenly embargoes future shipments of tin to Minerals so that it cannot fulfill its contracts, the distributor

is excused from the performance of its contracts.

Coffee Roasters, Inc., sells whole bean and ground coffee to Delicioso Deli under an existing six-month contract. When the cost of coffee beans increases after two months, Delicioso agrees to a price increase, but later wants to cancel the contract. Delicioso may

not cancel the contract.

Steel Buildings, Inc., agrees to sell four portable garages to Truck Service Center. Five days later, the buyer refuses delivery and cancels the contract. The seller is entitled to

resell the garages and recover any damages from the buyer.

On July 10, Pet Supply Store orders fifty small dog collars from Quality Collars, Inc. to be delivered by July 15. On July 13, Quality Collars tenders fifty large dog collars. Pet Supply rejects the shipment. Quality Collars has

until July 15 to cure.

Great Harvest Farms offers to sell Hearty Bakeries, Inc., fifty bushels of wheat. Hearty's representative Ilene responds, "We agree to buy fifty bushels only if the wheat is Grade A quality." Between Great Harvest and Hearty Bakeries

​Ilene's statement is not an acceptance.

Jack sells a grand piano to Kyle for $5,000 and a gold ring to Lauren for $999. A writing is required to enforce the sale of

​the piano and the gold ring.