ACCT 324 Chapter 21

The definition of a merchant under the Uniform Commercial Code (UCC) does not include which of the following?

A seller who sells a variety goods, including the goods that are the subject of the contract

Who has adopted the UCC?

All 50 states, the District of Columbia and the Virgin Islands

Identify the article under which the Uniform Commercial Code (UCC) explains the creation and interpretation of sales contracts

Article 2

of the Uniform Commercial Code (UCC) governs lease contracts.

Article 2(A)

How is the UCC divided?

Into articles

Nora leased a car for the next year from Mr. Ford, the owner of the dealership. The role that each person plays in this arrangement is as follows:

Nora is the lessee and Mr. Ford is the lessor.

Under the Uniform Commercial Code (UCC), which of the following is/are not considered goods?

Real estate

Which of the following statements is true of the Contracts for the International Sale of Goods (CISG)?

The CISG allows this treaty to govern international business-to-business sales contracts.

Which of the following statements is true about the UCC and the CISG?

The CISG requirements for the statute of frauds are more lenient than those under the UCC.

Which of the following is true when Article 2 is silent on issues of sales contract formation or interpretation?

The common law applies unless a state has passed a statutory law regarding contracts.

According to Section 2-105 of the Uniform Commercial Code (UCC), which of the following is a characteristic of goods?

They are tangible.

In a finance lease, the lessor acquires which of the following in connection with the terms of the lease?

Title to the goods or the right to their possession or use

Which of the following is correct regarding trade fixtures and the Uniform Commercial Code (UCC)?

Trade fixtures are considered goods under the UCC

Which of the following is true regarding what meets the UCC definition of a good?

Trade fixtures meet the definition of a good under the UCC, but real estate, corporate stocks, and copyrights do not.

Connor wishes to buy Wayne's art collection. After an hour's discussion, they put the terms on a napkin and signed the napkin. Is this a sufficient method for forming an agreement?

Yes, because contracts for the sale or lease of goods may be made in any manner sufficient to show agreement.

According to the Uniform Commercial Code (UCC), if the price term is left open in a contract for the sale of goods

a "reasonable price" is supplied at the time of delivery

The Uniform Commercial Code (UCC) requires that modifications to a contract must:

be made in good faith

In a(n) ______ lease, the lessor does not select, manufacture, or supply the goods.

finance

According to the Uniform Commercial Code (UCC), real estate cannot be moved, so it is therefore not considered to be a(n):

good

The UCC Section 2A-103(j) defines a _____ as "a transfer of the right to possession and use of goods for a term in return for consideration".

lease contract

The Uniform Commercial Code (UCC) recognizes an exception to the statute of frauds writing requirement for:

specifically manufactured goods

The United Nations Convention on Contracts for the International Sale of Goods (CISG) was offered as a treaty that countries could sign, indicating their willingness to allow:

this treaty to govern international business-to-business sales contracts

Under the UCC, almost any kind of documentation is usually sufficient to satisfy the writing requirement of the statute of frauds.

True

Ernie is a merchant seller of baseball cards. He offers to sell Eric, another dealer of baseball cards, his prized card of Babe Ruth. Ernie put the offer in writing and included the statement that the offer would be good for up to three months. Ernie's offer is:

a firm offer

According to the UCC, merchants will be held to

a higher standard of care and behavior than nonmerchants.

One type of lease agreement, a finance lease, is complicated by the addition of

a third person who plays a separate role from that of the lessor

Sybil had signed a lease agreement for a car, but the dealer required Sybil to pay the cost of the car if she was ever cited for speeding while driving the vehicle. The court felt that this was grossly one-sided and an unconscionable lease agreement. One of the remedies the court may grant is

attorney's fees

With regard to international sales transactions, the CISG:

preempts the Uniform Commercial Code (UCC)

Carla has agreed to sell Lola her old dresser. Although they have agreed to a price, they have not agreed to a delivery date or when payment must be made. Under the Uniform Commercial Code (UCC), the contract is:

formed even if some of the terms are open

For a contract to fall under Uniform Commercial Code (UCC) Article 2, the sale must be for:

goods

Section 2-105 of the Uniform Commercial Code (UCC) defines _____ as "all [tangible] things . . . which are movable at the time of identification to the contract for sale."

goods

A ________blank transfers the right to possess and use goods for a term in exchange for consideration.

lease

Under Article 2(A) of the UCC, a(n) ________blank is defined as a transfer of the right to possession and use of goods for a term in return for consideration.

lease

Jan entered into a contract with Rentals-R-Us, a store which rents out furniture to customers for a rental fee. Jan signed the contract which allowed her to rent living room furniture for the fee of $200 per month. Such a contract is known as a(n):

lease contract

A person who acquires the right to possession and use of goods under a lease is known as a(n)

lessee

A person who transfers the right to possession and use of goods under a lease is known as a:

lessor

Section 2-104(1) of the Uniform Commercial Code (UCC) defines a(n) ______ as "a person who deals in goods of the kind, or otherwise by his occupation, holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction, or to whom such knowledge or skill may be attributed by his employment of an agent or broker or other intermediary who, by his occupation, holds himself out as having such knowledge or skill."

merchant

Article 2 of the Uniform Commercial Code (UCC) assumes that ______ have the ability to look out for themselves.

merchants

The _____ rule states that an offeree's acceptance must be on the exact terms of the offer.

mirror-image

A contract that mixes services with goods is called a(n):

mixed sale

The reason the Uniform Commercial Code (UCC) is significant is because it clarifies sales law and makes this area of the law:

more predictable for businesses engaged in transactions in more than one state

Claudia is selling her laptop computer to Junior for $900.00. Under the UCC, this contract

must be in writing in order to be enforceable

The Uniform Commercial Code (UCC) states that when a written agreement exists that is intended to be a final expression of the parties intentions in the contract,

neither party can provide additional evidence that alters or contradicts the written contract

The Uniform Commercial Code (UCC) requires that, under the statute of frauds, leases for goods must be in writing when the lease contract

requires payments of $1,000 or more

According to Section 2-106(1) of the Uniform Commercial Code (UCC), a(n) ________ consists of the passing of title from the seller to the buyer for a price.

sale

When determining whether a contract falls under Article 2 of the Uniform Commercial Code (UCC), one must first determine if the:

sale is for goods and then determine if the contract is predominantly for the sale of those goods.

The Uniform Commercial Code (UCC) covers a wide range of topics, including:

sales contracts and secured transactions

The formation of sales and lease contracts is governed by:

state laws

Sales and lease contracts are governed by:

state laws which are based on the adoption of the Uniform Commercial Code (UCC)

Section 2-106(1) of the Uniform Commercial Code (UCC) states that a sale consists of the passing of title from the seller to

the buyer for a price

Asha, who has a dress shop, reached an oral agreement with Kim, a wholesaler, to purchase 100 dresses for $80 each, with the dresses to be delivered within 30 days. Kim later orally agreed to a modification whereby she would add ten belts to go along with certain dresses at no extra charge. Kim did so because she wanted to maintain Asha's good will. Asha sent Kim a memo confirming their oral agreement, including the modification, but heard nothing. When the dresses did not arrive within 30 days, Asha checked with Kim. Kim told her that their agreement was no good because Kim never signed anything and that the UCC does not apply in the retail arena. Which of the following is true regarding Kim's statement that the UCC does not apply in the retail arena?

Kim is incorrect.

Which of the following aims to protect sales or lease contracts that the parties intend to be the final expression of their agreement?

Parol evidence rule

Russell rented some construction equipment from Mr. Phillips to finish the construction of his garage. Who is the lessor and who is the lessee?

Russell is the lessee and Mr. Phillips is the lessor.

Uniform Commercial Code (UCC) Article 2 pertains to anyone buying and selling goods, but the UCC distinguishes merchants from regular buyers and sellers by having provisions that

(1) only apply to merchants; and (2) impose greater duties on merchants

Article ______ of the Uniform Commercial Code (UCC) applies to mixed sales if the goods are predominant part of the transaction.

2

Laws regarding the sale of goods are found in Article ________blank of the UCC.

2

Article 2 of the Uniform Commercial Code (UCC) governs sales contracts, while lease contracts are governed by Article

2(A)

Under Uniform Commercial Code (UCC) Section ______, additional terms will not negate acceptance unless acceptance is made expressly conditional on assent to the additional terms.

2-207(1)

Under the Uniform Commercial Code (UCC), contracts for the sale of goods must be in writing if they are valued at $_____ or more.

500

For contracts involving a sale of motor vehicles, which of the following individuals will be held to a higher standard of behavior under the Uniform Commercial Code (UCC)?

A dealer of pre-owned cars

Sarah just bought a new refrigerator and the contract specified that along with the refrigerator, the installation of the appliance would be done upon delivery. According the mixed goods analysis, which part of the Uniform Commercial Code (UCC) would apply to Sarah's contract?

Article 2, since the predominant part of the contract is the sales of goods

Article 2A of the Uniform Commercial Code (UCC) governs which of the following areas?

Contracts for the lease of goods

Which of the following is correct regarding the rules for transactions under the Uniform Commercial Code (UCC)?

Merchants are generally held to a higher standard of care and behavior than nonmerchants.

which of the following items is not treated as a good under the UCC?

Minerals or soil removed by the purchaser

The Uniform Commercial Code (UCC) was created by the:

National Conference of Commissioners on Uniform State Laws and the American Law Institute

A court was asked to interpret a contract between two merchants regarding the sale of farming equipment. The court examined previous transactions of the parties and the way in which other merchants in the same business usually conduct business. Mr. Schnell, one of the merchants, objected to this, saying that the court could not use that information to interpret this contract. Is Mr. Schnell correct?

No, the court is entitled to use this information to interpret the contract.

Which section of the Uniform Commercial Code (UCC) defines the term "merchant?"

Section 2-104(1)

What are the UCC's exceptions to the statute of fraud's writing requirements?

Specifically manufactured goods, admission, and partial performance.

The Uniform Commercial Code (UCC) is intended to do which of the following?

The UCC is intended to allow each state to rewrite parts of the UCC to reflect the wishes of its state legislature.

Greg discovered that his yard contained a vein of silver running through it. Greg managed to mine some of the ore and sell it to a silversmith. Is the contract for the ore governed by the UCC or the common law?

The contract is governed by the UCC Article 2, since the ore was taken from the ground and sold as a good.

Which of the following is a legal concept that aims to protect sales or lease contracts that the parties intended to be the final expression of their agreement?

The parol evidence rule

According to the Uniform Commercial Code (UCC), if a firm offer is silent as to time, the:

UCC assumes a three-month irrevocability period

The Uniform Commercial Code (UCC) states that when a written agreement exists that is intended to be a final expression, then neither party can provide ______ evidence that alters or contradicts the contract.

additional/parol

Under the Uniform Commercial Code (UCC), contracts for the sale or lease of goods may be made in any manner sufficient to show:

agreement

The Uniform Commercial Code (UCC) has been adopted by:

all fifty states, the District of Columbia, and the Virgin Islands

Any contract or provision in a contract that is so unfair that a court would be unreasonable if it enforced the contract is

an unconscionable contract

Under the Uniform Commercial Code (UCC), contracts for the sale or lease of goods may also be formed even though some terms of the contract:

are left open

______ of the UCC defines goods as tangible things which are movable at the time of identification to the contract for sale.

article 2

Under the Uniform Commercial Code (UCC), an acceptance may be made:

by any reasonable means of communication

A mixed sale refers to a contract that:

combines a good with a service

Under _____ law, the statute of frauds requires all material terms be in writing.

common

A lease that: (1) has a value of $25,000 or less; and (2) exists between a lessor who is regularly engaged in leasing or selling goods and the offeree who is leasing the goods primarily for home use is known as a(n):

consumer lease

Article 2 of the Uniform Commercial Code (UCC) covers:

contracts for the sale of goods

According to the Uniform Commercial Code (UCC), if the quantity term is left open in a contract for the sale of goods

courts generally have no basis for determining a remedy

Under the Uniform Commercial Code (UCC), an acceptance is effective upon:

dispatch

Under the Uniform Commercial Code (UCC), the mirror-image rule

does not apply

In an international sale of goods, if a problem arises with the contract, the Uniform Commercial Code (UCC):

does not provide guidance in the litigation

If a court finds that a contract provision or the contract as a whole was unconscionable when made, the court can:

either enforce the other provisions that are fair or refuse to enforce the contract

Justin went to court and contended that his automobile sales contract was unconscionable due to the high penalties for nonpayment. The court agreed with Justin that the penalties for nonpayment were unconscionable, but it found that all of the other material terms of the sale were proper. The court may choose to:

enforce the provisions of the contract that the court deems as being fair

Under Uniform Commercial Code (UCC) Section 2-207(1), additional terms will not negate acceptance unless acceptance is made:

expressly conditional on assent to the additional terms

When a lessor does not select, manufacture, or supply the goods, but acquires title to the goods or the right to their possession, this is known as a

finance lease

items attached to real estate that are used for business activities are known as trade:

fixtures

A merchant in Denmark entered into a contract for the sale of goods with a merchant in Italy. Assuming that both countries are parties to the United Nations Convention on Contracts for the International Sale of Goods (CISG), any dispute over that contract would be:

governed by the terms in the CISG

According to the Uniform Commercial Code (UCC), merchants are held to a(n) ______ standard of care and behavior compared to non-merchants.

higher

Which of the following statements is true about the Uniform Commercial Information Transactions Act (UCITA)?

in 2001, Virginia became the first state to enact UCITA, probably because major Internet-related companies are headquartered in Northern Virginia.

Gene is a seller of men's clothing. He placed an order with his supplier for $550 worth of ties. Gene called in his order to his supplier, Maxwell, and verbally placed the order. Under the Uniform Commercial Code (UCC), this type of contract is required to be

in writing

Regarding the statute of frauds, the CISG:

is more lenient than the UCC

A court was reviewing a sales contract that contained the following phrase: "If delivery of specified goods is delayed by one day, the seller will pay one million dollars in compensation to the buyer". The purchase price of the goods is $3,000. The court refused to enforce the compensation provision because:

it is unconscionable

Under UCC Section 2-205, offers made by merchants are considered firm offers if the offer is (1) made in writing and (2) gives assurances that the:

offer will be irrevocable for up to three months, despite a lack of consideration for the irrevocability

Certain terms of a contract under Article 2 and Article 2A of the Uniform Commercial Code (UCC) may be left ________blank provided that certain material terms of the contract are included.

open

The ______ evidence rule attempts to protect sales or lease contracts that the parties intended to be the final expression of their agreement.

parol

The Uniform Commercial Code (UCC) includes a partial performance exception to the statute of frauds where an oral sales or lease contract is enforceable to the extent that:

payment has been made and accepted or goods have been received and accepted

Scott and Stephen were in court for breach of a sales agreement. Some of the language of the contract was not clear. The parties offered additional terms to the court to clarify the meaning of the sales agreement. This is:

permissible under the parole evidence rule

The Uniform Commercial Code (UCC) recognizes an exception to the statute of frauds when parties admit that a sales or lease contract was made. This means that if there was an oral agreement for the sale or lease of goods and the defendant were to admit the parties had a contract between them,

the defendant could not use the statute of frauds to prevent enforcement of the oral contract

Items taken from real estate may be treated as goods if

the owner takes the items out of the ground and then sells them to the buyer

According to the Uniform Commercial Code (UCC), if the delivery term is left open in a contract for the sale of goods

the place for delivery is the seller's place of business

Most states resolve contract issues that mix goods and services by using a test known as:

the predominant-purpose test

The CISG covers:

the same general topics as the UCC

Under the Uniform Commercial Code (UCC) parole evidence rule, courts allow parties to explain or supplement the written contract with:

the way others in a specific place, vocation, trade, or industry usually conduct business the way the parties have acted in past transactions additional terms that are consistent with the terms in the agreement evidence that helps the court interpret the agreement, including previous conduct of the parties regarding the contract in question

Under Uniform Commercial Code (UCC) Section 2-205, offers made by merchants are considered firm offers if the offer: (1) is made in writing; and (2) gives assurance that it will be irrevocable for up to Blank______ despite a lack of consideration for the irrevocability.

three months

One remedy to consumers who sign lease agreements is to receive attorney fees if the court decides that the lessor has subjected the consumer to a(n):

unconscionable lease