BUL2241 Final (Qz 18-22)
Gold Medical Supply Company and Home & Hospice Care, Inc., enter into a contract for a sale of health care equipment and supplies. Under either a shipment contract or a destination contract, the seller must
give the buyer any necessary documents of title. (CHP 20-NIK)
If the goods are so nonconforming that the buyer has the right to reject them, the risk of loss does not pass to the buyer.
TRUE (CHP 19)
In a sale or return, a buyer has an option to return the goods and undo the sale.
TRUE (CHP 19)
Fungible goods are goods that are alike naturally or by agreement or trade usage.
TRUE (CHP 19-NIK)
If a lessor is a merchant, the risk of loss passes to a lessee when the lessee takes physical possession of the goods.
TRUE (CHP 19-NIK)
The entrustment rule basically allows innocent buyers to obtain legitimate title to goods purchased from merchants even if the merchants do not have good title
TRUE (CHP 19-NIK)
The risk of loss in a shipment contract passes to the buyer when the goods are delivered to the carrier.
TRUE (CHP 19-NIK)
If a buyer repudiates a contract, the seller can bring an action to recover damages.
TRUE (CHP 20)
The seller's or lessor's major obligation under a sales contract is to tender conforming goods to the buyer or lessee.
TRUE (CHP 20)
Unless otherwise agreed, inspection of goods can take place at any reasonable place and time and in any reasonable manner.
TRUE (CHP 20)
Unless the parties agree otherwise, the buyer or lessee has an absolute right to inspect the goods before making payment.
TRUE (CHP 20)
When a seller refuses to deliver goods that are unique, a buyer can obtain specific performance.
TRUE (CHP 20)
If a buyer repudiates a contract, the seller can bring an action to recover damages.
TRUE (CHP 20-NIK)
If a seller fails to deliver the goods, the buyer's damages do not include all losses resulting from this course of events.
TRUE (CHP 20-NIK)
In contracts involving a carrier, a seller can complete performance through a shipment contract or a destination contract.
TRUE (CHP 20-NIK)
The obligation of good faith underlies every contract under the Uniform Commercial Code
TRUE (CHP 20-NIK)
Until the time for performance under a contract expires, the seller has a right to cure.
TRUE (CHP 20-NIK)
A lien is an encumbrance on a property to satisfy or protect a claim for payment of a debt.
TRUE (CHP 21)
Express warranties can be found in a seller's brochure.
TRUE (CHP 21)
Implied warranties can arise from a "usage of trade."
TRUE (CHP 21)
To specifically disclaim an implied warrant of merchantability a seller or lessor must mention the word merchantability
TRUE (CHP 21)
In most sales, sellers warrant that they have good and valid title to the goods sold.
TRUE (CHP 21-NIK)
Recovery in a product liability case may be limited when it can be shown that the plaintiff misused the product.
TRUE (CHP 21-NIK)
Statements of fact made during the bargaining process are express warranties
TRUE (CHP 21-NIK)
When a user is injured as a result of a seller's misrepresentation, the basis of product liability may be the tort of fraud.
TRUE (CHP 21-NIK)
Vague generalities and obvious exaggerations are permissible in advertising.
TRUE (NIK - CH 22)
An information label must be attached to every new car to include the fuel economy estimate for the vehicle.
TRUE (NIK -CH 22)
A credit-card company must send monthly bills to cardholders twenty-one days before the due date.
TRUE (NIK CH 22)
Package labels must use words that the ordinary consumer understands
TRUE (NIK CH 22)
A debt-collection agency under the Fair Debt Collections Practices Act is someone who regularly attempts to collect debts on behalf of someone else, usually for a percentage of the amount owed.
TRUE (NIK-CH 22)
The Truth-in-Lending Act applies to persons who, in the ordinary course of their business, lend money, sell on credit, or arrange for the extension of credit.
TRUE (NIK-CH 22)
The UCC imposes some different rules on merchants
TRUE - (CHP 18)
Sari buys a new sport utility vehicle (SUV) from Terrific Cars & Trucks, Inc. The most important factor in determining whether an ex-press warranty is created is whether
Terrific's promise becomes part of the basis of the bargain. (CHP 21-NIK)
Fact Pattern 20-1 Daily Bread Bakeries, Inc., contracts to buy all of its ingredient requirements for bread making, at a certain minimum per year, from Enriched Flour & Grain Corporation for six years. After three years, Daily Bread tells Enriched that it plans to sell its assets to Flat Bread Shops, Inc. Flat Bread refuses to assure Enriched that it will continue Daily Bread's contract
a repudiation of the contract (CHP 20-NIK)
Statements of opinion and value usually create express warranties
FALSE (CHP 21-NIK)
To support the imposition of strict product liability, a product must be substantially changed from the time it is sold to the time an injury occurs.
FALSE (CHP 21-NIK)
A credit collection agency may contact a debtor at any time.
FALSE (CHP 22)
In a sale or return, title and risk of loss remain with the seller until the buyer accepts the goods.
FALSE (CHP19-NIK)
There are no circumstances under which a contract can be tendered by multiple deliveries of goods.
FALSE (CHP20-NIK)
Credit can be denied solely on the basis of marital status.
FALSE (NIK CH 22)
Deceptive advertising does not occur in the online environment
FALSE (NIK CH 22)
The Consumer Product Safety Commission prohibits manufacturers from marketing products that are not marked with its "seal of approval."
FALSE (NIK CH 22)
Clear Day Company, which is based in Delaware, agrees to sell fifty windows, currently stored in Florida, to Far Vu, Inc., which is based in Hawaii. Absent an agreement to the contrary, the place of delivery is in
Florida (CHP 20)
Fuel Connector Products, Inc., agrees to sell Go-Flo, Inc., a certain quantity of hose couplings and fittings located at Fuel Connector's place of business, but the contract does not specify a place of delivery. Go-Flo is expected to pick up the goods. The place of delivery is
Fuel Connector's place of business (CHP 20-NIK)
Gas & Wood Stove Shop receives Hearthwarm-brand stoves from Independent Dealer, Inc., under a sale or return agreement. While the stoves are in Gas & Wood's possession, title is held by
Gas & Wood (CHP 19)
Growers Mart buys one hundred cases of berries from Hilltop Farms. The parties agree that the berries will be transported "F.O.B. Hilltop Farms" via Refrigerated Trucking Company. Refrigerated's truck and the berries are lost in a fire following an accident. The loss of the berries is suffered by
Growers Mart (CHP 19)
If an owner holds fungible goods as tenants in common, he or she can pass title without actually separating the goods
TRUE (CHP 19)
Under the UCC, an offeree can accept an offer to buy goods by a prompt shipment of conforming goods.
TRUE (CHP 18-NIK)
An action in strict product liability requires that a product be reasonably dangerous to a user or consumer
FALSE (CHP 21-NIK)
Big Eggs, Inc. agrees to supply Omelet Express with five hundred eggs. Big Eggs cannot reasonably ask Omelet Express to pick up the eggs at
4:30 AM (CHP 20)
A design defect is not the sort of product defect that will support the imposition of liability on a strict product liability basis.
FALSE (CHP 21-NIK)
Banquets & Parties (B&P) contracts to buy 1,000 uninflated balloons from Gas Bags, Inc., for $1 per item. When the market price decreases to 50 cents per balloon, B&P refuses to go through with the deal. Gas Bags can recover
$500.00 (CHP 20)
NutriRich, Inc., sells fifty cases of Omega 3 capsules to Good Health stores, but before Good Health takes physical possession, the cases are lost. Under the UCC, the parties' rights and obligations with respect to the loss depend on the concept of
- insurable interest (WRONG ANSWER) - Title. - Identification. - risk of loss. (CHP 19)
Curtis enters into a contract with Drive-Away Lease Company for a three-year lease of a car. This contract is subject to
Article 2A of the UCC (CHP 18-NIK)
Home Appliance Corporation contracts with Instate Trucking Company to take a selection of appliance repair parts to Journey Airlines, Inc., with Journey to transport the goods to a KeepSafe Company warehouse. Instate Trucking, Journey Airlines, and KeepSafe each acknowledge possession of the goods by a document of title. Instate Trucking, Journey Airlines, and KeepSafe are
Bailees (CHP 19)
AgriGro, Inc., sells hybrid seed to farms and other agricultural enterprises. Brandon buys and plants AgriGro seed on his Country Farm, but no crop grows because the seed is defective. Brandon sues AgriGro for product liability based on negligence. To win, Brandon must show that
Brandon suffered damage caused by the defect. (CHP 21)
Commercial Rents Corporation agrees to lease a pressure washer to Delivery Trucks, Inc., which agrees to pick it up at E Street Warehouse. Before Delivery Trucks retrieves the washer, it is stolen. The loss is suffered by
Commercial Rents (CHP 19)
Creditworthy Loan Company extends credit in the ordinary course of its business. Under the Truth-in-Lending Act, Creditworthy must inform potential borrowers of
Creditworthy's credit terms. (CH 22)
Consumers Choice store accepts a shipment of EZ2U-brand tablets from Digital Devices, Inc. Consumers Choice later discovers a defect in the tablets, revokes acceptance, and returns the tablets via GoBack, Inc. During the return, the tablets are lost. The loss is suffered by
Digital Devices (CHP 19)
A sanction known as bait-and-switch advertising requires acompany to advertise the products of its competitor to counter itsown false claims.
FALSE (CH 22)
Counteradvertising occurs when a salesperson lures a consumer into a store by advertising a low-priced item in order to switch the consumer to a more expensive item.
FALSE (CH 22)
Credit can be denied solely on the basis of race
FALSE (CH 22)
Creditors attempting to collect debts are generally considered to be debt-collection agencies under the Fair Debt Collections Practices Act.
FALSE (CH 22)
Deceptive advertising does not occur in the online environment
FALSE (CH 22)
Federal laws often provide more sweeping and significant protections for the consumer than state laws.
FALSE (CH 22)
The Consumer Product Safety Commission prohibits manufacturers from marketing products that are not marked with its "seal of approval."
FALSE (CH 22)
All oral contracts are enforceable under the UCC.
FALSE (CHP 18)
For an item to be characterized as a "good" under the UCC, it must be intangible.
FALSE (CHP 18)
Intangible property has conceptual existence and thus comes under Article 2.
FALSE (CHP 18)
The UCC requires that the mirror image rule be followed for all acceptances.
FALSE (CHP 18)
The terms of a fully integrated contract can be contradicted by evidence of any prior agreements.
FALSE (CHP 18)
Under the UCC, parties to sales and lease contracts are NOT free to establish whatever terms they wish.
FALSE (CHP 18)
The terms of a fully integrated contract can be contradicted by evidence of any prior agreements.
FALSE (CHP 18- NIK)
A firm offer by a merchant may be oral.
FALSE (CHP 18-NIK)
Goods associated with real estate never fall within the scope of UCC Article 2.
FALSE (CHP 18-NIK)
The UCC imposes special business standards on casual and inexperienced sellers and buyers.
FALSE (CHP 18-NIK)
Under the UCC, an agreement modifying a contract needs new consideration to be binding.
FALSE (CHP 18-NIK)
A receipt issued by a warehouser for goods stored in a warehouse is a bill of lading.
FALSE (CHP 19)
In a destination contract, the seller is required or authorized to ship goods by carrier.
FALSE (CHP 19)
Title and risk of loss can pass to the buyer from the seller before the goods are identified to the contract.
FALSE (CHP 19)
If a sale involves crops that are to be harvested within twelve months, identification takes place when the seeds for the crops are harvested.
FALSE (CHP 19-NIK)
In a destination contract, the seller is required or authorized to ship goods by carrier.
FALSE (CHP 19-NIK)
In a sale on approval, a buyer takes goods primarily for resale, with a right to return any goods that fail to sell.
FALSE (CHP 19-NIK)
Under the UCC, the risk of loss is necessarily determined by title.
FALSE (CHP 19-NIK)
An installment contract is breached if a seller tenders any non-conforming goods
FALSE (CHP 20)
If either the goods or their tender fails to conform to the contract in any respect, the buyer or lessee must reject all of the goods.
FALSE (CHP 20)
In the absence of any specific agreements, the buyer or lessee must make payment after receipt of the goods.
FALSE (CHP 20)
Under the UCC, there are no exceptions to the perfect tender rule.
FALSE (CHP 20)
A buyer's failure to cover will bar him or her from using any other remedies available under the UCC.
FALSE (CHP 20-NIK)
A design defect is not the sort of product defect that will support the imposition of liability on a strict product liability basis.
FALSE (CHP 21)
A design defect is not the sort of product defect that will support the imposition of liability on a strict product liability basis.
FALSE (CHP 21)
If a warranty of infringement is breached and the buyer is sued by the claim holder, the buyer need not notify the seller of the lawsuit.
FALSE (CHP 21)
In sales law, failing to examine the goods and refusing to examine the goods are considered the same thing.
FALSE (CHP 21)
Only a statement made after a contract is entered into can be an express warranty.
FALSE (CHP 21)
Jamie is redoing his kitchen and decides he needs a floor sander to complete the job. Jamie tells Rachel, his neighbor, that he needs a floor sander. Rachel tells Jamie to call Home Repair Rentals, Inc. Home Repair Rentals leases Jamie a floor sander. In this transaction the lessor is
Home Repair Rentals (CHP 18-NIK)
Household Appliance Corporation sells Ideal-brand vacuum cleaners to Jolly Discount Stores and other retailers. Household Appliance will have an insurable interest in the vacuums as long as
Household Appliance retains title to the goods. (CHP 19)
Organicos Café orders five gallons of PureMaid-brand transfat-free olive oil from Quico Cooking Supplies, Inc. Quico mistakenly ships soy oil, which Organicos keeps, despite the nonconformity. The oil is destroyed in a fire. The loss is suffered by
Organicos Café. (CHP 19-NIK)
Pipes & Culverts Company orders six irrigation pumps from Quality Plumbing, Inc. The pumps are stored in Restorers Warehouse. Under the terms of the order, Quality must give Pipes & Culverts a warehouse receipt for the goods, which Pipes will then pick up. Title to the goods passes to Pipes & Culverts when
Quality gives Pipes & Culverts a warehouse receipt for the drives (CHP 19)
Roasters Corporation and Outdoor Barbecues, Inc., enter into a contract for a sale of a commercial grill. The contract requires Roasters to deliver the goods to Speedy Delivery Company for transport to Outdoor. Risk of loss passes to Outdoor when
Roasters delivers the goods to Speedy (CHP 19)
If a seller is not a merchant, and the goods are not to be moved, the risk of loss passes to a buyer on tender of delivery
TRUE (CHP 19)
Safety Supply Corporation in New York sells a truckload of protective suits, masks, and other safety gear to Toxic Recovery, Inc., in Connecticut, "F.O.B. New York." Safety Supply arranges with US Truckline to transport the goods. The cost of the transport will be paid by
Safety Supply. (CHP 19-NIK)
Quest Outdoor Store orders RiverRun-brand kayaks from Sports Merchandise, Inc. Sports Merchandise mistakenly ships kayaks of the wrong size, which Quest rejects and returns via Trans-State Shipping Company. During the re-turn, the kayaks are lost. The loss is suffered by
Sports Merchandise (CHP 19-NIK)
A consumer who receives unsolicited merchandise sent by U.S. mail can keep it without obligation to the sender
TRUE (CH 22)
Food products are required to bear labels detailing the nutritional content
TRUE (CH 22)
Merchants must ship orders within the time promised in their ads and notify consumers when orders cannot be shipped on time
TRUE (CH 22)
The Federal Trade Commission is charged with determining what constitutes a deceptive trade practice.
TRUE (CH 22)
Vague generalities and obvious exaggerations are permissible in advertising.
TRUE (CH 22)
A lessor is a party who transfers the right to the possession and use of goods under a lease.
TRUE (CHP 18)
Goods associated with real estate often fall within the scope of Article 2.
TRUE (CHP 18)
To be characterized as a "good" under the UCC, an item of property must be movable and tangible
TRUE (CHP 18)
Under the UCC, an offeror must be notified within a reasonable time that the offeree has accepted
TRUE (CHP 18)
Under the UCC, an oral contract for a sale of goods is enforceable once payment has been made and accepted
TRUE (CHP 18)
A contract for the sale of minerals is considered to be a contract for the sale of goods if the severance is to be made by the seller.
TRUE (CHP 18-NIK)
A court can refuse to enforce a contract that the court deems to have been unconscionable at the time it was made.
TRUE (CHP 18-NIK)
A merchant is a person who deals in goods of the kind involved in the sales contract or who holds herself or himself out as having skill or knowledge peculiar to the practices or goods being purchased or sold.
TRUE (CHP 18-NIK)
In interpreting a commercial agreement, a court will assume that the usage of trade was taken into account when the agreement was phrased.
TRUE (CHP 18-NIK)
To be characterized as a "good" under the UCC, an item of property must be movable and tangible.
TRUE (CHP 18-NIK)
In the following situations, two parties claim the same goods. Who is most likely to prevail in each circumstance? Explain. WRITE IN (a) Olan steals Phil's television set and sells it to Quincy, an innocent purchaser, for value. Phil learns Quincy has the set and demands its return.
WRITE IN (CHP 19-NIK) #17
Colby contracts in writing to sell his 2005 Dodge-brand pick-up truck to Efrem for $10,500. Colby agrees to deliver the truck on Friday, and Efrem promises to pay the $10,500 on the following....
WRITE IN (CHP 20 #11)
Quality Computer Company agrees to sell one hundred servers to Social Media Networks, Inc. The servers, which Social Media Networks expressly requires to have certain amounts of memory, are to be shipped "F.O.B. Social Media Networks distribution center in Memphis, TN." When the servers arrive, Social Media Networks rejects them and informs Quality Computer, claiming that
Write IN (CHP 19-TT)
Clean Machines Company makes washing machines. Over the phone, Clean offers to sell Dealers Appliance Outlet one hundred model EZ2000 washers at a price of $150 per unit. Clean says that it will keep the offer open for ninety days.
Write IN - CHP 18-NIK
Peter, an agent for Zippy Cars, Inc., writes a letter to Cassandra on March 1 stating that he will sell her a 2011 Subaru Outback for $20,000 between March 1 and April 30. Peter's letter to Cassandra is
a firm offer (CHP 18)
Peter, an agent for Zippy Cars, Inc., writes a letter to Cassandra on March 1 stating that he will sell her a 2011 Subaru Outback for $20,000 between March 1 and April 30. Peter's letter to Cassandra is
a firm offer. (CHP 18-NIK)
Marine Expeditions, Inc., pays Nate's Boats $4,000 to use an oceangoing vessel for a month. For the purposes of the UCC, this is
a lease (CHP 18)
Corn that fills County Grain Co-op's silo is fungible if the corn is
alike naturally, by agreement, or by trade usage (CHP 19)
MotorCo Inc. makes and sells auto parts to retail repair services, vehicle sales outlets, and consumer parts stores. On one MotorCo box is a label that reads "Contains one gross (144) sparkplugs, assorted sizes." This statement is
an express warranty (CHP 21)
MotorCo Inc. makes and sells auto parts to retail repair services, vehicle sales outlets, and consumer parts stores. On one MotorCo box is a label that reads "Contains one gross (144) sparkplugs, assorted sizes." This statement is
an express warranty (CHP 21-NIK)
Phoenix, a salesperson for Quality Fruit, Inc., shows Robert, a buyer for Sweet Home Fruit Company, samples of peaches, stating that any shipment will match the samples. This statement is
an express warranty (CHP 21-NIK)
Freddi buys bike shoes from Get n' Gear Store, telling the clerk that she wants the shoes to compete in High Pace Triathlon. The shoes break apart during the competition, causing Freddi to be injured in a fall. Get n' Gear most likely breached
an implied warranty of fitness for a particular purpose (CHP 21-NIK)
Nature's Products, Inc., sends its standard order form to Interbusiness Distribution Corporation (IDC) to evidence a sale of packing materials. IDC responds with its own standard purchase order form. Additional terms in the purchase order automatically become part of the contract unless
any of the choices (CHP 18)
To assemble and sell stoves and fireplaces, Hearth & Home, Inc., buys igniters, tubing, and other parts from Inflame Stove & Fireplace Parts and installs them without changing them. If the parts are defective, strictly liable for any damage caused by the defects
are Hearth & Home and Inflame (CHP 21- NIK)
Band Instruments, Inc., sells seventy-six trombones to Community & School Band Source, Inc. To avoid liability for most implied warranties, Band Instruments should state in writing that the trombones are sold
as is (CHP 21)
Fruit of the Plant, Inc., agrees to sell a certain quantity of a high-quality grain seed to Grange Co-op. Fruit of the Plant can obtain only half of the quantity ordered, so the seller also ships a lesser quality seed in twice the amount of the remainder of the order for the same price. Grange Co-op rejects the lesser quality seed. With time for performance not yet expired, Fruit of the Plant can
attempt to cure the defect. (CHP 20-NIK)
Replay Sports Stores and SportsPower Products, Inc., enter into a contract for a sale of trampolines. SportsPower Products is a merchant who deals in goods of the kind sold. Under the UCC, an implied warranty of merchantability arises
automatically. (CHP 21)
Sof' Chair Company contracts to deliver 100 chairs to Stuffy Furnishings Store on May 1 for which Stuffy agrees to pay. Sof' tells Stuffy on April 15 that delivery will be delayed until June 1. Stuffy may
await performance, sue Sof', or suspend its own performance. (CHP 20-NIK)
Marshall's Mattress Company advertises a special sale on mattresses on its website. The mattresses are normally sold for $1,000, but are advertised on the website for $499. The sale price does not, however, include shipping costs. Marshall's charges $250 for shipping any mattress. To avoid any claims of deceptive advertising, Marshall s should
be sure that it has clear and conspicuous disclosure of the shipping costs (CH 22)
Marshall's Mattress Company advertises a special sale on mattresses on its website. The mattresses are normally sold for $1,000, but are advertised on the website for $499. The sale price does not, however, include shipping costs. Marshall's charges $250 for shipping any mattress. To avoid any claims of deceptive advertising, Marshall's should
be sure that it has clear and conspicuous disclosure of the shipping costs (NIK CH 22)
Screen Perfect, Inc., and TV Stores enter into a contract for a sale of high-definition television sets. Screen Perfect ships goods that do not exactly conform to the contract in some details. TV Stores
can reject the entire shipment. (CHP 20)
Silas Paving Co. contracts to buy some construction machinery from Massive Earthmovers, Inc. Before either party performs, Massive sells its assets to Phoenix Equipment Corp. On learning of the sale, Silas is concerned about its contract with Massive. Silas should
demand assurances of performance from Massive (CHP 20)
Wellness Insurance Company offers health and medical insurance to consumers. Under current federal health-care laws, Wellness is prohibited from
denying coverage for preexisting conditions (CH 22)
iSharp, Inc., and Jenene, the owner of a Kitchen Time shop, orally agree to a sale of knives and other utensils for $12,000. Jenene gives iSharp a check for $4,000 as a partial payment. This contract is
enforceable to the extent of $4,000. (CHP 18)
Raul agrees to ship to Ben one hundred ceiling fans for $5,000. Raul initials his notes of the deal, which include the terms, and files the notes in his office. Ben initials his own notes of the deal, which include the terms, and files the notes in his office. Raul fails to ship the fans. Against Raul, as a contract, the deal is
enforceable, because Raul's initialed notes are a sufficient writing. (CHP 18-NIK)
Gear Motor Company makes cars. Federal law requires Gear to attach an information label that includes the Environmental Protection Agency's fuel economy estimate for a vehicle to
every new car. (NIK CH 22)
Dark Roast Products, Inc., makes espresso machines and sells one to the Eat at Joe's Café. Flo, the café's employee working at the coffee bar, is injured when the machine malfunctions. If the injury occurred as a result of a is representation about the product, Dark Roast is most likely liable for
fraud. (CHP 21)
HandiTools, Inc., sells power tools, power tool parts, and related supplies under "full" warranties. Under the Magnuson-Moss Warranty Act, this means that HandiTools must provide
free repair or replacement of any defective part. (CHP 21)
Kirsten receives unsolicited merchandise in the mail. Kirsten
may keep the merchandise without any obligation to the sender. (CH 22)
Blanche, a salesperson for Custom Restaurant Equipment, Inc., shows Dylan, a buyer for Eat n' Dine Company, display items in Custom's showroom, stating that any purchased equipment will match the display. This statement is
if the seller is a merchant who deals in goods of the kind sold. (CHP 2-NIK)
Custom Ceramics Corporation makes ceramic products for commercial uses, including heat-resistant tiles for industrial ovens. When damage occurs in an oven at Duramold Plastics, Inc., liability may be imposed on Custom Ceramics if the tiles sold to Duramold were
in a defective condition that was the proximate cause of the damage (CHP 21-NIK)
Custom Ceramics Corporation makes ceramic products for commercial uses, including heat-resistant tiles for industrial ovens. When damage occurs in an oven at Duramold Plastics, Inc., liability may be imposed on Custom Ceramics if the tiles sold to Duramold were
in a defective condition that was the proximate cause of the damage. (CHP 21)
Equipment Rentals Corporation (ERC) agrees to lease two backhoes to Dig & Fill Construction, Inc. Before any interest in the backhoes can pass from ERC to Dig & Fill, they must be
in existence and identified as the goods in the contract (CHP 19)
Elise and many other consumers complain to the Federal Trade Commission (FTC) that a Faux Diamonds Company ad is deceptive. The FTC's first step is to
investigate (NIK CH 22)
Mineral Resource Company contracts to provide several manufacturers with tin. When a cartel of tin-producing countries suddenly embargoes future shipments of tin to Mineral Resource so that it cannot fulfill its contracts, the distributor
is excused from the performance of its contracts (CHP 20-NIK)
In a dispute over a sale involving a bicycle, Dain argues that as to this deal Emil's Hobby Shop, where Dain bought the bike, is a merchant. A court may determine whether Emil's is a merchant by assessing whether
it holds itself out by occupation as having knowledge or skill unique to the bike in the transaction (CHP 18)
Pat's Pet Houses, Inc. sells shelters for animals under "limited" warranties. Under the Magnuson-Moss Warranty Act, this means that the warranties on the shelters from Pat's
limit the buyers' recourse in some fashion (CHP 21)
Mountain Bikes, Inc. (MBI), and Nero enter into a contract for a sale of a mountain bike. MBI, a merchant who deals in goods of the kind sold, makes implied and express warranties in connection with the sale. The Magnuson-Moss Warranty Act attempts to prevent deception in warranties by
making warranties easier to understand. (CHP 21)
Fresh Dairy, Inc., is the offeror and Gelato Ice Cream Company is the offeree under a unilateral sales contract in which Hector's Helado Corporation is also interested. Gelato is not notified of Fresh Dairy's performance within a reasonable time. Gelato
may treat the offer as having lapsed (CHP 18)
Dina takes out a student loan from Earnest Bank. When she fails to make the scheduled payments for six months, Earnest advises her of further action that it will take. This is a violation of
no federal law (NIK CH 22)
Merchants must ship orders within the time promised in their ads and notify consumers when orders cannot be shipped on time.
none of the choices. (NIK CH 22)
Wild Things, Inc. (WTI), in its ads, makes claims about its products that are obvious exaggerations and claims that are false but appear to be true. WTI may be subject to sanctions for
only the false claims. (NIK CH 22)
On May 1, Garage Prefabricators, Inc., agrees to sell four portable garages to Hiway Truck Service Center. Five days later, Hiway refuses delivery and cancels the contract. Garage Prefabricators is entitled to
resell the garages and recover any damages from Hiway. (CHP 20-NIK)
Elegant Carpets, Inc., and Fantastic Floors Stores enter into a contract for a sale of carpeting. Under a shipment contract, the seller must
place the goods into the hands of a carrier. (CHP 20)
Greg, a salesperson for Home Improvement Center, tells Irena, "This is the best floor sander I've ever seen." This statement is
puffery (CHP 21)
River Gear Company and Tours & Trips, Inc., enter into a contract on August 1 for the sale of fifty inflatable river rafts. Tours & Trips cancels the con-tract ten days later. River Gear is unable to sell the rafts to another buyer. River Gear can
recover the contract price from Tours & Trips but must hold the rafts for it. (CHP 20)
Steel Tool Company makes and sells tools. One of the tools is believed to be hazardous. Steel may be required to
remove the tool from the market. (NIK CH 22)
Hydro Source Company contracts to sell pumps, tanks, and water storage systems to Inflo Irrigation, Inc. Before the goods are delivered, Inflo indicates that it will not be able to pay. Hydro Source can
resell the goods and recover any damages from Inflo. (CHP 20)
Varoom Motors, Inc., allows Weber to take a Xtrem-brand motorcycle for a "test run." Weber tries the cycle for a few hours, returns, and buys it. This is
sale on approval (CHP 19)
Expert Stitching Corporation enters into a contract to sell denim clothing to Fine Fashion Company, which in turn sells a pair of jeans to Grady, a consumer. In contrast to standards that apply to consumers, the UCC imposes on merchants
special business standards (CHP 18)
Expert Stitching Corporation enters into a contract to sell denim clothing to Fine Fashion Company, which in turn sells a pair of jeans to Grady, a consumer. In contrast to standards that apply to consumers, the UCC imposes on merchants
special business standards (CHP 18-NIK)
Quik Collection Agency calls Pat several times a day, and some-times in the middle of the night, about an overdue bill that Regal Sporting Goods turned over to Quik for collection. This is a violation of
the Fair Debt Collection Practices Act. (NIK CH 22)
Corner Market sells groceries. Delta Food & Drug Store sells groceries and fills prescriptions. The party with the chief responsibility to monitor and enforce laws designed to protect consumers from unsafe food and drugs being sold is
the Food and Drug Administration (CH 22)
Grover signs an installment contract with Home Appliance Store to finance the purchase of new kitchen appliances—stove, refrigerator, dishwasher, microwave, and toasteroven—for $3,999. This transaction is subject to
the Truth-in-Lending Act (CH 22)
Tory applies for a line of credit which she intends to use for a once in-a-lifetime dream vacation. This transaction is subject to
the Truth-in-Lending Act. (CH 22)
Owen and Pablo enter into a contract for a sale of fifty Western saddles. Pablo pays, but Owen does not deliver. Pablo can normally recover as damages the difference between
the contract price and the market price (CHP 20)
Noni and Myra enter into a contract for a sale of clarinets and other wind instruments. Noni delivers, but Myra does not pay. Noni can normally recover as damages the difference between
the contract price and the market price. (CHP 20)
Wideload, Inc., makes, sells, and leases trucks, trailers, and other moving and hauling equipment for consumer use. Verna files a product liability suit against Wideload, alleging a design defect. In deciding whether to hold the maker liable, the court may consider
the expectations of the ordinary consumer (CHP 21-NIK)
Over the course of a year, Retail Marketers, Inc., sells goods from its inventory and one of its warehouses. In exchange, Retail receives checks and other items that substitute for cash, which Retail uses to repay a loan from Savings Bank. Article 2 of the UCC governs
the sale of the goods (CHP 18-NIK)
Bert's Bagels & Nosh, Inc., and other bakeries refer to a "baker's dozen" as consisting of a collection of thirteen baked goods. This is an example of
usage of trade (CHP 18)
Medico Inc. enters into a contract to sell medical supplies to New Hospital Corporation, which sells some of the items to Physicians Clinic, which later sells them to Oscar, a patient and consumer. Article 2 of the UCC applies to the sales transactions between
- New Hospital and Physicians Clinic only. (WRONG ANSWER) - Medico and New Hospital only. - Physicians Clinic and Oscar only. - all buyers and sellers. (CHP 18-NIK)
