ch 11 true/false
10. In contrast to the law of contracts, Article 2 of the UCC specifically governs service contracts and contracts involving real estate. (A) True (B) False
False
100. The seller has the right to default on contractual obligations by rejecting tender of goods that conforms to the contract. (A) True (B) False
False
11. Article 2 of the UCC applies to all sales agreements, except those between merchants. (A) True (B) False
False
12. In a dispute with a stock broker over the sale of stock, a lawyer will ordinarily bring the lawsuit under Article 2 of the UCC. (A) True (B) False
False
13. If the sale of a good also includes a service contract, it will not fall under Article 2. (A) True (B) False
False
15. Many land experts prefer to write contracts for the sale of property under Article 2, as it tends to favor sellers. (A) True (B) False
False
17. If the sale of a good also involves services, such as installation of the goods, the contract falls under the Article 2. (A) True (B) False
False
18. Members of the public who enter into a sales contract under Article 2 are subject to the same standard as are merchants. (A) True (B) False
False
26. Article 2A is a recent addition to the UCC that extends it to cover the sale of real estate in commercial transactions. (A) True (B) False
False
28. If parties to the sale of goods under Article 2 fail to state when title passes, then it is presumed to pass when the goods are manufactured and ready for shipment. (A) True (B) False
False
29. If your laptop computer is stolen, and then sold by the thief to a buyer who does not know it is stolen (is "innocent"), new title is created for the innocent buyer. (A) True (B) False
False
3. Modern commercial law was largely invented by British judges and legal experts who worked for years in the 1840's to replace outdated legal rules that were blocking the development of commerce. (A) True (B) False
False
31. The UCC, compared to the common law, prefers standard form contracts. (A) True (B) False
False
35. In Crest Ridge Construction v. Newcourt, where Newcourt demanded payment in full before delivery because Crest Ridge did not have a credit history, the court held Newcourt had the right to impose that payment term given the reality of the matter. (A) True (B) False
False
38. Under both Article 2 and the common law, if parties intend to enter into a binding agreement, but are unable to agree to all major terms, a contract will be formed with the missing terms supplied by the parties at a later date or reasonable terms will be imposed by the court if necessary. (A) True (B) False
False
39. In contrast to the common law of contracts, a merchant's firm offer under Article 2 may be revoked within a reasonable time without consideration and is irrevocable with consideration for a period not to exceed 3 months. (A) True (B) False
False
42. Under Article 2, an acceptance is invalid if the parties intend to form a contract but the offeree's acceptance contains different terms from the original offer. (A) True (B) False
False
43. Article 2 uses the common law rule of each state to determine when an offer has been accepted to form a contract. (A) True (B) False
False
45. Under the UCC, an offeror may not impose a term in an offer that does not allow the offeree to change terms of the offer. (A) True (B) False
False
47. Under the UCC, when a "battle of the forms" exists, the rule is generally that no contract was formed. (A) True (B) False
False
48. In Orkal Industries v. Array Connector, where Orkal bought parts from Array by sending an order form, but Array confirmed with its own form that contained different terms. Orkal did not object to the different terms until litigation arose later at which point the added terms mattered. The appeals court held that under the UCC a seller cannot change material terms of an order without express permission.. (A) True (B) False
False
49. In Orkal Industries v. Array Connector, where Orkal bought parts from Array by sending an order form, but Array confirmed with its own form that contained different terms. Orkal did not object to the different terms until litigation arose later at which point the added terms mattered. The appeals court held that under the UCC a seller cannot change material terms of an order without express permission.. (A) True (B) False
False
5. Before the UCC interstate contracts for the sale of goods were primarily governed by federal common law. (A) True (B) False
False
52. Under the UCC, if a party modifies a proposed sales contract, new consideration must be provided for the change for a contract to be formed. (A) True (B) False
False
53. Like the common law, the UCC provides that the parties must exchange new consideration to modify an existing sales contract. (A) True (B) False
False
54. The UCC's statute of frauds provision says that all service contracts must be in writing. (A) True (B) False
False
55. According to Article 2's statute of frauds provision, all written contracts under the UCC must specify all terms of the contract. (A) True (B) False
False
56. The statutes of frauds provision of the UCC states that contracts for the sale of goods worth $500.00 or more must be "sealed." (A) True (B) False
False
57. Under Article 2's statute of frauds, the basic rule is that a contract for the sale of goods priced at $5000 or more is not enforceable unless it is in writing and signed by the party against whom enforcement is sought. (A) True (B) False
False
60. With respect to parol evidence, the common law of contracts and Article 2 are the same. (A) True (B) False
False
61. The UCC operates the same as the common law in how it allows courts to fill the gaps left of contracts that have open terms. (A) True (B) False
False
62. In Griffith v. Clear Lakes Trout, where a dispute arose over "market size" trout, the court held that the buyer (Clear Lakes) had the right to expect the seller to grow the trout to a larger size than he had been doing. (A) True (B) False
False
64. In Griffith v. Clear Lakes Trout, where a dispute arose over trout, the court held that the buyer, Clear Lakes, had to accept small fish despite their not being "market size," because otherwise Griffith would go bankrupt. (A) True (B) False
False
69. When a buyer agrees to purchase all the goods produced by a seller, it is called a requirements contract. (A) True (B) False
False
7. Only eight states have not adopted Article 2 of the UCC. (A) True (B) False
False
70. When a seller agrees to supply all of the goods needed by a buyer, it is called an output contract. (A) True (B) False
False
73. If the delivery terms are not specified in a contract, the normal usage that the courts impose is for the seller to pay for shipping to the buyer's place of business. (A) True (B) False
False
74. If the parties to a contract failed to establish a delivery date in their contract, if a dispute arises over delivery, both parties have the right to abandon the contract. (A) True (B) False
False
76. Under the common law, the seller's tender of delivery is required to conform in detail to the terms of the agreement between the parties. In the absence of perfect tender, the buyer can reject that part of shipment that does not conform and accept the remainder. (A) True (B) False
False
8. Congress adopted the UCC in the early 1950's to facilitate trade and reduce the confusion caused by different common law rules in different states. (A) True (B) False
False
80. If a seller delivers defective good, under the UCC the buyer may not cancel the contract if the seller repairs the goods or replaces the goods in a "timely" fashion. (A) True (B) False
False
81. Unless the parties have otherwise agreed, the buyer has a right to inspect the goods at the seller's expense before accepting or paying for them. (A) True (B) False
False
82. If a seller delivers goods that do not conform to the contract, the buyer must accept the goods but may reduce payment by the change in value. (A) True (B) False
False
83. The buyer's payment for the goods under Article 2 is due when the goods leave the seller's facilities. (A) True (B) False
False
87. During negotiations, the seller may induce the buyer to buy goods by making claims or by taking other actions. When those statements or actions relate to the quality, condition, or performance of the goods, the seller creates an implied warranty. (A) True (B) False
False
92. Under the UCC, for good to be merchantable means that they must be "of exceptional quality expected of an expert." (A) True (B) False
False
93. If the buyer relies on the seller's skill or judgment to select the goods for a unique purpose, an express warranty of merchantability may be created. (A) True (B) False
False
97. In Lee v. R&K Marine, where Lee bought a new boat from R&K that fell apart in three years, the court held the warranty disclaimer invalid because the boat failed to meet normal expectations. (A) True (B) False
False
98. In Lee v. R&K Marine, where Lee bought a new boat from R&K that fell apart in three years, the court held the seller not liable because the problem with the boat was caused by the manufacturer, not the seller. (A) True (B) False
False
1. In medieval Europe, rules governing trading among merchants developed called the law merchant. (A) True (B) False
True
14. A contract for the sale of a patent may not be under UCC Article 2. (A) True (B) False
True
16. If the sale of a good involves services that are of greater value than the goods themselves, the contract falls under the common law, not Article 2. (A) True (B) False
True
19. Article 2 requires sales contracts to be in good faith. (A) True (B) False
True
2. Modern commercial law traces its roots to ancient rules known as the law merchant. (A) True (B) False
True
20. Anyone who presents themselves as having knowledge about a product will be held to the UCC standard of a merchant, even if the person does not have skilled knowledge. (A) True (B) False
True
21. Although all parties to a sale under the UCC must meet the UCC's good faith standard, merchants must meet even higher standards of honesty and good faith. (A) True (B) False
True
22. Jones is "a merchant" under Article 2 even if he knows little about textile machinery but hires Smith as his agent to sell textile machinery. Smith has 25 years' experience in the textile industry. (A) True (B) False
True
23. Under Article 2, a sale occurs when there is a passing of title from the seller to the buyer for a price. (A) True (B) False
True
24. Under Article 2, if the legal title to a good does not pass, there has not been a sale under the UCC. (A) True (B) False
True
25. Article 2A is a recent addition to the UCC that extends it to cover certain leases of personal property. (A) True (B) False
True
27. Parties to the sale of some goods may control, by contract, when title to the goods is to pass. (A) True (B) False
True
30. The UCC requires less formality than does the common law of contracts. (A) True (B) False
True
32. Under the common law, a contract is not formed unless there is no question that an offer has been accepted. Article 2 provides that a contract can be formed in any manner, including "conduct" that shows an agreement between the parties. (A) True (B) False
True
33. A contract can be formed under Article 2 of the UCC even if some of the offer's major terms are omitted or are simply left open for determination later. (A) True (B) False
True
34. Article 2 allows the parties to enter into a binding agreement even though the contract price is to be determined at a later date. (A) True (B) False
True
36. In Crest Ridge Construction v. Newcourt, where Newcourt demanded payment in full before delivery because Crest Ridge did not have a credit history, the court held Crest Ridge could sue for the higher price it had to pay another supplier for the same goods. (A) True (B) False
True
37. In Crest Ridge Construction v. Newcourt, where Newcourt demanded payment in full before delivery because Crest Ridge did not have a credit history, the court held that it would look to the dealings of the parties instead of the written contract to determine the intent of the parties. (A) True (B) False
True
4. Before the UCC contracts for the sale of goods were primarily governed by common law, which differed from state to state. (A) True (B) False
True
40. Under Article 2, if the offeror does not clearly state a particular method of acceptance, a contract is formed when the offer is accepted in any reasonable manner under the circumstances. (A) True (B) False
True
41. Under the common law of contracts, unlike under Article 2, an acceptance may not deviate from the terms of the offer without being either a rejection or a counteroffer. (A) True (B) False
True
44. A contract can exist under the UCC even if some terms are changed or added by the offeree. (A) True (B) False
True
46. Under the UCC, when contracts go back and forth between parties with conflicting terms, often written on standard forms, it is referred to as the "battle of the forms." (A) True (B) False
True
50. In Orkal Industries v. Array Connector, where Orkal bought parts from Array by sending an order form, but Array confirmed with its own form that contained different terms. Orkal did not object to the different terms until litigation arose later at which point the added terms mattered. The appeals court held that if the changed terms were minor they would be binding, but material changes require assent under the UCC. (A) True (B) False
True
51. "Shrinkwrap" agreements that come attached to products have no legal validity. (A) True (B) False
True
58. The UCC follows a different parol evidence rule than does the common law of contracts. (A) True (B) False
True
59. Under the UCC, parol evidence may be admitted to clarify customary trade practices. (A) True (B) False
True
6. Every state, except Louisiana, has adopted Article 2 of the UCC. (A) True (B) False
True
63. In Griffith v. Clear Lakes Trout, where a dispute arose over "market size" trout, the court held that it would look to the history of the dealings between the parties to see what they believed, in practice, to be the proper size of the fish. (A) True (B) False
True
65. Under the UCC, the court will determine a reasonable price in case a contract is unclear about price and the parties cannot agree. (A) True (B) False
True
66. If the parties to a contract failed to include a critical term, such as price or quantity, the court may look to normal trade usage to determine what that term should be. (A) True (B) False
True
67. The UCC generally requires that a contract specify in writing a quantity to be purchased. (A) True (B) False
True
68. When a buyer agrees to purchase all the goods produced by a seller, it is called an output contract. (A) True (B) False
True
71. When a seller agrees to supply all of the goods needed by a buyer, it is called a requirements contract. (A) True (B) False
True
72. If the delivery terms are not specified in a contract, it must be "reasonable" which is determined by industry custom and intent of the parties. (A) True (B) False
True
75. In meeting her obligation under the UCC, the seller must be concerned about the appropriate manner and timeliness of delivery, the place of tender, and the quality of tender. (A) True (B) False
True
77. Under the common law, buyers may reject goods that do not conform to the contract. The UCC provides the seller with opportunities (limited) to cure the problem. (A) True (B) False
True
78. If a buyer rejects a shipment of goods as non-conforming, under the UCC the seller may have a right to cure the problem. (A) True (B) False
True
79. If a seller delivers defective good, under the UCC the buyer may not cancel the contract if the seller repairs the goods or replaces them before the deadline in the contract. (A) True (B) False
True
84. A warranty is a statement or representation made by a seller that the goods being sold conform to the specified standards of quality, safety, performance and title. (A) True (B) False
True
85. Under Article 2, a warranty of title is assumed when an innocent buyer purchases stolen goods from a seller. (A) True (B) False
True
86. If a supplier delivered goods that violated a trademark or patent, there would be a violation of the warranty of title. (A) True (B) False
True
88. During negotiations, the seller may induce the buyer to buy goods by making claims or by taking other actions. When those statements or actions relate to the quality, condition, or performance of the goods, the seller creates an express warranty. (A) True (B) False
True
89. Article 2 provides that unless the parties expressly agree otherwise, an implied warranty of merchantability accompanies sales by merchants. (A) True (B) False
True
9. The UCC does not apply to the sale of investment securities. (A) True (B) False
True
90. The UCC extends express warranties made to buyers to designated third parties. (A) True (B) False
True
91. Article 2 imposes an obligation on a merchant/seller that goods being sold are reasonably fit for the purpose for which they are being sold and that they are of fair merchantable quality. (A) True (B) False
True
94. If a seller knows that a buyer has a particular purpose for purchasing a good, and the buyer relies on the seller's skill or judgment in selecting a good, an implied warranty of fitness for a particular purpose may be created. (A) True (B) False
True
95. Under Article 2, a seller can exclude any express or implied warranty, as long as those limits follow the rules of Article 2. (A) True (B) False
True
96. Boilerplate language in a contract that excludes a warranty, and is inconsistent with other warranty discussion, is invalid. (A) True (B) False
True
99. In Lee v. R&K Marine, where Lee bought a new boat from R&K that fell apart in three years, the court held the seller had properly disclaimed all warranties, so was not liable for the problem. (A) True (B) False
True
