BLAW 310 Chapter 19

For which of the following sale contracts does title and risk of loss remain with the seller until the buyer accepts the goods? 1) A sale on approval 2) A sale or return 3) A bulk sale 4) A sale "FAS [point of origin]"

1) A sale on approval page 520

Toby and Roy are car dealers; Toby makes a deal with Roy to sell a 1978 Buick. However, they failed to reach any agreement regarding the price of the car and decided to leave the matter to a future date to be decided once Toby delivers the car. Which of the following is true about this deal? 1) According to the Code, a reasonable price will be put on delivery. 2) According to the common law, this contract is definite and legal. 3) According to the common law, Roy can sue Toby. 4) According to the Code, it is an illegal contract due to absence of intent.

1) According to the Code, a reasonable price will be put on delivery. page 507 Price terms

In determining the quantity of goods to be produced or taken pursuant to an output or needs contract, the rule of _____ applies. 1) good faith 2) demand 3) supply 4) performance

1) good faith

Which of the following is most likely to be considered a sale of goods to which the UCC applies? 1) A dentist places a crown over a patient's tooth. 2) A gas station sells and installs a new battery in a car. 3) A hairstylist uses a crème rinse in styling a client's hair. 4) A contractor builds a house for a landowner.

2) A gas station sells and installs a new battery in a car.

Frank, a business law professor who has never sold a car before; sells his 1995 Honda Civic to Wanda. This sale is governed by: 1) the common law of contracts. 2) Article 2 of the UCC. 3) Article 2A of the UCC. 4) section 208 of Restatement (Second) of Contracts.

2) Article 2 of the UCC. page 503

Brizon, a toy company enters into a five-year agreement with Toys Paradise (TP), a toy shoppe. The agreement states that Brizon is to provide all the toys required by the distinguished shop at a fixed rate. During the first 3 years of the contract, Brizon uses its excess capacity to meet-up with the anticipated requirements and delivers between 1.25-1.5 million toys to TP. However, in the 4th year of the agreement TP wants Brizon to deliver approximately twice as many toys, so that the toys can be used at other outlets owned by TP. In such a case: 1) Brizon may be sued by TP if it does not comply. 2) Brizon need not provide the required amount of toys. 3) Brizon has to provide the required amount of toys by putting extra charges. 4) Brizon can claim that the contract was always void.

2) Brizon need not provide the required amount of toys. page 507

Which of the following is a transfer of the right to possess and use goods belonging to another? 1) Bailment 2) Lease 3) Deed 4) Easement

2) Lease page 505

Under Article 2 of the UCC, why does it matter whether a party to a contract is a merchant? 1) It is the test for applying Article 2 of the UCC. 2) Merchants sometimes are treated differently than other parties. 3) All contracts in which one or both parties are merchants are handled under Article 2A of the UCC. 4) Article 2 does not concern itself with cases regarding the transactions of goods.

2) Merchants sometimes are treated differently than other parties. Page 505 - Higher standards for merchants

Maple Interiors, located in Boston, contracted to sell and ship sofas to Peach Furniture, located in Atlanta. The contract stated that the goods were to be shipped "F.O.B. Boston, via XYZ railroad". Maple delivered the sofas to XYZ railroad. They were shipped from Boston but never seen again. Both Peach and Maple had assumed that the other party had the risk of loss, so neither had obtained insurance. Who must bear this loss? 1) Peach must bear the loss because the risk passed to it after the sofas were placed on the loading dock at Maple's warehouse. 2) Peach must bear the loss because the risk passed to it after the sofas were delivered to XYZ railroad. 3) Maple must bear the loss because the goods were never tendered to Peach. 4) Maple must bear the loss because in any sale by a merchant, risk does not pass until the actual delivery of the goods to the buyer.

2) Peach must bear the loss because the risk passed to it after the sofas were delivered to XYZ railroad. page 516 FOB shipment

An exception to the general rule is that if goods are entrusted to a merchant who deals in goods of that kind, the merchant has: 1) the power to keep rights to the goods, even if the goods are sold to a buyer. 2) the power to transfer all rights of the entruster to a buyer in the ordinary course of business. 3) no power to sell the goods without the physical presence of the entruster. 4) the power to deprive the entruster from any benefit so caused by the transaction.

2) the power to transfer all rights of the entruster to a buyer in the ordinary course of business. page 515

Which of the following terms in a contract for the sale of goods requires the seller to insure the goods? 1) FOB 2) FAS 3) CIF 4) C & F

3) CIF page 516

Which of the following is true of price terms in a contract? 1) A fixed price term is essential for a binding sales contract. 2) Price terms cannot be determined at a future date. 3) No contract is created if price terms are not agreed on. 4) A contract is void if price terms are omitted.

3) No contract is created if price terms are not agreed on. Not 1, not 2 per page 507. I think 3 is the best in terms of if you are not omitting it then you must agree on price.

Which of the following characterizes an output contact? 1) The buyer must accept whatever amount the seller produces, no matter how large. 2) The buyer must accept a reasonable amount from the seller, but no more. 3) The buyer must accept any amount that is reasonably proportionate to any stated estimate in the contract. 4) The buyer must accept a conscionable amount from the seller, but no more.

3) The buyer must accept any amount that is reasonably proportionate to any stated estimate in the contract. PAGE 507

If a buyer and seller of goods fail to specify in their contract when title is to pass, the UCC's "gap filler" provision provides that title will pass when: 1) the goods are sent to the buyer's home. 2) the contract is formed. 3) the seller completes obligation with respect to physical delivery of the goods. 4) the buyer pays the purchase price.

3) the seller completes obligation with respect to physical delivery of the goods. page 510

Megan has purchased two tickets for a lucky draw at the local supermarket, which are with the store's cashier. Tracy, her fried who knows about this, convinces the cashier that she is Megan and takes the tickets. She then goes and sells the tickets to Anya, who has no knowledge of the case. Which of the following statements is true? 1) Megan has the right to recover the tickets from Anya. 2) Tracy cannot be charged with fraud since she sold the tickets to Anya. 3) The cashier has the 4) Anya is the good faith purchaser.

4) Anya is the good faith purchaser. page 513

Article 2 of the UCC mandates that the parties to a sales contract state in specific and unambiguous language the exact terms of the contract. Otherwise, courts will declare the contract unenforceable. True /False

False

A seller of goods can never pass "better title" to those goods than the title that she has. True /False

False A seller can pass a "better title" than he/she has in the case of a good faith purchase.

Lisa took her computer to ABC Computer Sales and Repair, Inc. ABC mistakenly sold her computer to Rafi. Lisa may successfully sue Rafi for return of the computer. True /False

False page 515 entr4usting of goods

At common law, the risk of loss for shipped goods falls upon the person or party who had "technical title" at the time the goods were damaged or destroyed. True /False

True page 516

A bicycle manufacturer sells 100 bikes to Bill's Bike Shop. The contract says that Bill's may return any bike not sold within six months, and he will be reimbursed for them. Bill's Bike Shop burns down in one week after the delivery of the bikes, which are destroyed in the fire. Bill's bears the risk of loss for the 100 bikes. True /False

True page 520