SCM CH 15
According to the UCC, which of the following is not one of the buyer's rights? a. Reject defective goods that the seller cannot repair within a reasonable time. b. Unilaterally cancel a purchase contract for any reason. c. Revoke acceptance of goods if the buyer discovers defects. d. Sue for breach of contract. e. Retain the right to recover costs and expenses caused by a breach of warranty.
B
The doctrine of _____ holds that if one or more parties made a promise, even orally, he or she cannot renege on that promise if the other party acted on reliance on the promise. a. caveat emptor b. promissory estoppel c. anticipatory breach d. consideration e. None of the above.
B
Which of the following is false regarding the acceptance and rejection of goods? a. Once the purchaser accepts the goods, there is only one recourse - to make a claim against the supplier. b. The purchaser has the right to send the rejected goods back even if the supplier does not consent to this action. c. The UCC specifies that the purchaser does not have the legal right to withhold payment from the supplier once acceptance has been made. d. Purchasers have a legitimate right to inspect contracted goods before accepting or rejecting them. e. A purchaser may revoke a prior acceptance if a problem is discovered that substantially impairs the value of the goods.
B
_____ is that level of authority perceived by the seller to be available to the purchasing manager. a. Actual authority b. Apparent authority c. Consideration d. Personal liability e. Transparent authority
B
_____ essentially determines the nature of agreements that are enforceable and create legal rights between the parties. a. Agency law b. Contract law c. Civil law d. Litigation e. None of the above.
B
_____ involves the buyer seeking a court order forcing the seller to deliver the goods. a. Arbitration b. Specific performance c. An implied warranty of merchantability d. An express warranty e. None of the above.
B
_____ is money the plaintiff actually paid to the defendant in connection with the contract. a. Reliance b. Restitution c. Expectancy d. Due diligence e. None of the above.
B
A/An _____ is a person or entity who has been authorized to act on behalf of some other person or entity. a. principal b. manager c. agent d. employee e. sales representative
C
A/An _____ provision stipulates the mechanism to be used in determining any costs and damages to the injured party in the event of a breach of contract. a. mutual assent b. restitution c. liquidated damages d. reliance e. expectancy
C
Betty goes into Mimi's Wholesale Video Store and says to Mimi, "I want to buy 500 DVDs of the Last Vegas movie from you. I will pay you $10 for each DVD." This is an example of [a/an] _____. a. acceptance b. breach c. offer d. due diligence e. conditional offer
C
On _____, the freight bill is presented on the effective day of the shipment. a. FOB origin shipments b. collect shipments c. prepaid shipments d. FOB destination shipments e. None of the above.
C
[The] _____ refers to the supplier's guarantee that the goods being exchanged do not illegally violate another party's patent protection. a. Warranty of title b. Express warranty c. Warranty of infringement d. Implied warranty of fitness for use e. Implied warranty of merchantability
C
_____ is defined as that body of the law that refers to how business firms (parties) enter into contracts with each other, execute contracts, and remedy problems that arise in the process. a. Civil law b. Agency law c. Commercial law d. All of the above. e. None of the above.
C
If the carrier has refused to pay a freight claim, then the claimant has _____ from the time the claim was disallowed to file for legal relief in the courts. a. 10 days b. 1 month c. 2 years d. 10 years e. There is no time limit for pursuing freight claims in the courts.
C
In order to be valid, freight claims must be filed within _____ of the date of actual or reasonable date of delivery. a. 10 days b. 30 days c. 9 months d. 2 years e. There is no time limit for filing freight claims.
C
_____ are those expenses incurred by the purchaser because the goods were not delivered when expected or as specified. a. Incidental damages b. General damages c. Consequential damages d. Specific damages e. None of the above.
C
_____ indicates that the supplier is responsible for transportation, and the purchaser assumes title of the goods at his or her own shipping dock. a. F.O.B. origin b. F.O.B. shipping point c. F.O.B. destination d. F.O.B. carrier e. None of the above.
C
A/An _____ is a set of promises between two or more parties the performance of which the law expects, the breach of which the law provides remedies. a. offer b. agreement c. acceptance d. contract e. breach
D
A/An _____ is designed to afford protection for persons who create original works, such as books, software, songs, and films. a. patent b. trademark c. trade secret d. copyright e. None of the above.
D
In its most basic form, a _____ is defined as a promise or representation made by the seller, which, if necessary, can be legally enforced. a. statement of fact b. verbal agreement c. verbal agreement d. warranty e. buyer's right of rejection
D
Which of the following is a rule of ethical behavior in purchasing? a. Buyers must commit their attention and energies for the organization's benefit rather than personal enrichment at the expense of the organization. b. A buyer must act ethically toward suppliers or potential suppliers. c. Buyers must uphold the ethical standards set forth by both their organization and the purchasing profession. d. All of the above. e. None of the above.
D
Which of the following is not a category of contract cancellation? a. Cancellation for default. b. Cancellation for convenience of the purchaser. c. Cancellation by mutual assent. d. Liquidated damages. e. Liquidated damages.
D
Which of the following is not one of the essential elements to an enforceable contract? a. Offer. b. Acceptance. c. Consideration. d. Due diligence. e. None of the above.
D
_____ deals with the role of managers as individual representatives acting on behalf of their organizations. a. Contract law b. Civil law c. Mediation d. Agency law e. None of the above.
D
_____ essentially indicates that the supplier warrants that it has ownership of the goods and that they are not stolen or subject to any security interest or liens. a. Warranty of infringement b. Implied warranty of merchantability c. Implied warranty of fitness for use d. Warranty of title e. None of the above.
D
_____ is money the plaintiff was hoping to gain from the contract. a. Reliance b. Restitution c. Restitution d. Expectancy e. None of the above.
D
_____ refers the standard terms and conditions that are usually preprinted on the back of forms used by the purchaser (and the seller). a. RFQ b. PO c. RFI d. Boilerplate e. None of the above.
D
_____ essentially describe who is responsible for the selection of a carrier, payment of the freight bill, and the method in which the title of goods passes between the purchaser and the supplier. a. Freight bills b. Bills of lading c. Prepaid shipments d. Collect shipments e. Delivery terms
E
_____ include expenses reasonably incurred in inspection, receipt, transportation, and the care and custody of goods appropriately rejected by the purchaser. a. General damages b. Consequential damages c. Specified damages d. Freight claims e. Incidental damages
E
_____ is something of value in the formation of the contract that gives it legal validity. a. Apparent authority b. Actual authority c. Implied authority d. Acceptance e. Consideration
E
_____ stems from the instructions and granting of authority to the purchasing manager via the job description provided by the employer. a. Apparent authority b. Fiduciary responsibility c. Mutual assent d. Personal liability e. Actual authority
E
T/F: Cancellation by mutual consent indicates that the cancellation of a previously agreed-upon contract automatically leads to legal action.
false
T/F: Contracts between two or more parties do not allow the shifting of risk between the entities and do not constitute the foundation and fabric for every type of supply chain relationship.
false
T/F: Either buyers or sellers can arbitrarily cancel or default on their contracts with impunity
false
T/F: From a legal perspective, purchasing managers do not have a fiduciary obligation to act in the best interests of their employer.
false
T/F: Generally, honest mistakes by a single party to the contract will void the contract.
false
T/F: If the terms of the buyer's purchase order and the supplier's acceptance or acknowledgement conflict, all of the terms of both the purchase order and the acceptance become part of the resulting contract including the conflicting terms and conditions.
false
T/F: In agreeing to perform the purchasing duties for the employer, purchasing managers imply that they will never make a mistake.
false
T/F: Price fixing, dividing territories among competitors, and agreements that limit the supply of a commodity are violations of the Foreign Corrupt Practices Act.
false
T/F: Purchasing managers cannot be held personally liable for their damaging and illegal activities even if they perform them with the authority of their firm.
false
T/F: Since people make agreements every day, every agreement can be considered a contract.
false
T/F: Suppliers seldom attempt to influence the decisions of supply professionals.
false
T/F: The Federal Trade Commission Act makes price discrimination illegal and prohibits sellers from exclusive arrangements with purchasers or product distributors.
false
T/F: The UCC allows the purchaser to only reject the entire shipment for cause.
false
T/F: The costs and penalties for patent infringement are so mild that most standard purchasing agreements do not contain an appropriate patent indemnification clause.
false
T/F: The laws of contracts are concerned with governing the relationship of principals and agents
false
T/F: The use of force or coercion to reach an agreement is acceptable in signing a contract, because both parties do not have to enter into the agreement on their own free will.
false
T/F: Under the UCC, the risk of loss is with the buyer until the title passes to the seller.
false
T/F: When the contract is reduced to writing, the written document itself is the actual contract and not simply hard evidence of the existence of the underlying contractual relationship.
false
T/F: When the goods delivered by the supplier are actually rejected by the purchaser because of nonconformance, the purchaser must provide notice to the supplier within 24 hours.
false
T/F: Contractual mistakes are covered under the UCC.
false
T/F: In most cases, the sales representative is a general agent who can solicit orders and change price, terms, or conditions as well.
false
T/F: It is illegal for sellers to exaggerate the merits of their products during their sales pitch.
false
The _____ is an attempt by the United Nations to facilitate international trade by removing legal barriers. a. U.C.C. b. CISG c. FCPA d. FTCA e. UNICEF
B
On _____, the freight bill is presented on the effective day of delivery. a. prepaid shipments b. FOB origin shipments c. FOB destination shipments d. collect shipments e. all shipments, regardless of terms
D
T/F: A firm should not encourage suppliers to report instances of unethical behavior by anyone within the buying firm
false
T/F: Accepting a supplier's outside gifts and favors in exchange for special treatment is not a form of corruption.
false
T/F: Because the UCC calls for full compensation for a party that is a victim of breach of contract, attorneys' fees are collectible.
false
T/F: Copyright law requires a formal application, as does patent law
false
_____ indicates that the purchaser is responsible for payment of transportation costs and assumes title of the goods at the supplier's shipping dock. a. F.O.B. origin b. F.O.B. delivered c. F.O.B. carrier d. F.O.B. intermediate storage point e. F.O.B. destination
A
_____ takes place when the offeree incurs a legal detriment in response to the offeror's offer. a. Consideration b. Acceptance c. Rejection d. Anticipatory breach e. None of the above.
A
According to the UCC, any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain creates a/an _____ that the goods shall conform to the affirmation or promise. a. implied warranty b. express warranty c. general warranty d. warranty of merchantability e. warranty of title
B
After the point of acceptance, the supplier's rights _____ and the purchaser's rights _____. a. increase....decrease b. increase....increase c. decrease....increase d. decrease....decrease e. There is no change in either sets of rights before or after the point of acceptance.
A
All of the following are requirements to receive trade secret protection under law except _____. a. almost every one outside the company is aware of it b. the organization must take steps to minimize or preclude the distribution of sensitive information c. it is economically valuable d. it is not generally known e. it is kept as a secret
A
The _____ describes the origin of the shipment, provides specific directions for the carrier, delineates the transportation contract terms, and functions as a receipt for the shipment. a. bill of lading b. implied warranty of transportation c. freight bill d. acknowledgment e. implied warranty of merchantability
A
The _____ is typically considered a _____ for the buying firm. a. purchasing manager/buyer.....general agent b. sales representative.....general agent c. purchasing manager/buyer.....special agent d. All of the above. e. None of the above.
A
The implied warranty of _____ means when the seller at the time of contracting has reason to know of any particular purpose for which the goods are required, and the buyer is relying on the seller's skill or judgment to select or furnish suitable goods. a. fitness for use b. merchantability c. express warranty d. general warranty e. warranty of infringement
A
Under the UCC, [the] _____ applies to contracts for goods worth more than $500 or any contract that cannot be fully performed in one year. a. Statute of Frauds b. FCPA c. Clayton Act d. boilerplate e. CISG
A
When a non-agent, such as a maintenance supervisor, engineer, or finance analyst makes a commitment with a supplier, this is termed _____. a. implied authority b. actual authority c. apparent authority d. limited authority e. None of the above.
A
Which of the following is falseregarding the risks of unethical behavior by a purchaser? a. The buyer pays too little for a purchased good or service. b. Unethical behavior presents a personal risk to a buyer's reputation. c. buyer who performs an unethical act runs the risk that the act is also illegal. d. Sellers quickly become aware of buyers who are open to offers "on the side." e. A buyer who makes purchase decisions based on factors other than legitimate business criteria risks the reputation of the entire firm.
A
_____ are equal to the difference between the value of the purchased goods at the time of delivery and the goods' value at the time of specified delivery. a. General damages b. Consequential damages c. Liquidated damages d. Incidental damages e. Specified damages
A
_____ can be defined as failure of one of the parties to live up to the terms and conditions of the contract. a. Cancellation for default b. Cancellation for convenience of the seller c. Cancellation for convenience of the purchaser d. Cancellation by mutual assent e. None of the above.
A
A/An _____ is a proposal or expression by one person that he or she is willing to do something for certain terms. a. consideration b. habeas corpus c. acceptance d. clause e. offer
E
Rather than change existing contract law, in 1999 the _____ adapted existing "paper and pencil" concepts to the electronic age, meaning that it makes electronic records equivalent to written documents and electronic signatures similar to handwritten signatures for legal purposes. a. UCC b. Supreme Court c. HSPD-12 d. RFI e. UETA
E
Which of the following is not one of the benefits that the UCC provides to buyers? a. If a seller makes an offer in writing, the seller has to live up to it for the period of time stated. b. Verbal agreements, when confirmed in writing and if no objection is made, are valid. c. The conflict between a buyer's purchase order terms and a seller's acknowledgement terms will generally be resolved according to the two firms' prior conduct. d. As far as warranties are concerned, the purchasing manager can legally rely on the supplier to provide the item needed to do the job. e. None of the above.
E
_____ is money the plaintiff lost because he or she was relying on the contract, depending on the defendant to live up to his or her obligations under the contract. a. Expectancy b. Restitution c. Due diligence d. Mutual assent e. Reliance
E
_____ occur[s] when either party fails to perform the obligations due under the contract (without a valid or legal justification). a. Damages b. Cancellation c. Restitution d. Expectancy e. Breach of contract
E
_____ are those that result if the terms of the contract are not fulfilled and must be defined prior to the breach under the terms of the contract. a. Consequential damages b. General damages c. Incidental damages d. Reliance damages e. Liquidated damages
E
T/F: A breach of contract may entitle the offended party to certain remedies or damages
true
T/F: A contract can exist only when there is an agreement resulting from both an offer and an acceptance.
true
T/F: A good rule of thumb is to remember that purchasers must always act in the best interests of their employer.
true
T/F: A purchase order can be an offer, acceptance, or counteroffer, depending on the circumstances.
true
T/F: Acceptance of the contracted goods by the purchaser means that ownership of the goods has been transferred
true
T/F: Accepting gifts and favors from a supplier is the most common ethical infraction involving buyers.
true
T/F: Buyers should avoid the practice of routinely tolerating suppliers that breach purchase contracts because doing so may result in the buyer forfeiting the right to legal action.
true
T/F: Copyright is automatically assumed
true
T/F: Ethics have their basis in the field of philosophy and identify common principles associated with appropriate versus inappropriate actions, moral duty, and obligation
true
T/F: Exceeding both actual and apparent authority can have dire consequences; an individual may be held directly liable by the supplier or other third party.
true
T/F: Executive management sets the ethical code of behavior within a firm.
true
T/F: For the most part, the UCC is a "gap filler" and is only pertinent if the parties themselves do not supply a contract term, or the term is left open.
true
T/F: If both parties mutually agree to terminate the contract, then they have, in effect, created another contract with the intent of nullifying the first agreement.
true
T/F: If the primary purpose of the contract is legal, but some terms contained within the contract are not, then the contract may or may not itself be illegal depending on the seriousness of the illegal terms and the degree to which the legal and illegal terms can be separated.
true
T/F: In order for a firm to recover lost profits in a breach of contract, the firm must produce credible evidence that it would have made such profits.
true
T/F: Inventors seeking to expand their patent protection to other countries must file appropriate patent applications in each country in which protection is desired.
true
T/F: Purchasing activities are concerned with the laws regarding contracts and the laws regarding agency, the majority of which concern contract laws.
true
T/F: The concept of damages in the UCC is based on the remedy of a party being "made whole."
true
T/F: The purchasing agency relationship is created between the employer and employee when the company hires an individual to perform the purchasing job.
true
T/F: The purchasing agent is a general agent with broad authority to change prices, terms, and conditions.
true
T/F: Unless the parties specify differently, the term "FOB" delineates the point at which the supplier is responsible for freight charges and where the purchaser assumes title to the shipment.
true
T/F: Resources as diverse as formulas, supplier and customer lists, procedures, and training programs could all be regarded as trade secrets.
true
