Business Law Chapter 19

A "sale" of goods happens when

"title" of the good has passed

A "merchant" is defined as a person who

All of the above.

Which of the following contracts requires a writing under the UCC, Article 2?

Americo, a textile manufacturer, contracted to sell sleeping bags for $643 to UpTown Department Store. (more than $500 required in writing)

The doctrine of unconscionability has evolved through its application by the courts to include:

Both (a) and (b) are correct.

Davis Co. and Ruby Creations enter an oral contract providing that Ruby will deliver three dozen dresses to Davis at $20 per dress. The next day, Davis sent Ruby a letter signed by Davis's purchasing agent confirming the quantity and item, but not mentioning the price. Which of the following is true?

Davis is bound by the contract when its authorized agent sends the letter, but Ruby Creations is bound by the oral contract ten days after receiving the letter, unless it objects in writing within that time.

A contract to purchase stocks and bonds is governed by Article 2 of the UCC.

False

A lease is the transfer of title to goods from seller to buyer for a price.

False

A lessee under a consumer lease and a buyer under a sale of goods are provided with the same protections against unconscionability under the UCC.

False

If a contract does not comply with the statute of frauds, it is void.

False

If a merchant signs a written offer to buy or sell goods, this will be irrevocable only if accompanied by consideration.

False

Leslie, the owner of a shoe store, purchased 500 Model XT-50 running shoes from her supplier, but a price was not stated in the contract. The contract is voidable at Leslie's option until the parties agree on a price.

False

The UCC modifies the common law rule by requiring additional consideration for the modification of a contract

False

The definition of "goods" in the UCC does not include timber, minerals, or a building attached to real property even if removed by the seller.

False

Article 2 of the UCC covers employment contracts

False Article 2 of the UCC governs contracts for the sale of goods or services

The Code follows the common law rule requiring that modification of an existing contract be supported by consideration in order to be valid.

False - the code has the relaxed common law requirements of consideration. Additional consideration isn't required for modification - good faith

The Code continues to govern sales transactions except where specifically displaced by the law of contracts

False; The opposite is true. General contract law continues to apply where the Code has not specifically modified such law

Mike inherited some antiques. Pat agrees to buy them. In the contract, Mike and Pat agree to value the antiques at whatever the Sotheby's representative says. It is much higher than either of them anticipated. What is the outcome?

Pat has to buy at the price set by the Sotheby representative.

An example of the "course of dealing" concept that courts will use in interpreting a contract under the UCC would be:

Steven and Michelle have been involved in contracts together for over 5 years. Steven maintains the sign for Michelle's restaurant. Each time Steven sees the sign needs repair, he fixes it without need of express consent from Michelle. Michelle has always paid the bill promptly.

Which of the following is true regarding unconscionability under the Code

The Code denies or limits enforcement of an unconscionable contract for the sale of goods.

Which of the following statements is true?

The Code provides that a contract for the sale of goods can be modified without new consideration, provided the modification is made in good faith

Which of the following is not true about auctions?

The UCC provides that if an auction sale is advertised or announced in explicit terms to be with reserve, the auctioneer may not withdraw the article put up for sale unless no bid is made within a reasonable time.

Which of the following is correct with respect to "finance leases"?

The finance lessor functions as a source of credit

Which of the following is correct with respect to "finance leases"?

The finance lessor functions merely as a source of credit.

Edie telephoned the office supply store and agreed to buy a dozen ink cartridges at $26 each. She then realized what a good buy this was and called the store with a request to modify the contract to read two dozen. What is the consequence?

The modified contract is unenforceable

Helen called the office supply store and agreed to buy a dozen laser toner cartridges at $36 each. She then realized what a good buy this was and called the store with a request to modify the contract to read two dozen. What is the consequence?

The modified contract is unenforceable

Greg has agreed to buy 500 pounds of wheat from Lynn, but the two have not agreed on the price. When there is no agreement as to price in a contract for a sale of goods, what effect does it have on the contract?

The price is a reasonable price at the time of delivery

Karen has agreed to buy Sara's car, but the two have not agreed on the price. When there is no agreement as to price in a contract for a sale of goods, what effect does it have on the contract?

The price is a reasonable price at the time of delivery.

Karen has agreed to buy Sara's car, but the two have not agreed as to the price. When there is no agreement in a sales contract as to price, what effect does it have on the contract?

The price may be fixed as a reasonable price.

Which of the following transactions is governed by Article 2 of the UCC?

The sale of fifty roofing nails.

Which of the following transactions is governed by Article 2 of the UCC?

The sale of oranges to be picked from a 10 acre grove

"Goods" for purposes of the Code are tangible, movable, personal property.

True

Article 2A of the UCC affords special treatment for consumer leases.

True

The CISG governs only the formation of the contract of sales and the rights and obligations of the seller and buyer. It does not cover the validity of the contract or any of its provisions.

True

The Code addresses the "battle of the forms" problem by focusing on intent of the parties.

True

Goods, as defined by Article 2 of the UCC are tangible, moveable property.

True - this may include cattle crops or other tangible movable property

A contract that does not satisfy the writing requirement of the Article 2 statute of frauds, but which is otherwise valid, is enforceable in which of the following situations?

Where the goods have been delivered and accepted. Where payment has been accepted. Where the goods have been specially manufactured and are not suitable for resale in the ordinary course of business.

The definition of "usage of trade" includes

a practice regularly observed and followed in a place, vocation, or trade.

In the Carter v. Tokai Financial Services, Inc. case, the agreement was found to:

be a true finance lease.

A "merchant" is defined as a person who:

by his occupation holds himself out as having knowledge or skills peculiar to certain goods or practices. a dealer in a type of good employs an agent or broker whom he holds out as having such knowledge or skill

All of the following are fundamental concepts underlying Article 2 except

contraction of commercial practices

A sequence of previous conduct between the parties, which may be regarded as establishing an understanding for interpreting an agreement between the two parties, is known as:

course of dealing

Ameri-Tex, a textile manufacturer, offered to sell 500 cotton blankets to Pittsburgh Hospital for $10,000 with payment on delivery. Pittsburgh Hospital responded, "accept your offer; full payment due 30 days after delivery." The parties:

do not have a contract since the acceptance violated the mirror image rule.

The CISG specifically excludes sales of:

electricity, ships or aircraft, goods bought for personal family use

A ________ is a special type of lease transaction generally involving three parties instead of two.

finance lease

A(n) __________ is a special type of lease transaction generally involving three parties instead of two.

finance lease

The Code has made certain offers irrevocable without the offeree giving any consideration for the promise to keep the offer open. These offers are known as:

firm offers

The Code has made certain offers irrevocable without the offeree's giving any consideration for the promise to keep the offer open. These offers are known as:

firm offers.

A contract has an open price term if the agreement:

fixes the price in terms of some agreed market or other standard, as set by a third person or agency, and the price is not so set. provides that the parties shall agree later as to the price and they fail to so agree.. says nothing as to price

In the case of Pittsley v. Houser, the court:

found the "predominant factor" test was the better, more prudent rule

The Code defines ________ as "honesty in fact in the conduct or transaction concerned."

good faith

If no consideration is given for a firm offer:

it is still irrevocable

The most important element in determining whether a sales contract has been made is:

the intention of the parties to make a contract.

A "sale" of goods happens when:

title to the goods is passed

The case of Construction Associates, Inc. v. Fargo Water Equipment Co. illustrates the doctrine of:

unconscionability.