BUS&201 Chapters 20-26
__________ represents a pattern of performance between the parties to a contract. A.) Course of dealing B.) Usage of trade C.) Course of trade D.) Usage of dealing
A.) Course of dealing
When particular goods have been selected by either the buyer or the seller, or both, as being the goods called for by the sales contract, the goods are said to be A.) identified. B.) actualized. C.) realized. D.) materialized.
A.) Identified
Most courts hold that when a customer takes an item from the shelf in a self-service store, there is: A.) no sale. B.) a sale. C.) a contract to sell. D.) a conditional sale.
A.) no sale.
When a buyer demonstrates in some way that the goods conform to the contract, the buyer has made a(n): A.) acceptance of the goods. B.) assignment of the goods. C.) substitution of the goods. D.) avoidance of the contract.
A.) acceptance of the goods.
If a contract contains a delivery term of ________, the seller's responsibility is to get the goods to the buyer. A.) FOB place of shipment B.) FOB place of destination C.) CIF place of shipment D.) CIF place of destination
B.) FOB place of destination
________ reserve auctions are those in which the goods must be sold regardless of whether the auctioneer is satisfied with the levels of the bids. A.) With B.) Without C.) Unqualified D.) Unrestricted
B.) Without
In an FOB Place of Destination shipment Title passes to the buyer: A.) when the goods are tendered at the seller's loading dock. B.) when goods are tendered to the buyer at the destination. C.) when goods are tendered to the carrier. D.) when the goods are identified by the seller.
B.) when goods are tendered to the buyer at the destination.
All of the following can be considered an acceptance by the buyer except: A.) An express statement of approval by the buyer. B.) The buyer's examination of the goods. C.) The buyer's retention of goods for an unreasonable period of time. D.) The buyer's modification of the goods.
B.) The buyer's examination of the goods.
If a contractually-specified mode of transportation is not available, the: A.) contract is automatically voided. B.) seller must make delivery by a commercially-reasonable substitute. C.) buyer must arrange to pick up the goods. D.) seller must make personal delivery.
B.) seller must make delivery by a commercially-reasonable substitute.
________ reserve auctions are those that give the auctioneer the right to withdraw the goods from the sale process if the bids are not high enough. A.) Qualified B.) Restricted C.) With D.) Without
C.) With
Goods that are not yet in existence or are not yet owned by the seller are _______ goods. A.) fungible B.) nonexistent C.) future D.) contingent
C.) future
A liquidation of damages clause in a consumer contract is enforceable if it: A.) is not in excess of twice the provable damages. B.) is agreed to by both parties to the contract. C.) reasonably attempts to estimate the actual harm caused by a breach. D.) is a reasonable amount designed to punish the breaching party.
C.) reasonably attempts to estimate the actual harm caused by a breach.
A _________ is a completed sale with an option for the buyer to return the goods. A.) conditional sale B.) contingency sale C.) sale or return D.) sale on approval
C.) sale or return
To be adequate, after a proper demand an assurance of performance must: A.) include consideration. B.) allow for the additional examination of the goods. C.) be sufficient to assure a reasonable person that the contract will be performed. D.) be written.
C.) be sufficient to assure a reasonable person that the contract will be performed.
The legal definition of a guest of a hotel requires that the person: A.) live at least five miles from the hotel. B.) is a guest of a registered occupant of the hotel. C.) is a transient. D.) stay at the hotel for at least 24 hours.
C.) is a transient.
The relationship of guest and hotelkeeper ends when the guest: A.) pays his or her bill. B.) advises the hotelkeeper of his or her departure. C.) leaves or ceases to be a transient. D.) has stayed for 30 days and becomes a boarder.
C.) leaves or ceases to be a transient.
If a buyer accepts goods but later claims the goods suffered from a substantial impairment, he is: A.) only required to prove the goods do not conform to the contract. B.) only required to prove the goods are shown to be worthless. C.) only required to prove the use to the buyer is materially different than the contract promised. D.) automatically canceling the contract.
C.) only required to prove the use to the buyer is materially different than the contract promised.
When goods are delivered to a common carrier for immediate shipment and while they are in transit, who is normally liable for any loss or damage to the goods? A.) the shipper B.) the consignee C.) the carrier D.) the individual designated as responsible in the bill of lading
C.) the carrier
When consigned goods are sold by a factor: A.) When consigned goods are sold by a factor: B.) title passes even if the goods have been stolen, provided the factor is ignorant of this fact. C.) the sale passes the title of the owner to the buyer. D.) strict compliance with the Federal Factors Act is required to pass title.
C.) the sale passes the title of the owner to the buyer.
In the absence of a liquidated damages clause and a proof of greater damages, the seller's damages are computed as: A.) 25% of the purchase price or $500, whichever is less. B.) 25% of the purchase price or $500, whichever is greater. C.) 20% of the purchase price or $500, whichever is greater. D.) 20% of the purchase price or $500, whichever is less.
D.) 20% of the purchase price or $500, whichever is less.
_________ goods are goods that, when mixed together, are indistinguishable. A.) Tangible B.) Intangible C.) Heterogeneous D.) Fungible
D.) Fungible
All of the following are covered by Article 2 of the UCC except: ______. A.) big screen TVs B.) commodities C.) custom-made furniture D.) gifts
D.) gifts
A common carrier is absolutely NOT liable for loss or damage to goods in all of the following situations except: A.) incidents arising from the inherent nature of the goods. B.) incidents involving a public enemy. C.) incidents involving acts of God D.) incidents involving mechanical breakdown of the vehicle.
D.) incidents involving mechanical breakdown of the vehicle.
If a seller elects to resell the goods remaining in the seller's possession after the buyer breaks the contract, the seller: A.) must always give notice of the sale to the original buyer. B.) is never required to give notice of the sale to the original buyer. C.) is required to follow strict standards in the resale of the goods. D.) is not required to give notice of the sale to the original buyer when the goods are perishable.
D.) is not required to give notice of the sale to the original buyer when the goods are perishable.
If shipped goods are damaged or destroyed after risk of loss passes: A.) the contract is avoided B.) the seller has breached the contract C.) the buyer has the option to accept or not accept the goods D.) it is the buyer's loss
D.) it is the buyer's loss
In a ___________, no sale takes place (meaning there is no transfer of title) until the buyer accepts the goods. A.) conditional sale B.) contingency sale C.) sale or return D.) sale on approval
D.) sale on approval
When goods are sold at an auction in separate lots, the title to each lot passes: A.) when the winning bidder tenders payment for the lot. B.) when the lot is received by the winning bidder. C.) only when all lots have been sold. D.) when the auctioneer announces that the lot in question has been sold to the bidder.
D.) when the auctioneer announces that the lot in question has been sold to the bidder.
The right to ___________ is a second chance for a seller to make a proper tender of conforming goods. A.) rehabilitate B.) repair C.) heal D.) cure
D.) cure
The commercially reasonable charges incurred by a seller in caring for goods after the buyer's breach are recoverable by the seller in an action for damages as: A.) contract damages. B.) punitive damages. C.) additional damages. D.) incidental damages.
D.) incidental damages.
If the buyer has paid for the goods in advance but revokes his acceptance when the goods arrive, he: A.) can resell the goods. B.) must prove the nonconforming defect was known at the time of the original acceptance. C.) return them within ten (10) days and wait for the refund. D.) may retain possession of the goods as security until the refund has been paid.
D.) may retain possession of the goods as security until the refund has been paid.
A merchant cannot revoke a firm offer to buy or sell goods if the merchant has: A.) promised to keep the offer open. B.) declared in the presence of two or more reputable witnesses that the offer will be kept open. C.) received consideration to keep the offer open. D.) stated in a signed letter that the offer would not be revoked for a specified period of time.
D.) stated in a signed letter that the offer would not be revoked for a specified period of time.
The obligations of the parties to a sales contract include: A.) the seller's duty to deliver the goods to the buyer's place of business. B.) the buyer's duty to always accept the goods. C.) the seller's duty to arrange for appropriate transport. D.) the buyer's duty to pay for the goods.
D.) the buyer's duty to pay for the goods.
"Without reserve" auctions give the auctioneer the right to withdraw the goods from the sale process if the bids are not high enough.
False
A bailment is a special form of a sale of goods in which possession is transferred to a bailee.
False
A common carrier is liable for all delays in the delivery of goods.
False
A contract carrier holds itself out as willing to furnish transportation for compensation without discrimination to all members of the public who apply.
False
A contract that has elements of both goods and services is always classified as a contract for the sale of goods.
False
A custodian who holds money for the benefit of a minor under the Uniform Gifts to Minors Act may choose to use the money to send the minor's sister to summer camp.
False
A document of title is not sufficient for a creditor to take interest in goods.
False
A firm offer is effective for three months, but only if the merchant receives consideration.
False
A public warehouser is statutorily required to insure all the goods.
False
A sale of goods is defined under UCC Article 2 as transfer of title to intangible property for a price.
False
A sales contract may provide that in case of breach, no damages may be recovered or no consequential damages may be recovered.
False
A seller's insurable interest in goods always terminates with the passage of the title to the buyer.
False
An output or requirement contract is not enforceable unless the parties include an estimate of prospective amounts.
False
Any modification of a sales contract between merchants must be supported by some form of consideration.
False
If a buyer chooses to cover, the substituted goods purchased must be identical to the contract goods.
False
If a buyer materially breaches the contract, the seller may not cancel the contract until it notifies the buyer.
False
If a thief sells stolen property to a good-faith buyer, the buyer acquires title to the property.
False
If adequate assurance of performance is not given within five (5) business days from the time of the demand for assurance, the demanding party may treat the contract as repudiated.
False
In a bailment, the bailee does not necessarily have to be aware that the bailed goods were placed within the Bailee's exclusive possession or control.
False
In a bailment, the person who turns over the possession of bailed property is the bailee, and the person who accepts possession is the bailor.
False
In certain cases, real property can constitute a bailment.
False
In order for a bailment to be valid, the bailor must be the owner of the subject property.
False
In states that follow the community property tradition, property acquired after the marriage belongs solely to the party who acquired it.
False
Joe rents a unit at the local Stor-More storage complex and places a lock on the unit's door. Joe has created a bailment with Stor-More.
False
Joint tenancy and tenancy in common both feature the right of survivorship.
False
Myra, a person who attended a wedding reception at the Hotel Miramar, is injured on the dance floor. Miramar is liable to Myra for her injuries.
False
Personal property is tangible and immovable.
False
Rejection of an improper tender of goods constitutes terminates the buyer's options for recovery.
False
Severalty is a form of property ownership by two or more persons.
False
Someone who finds and resells stolen property passes on a good title to a good faith purchaser.
False
Substantial impairment requires proof that goods are worthless.
False
The CISG governs all contracts between parties in the countries that have ratified it.
False
The UCC has adopted the common law 'mirror image' rule.
False
The UCC requires assurances to be in writing and signed by the company President.
False
The person on whom a demand for assurance is made, must reply in writing for the assurance to be deemed "adequate."
False
The standard for rejection requires that any defect in the good be material.
False
The statement, "I doubt that I can perform the contract," is a repudiation of the contract.
False
The term "course of dealing" refers to the language and customs of an industry.
False
Title to personal property can be acquired by gift or purchase or stolen property.
False
To be engaged in warehousing, an enterprise must have appropriate storage buildings.
False
To recover damages, a buyer must give the seller notice of the breach within three (3) days.
False
Under both the CISG and the UCC, a buyer may reject goods only if the tender of the goods is a fundamental breach of the contract.
False
Unless otherwise agreed by the parties, payment by a buyer requires payment either in cash or by certified check.
False
When a person picks out a custom necktie and purchases it, the transaction involves fungible goods.
False
When the price of the goods is $500 or more, a writing signed by the defendant is required in all cases.
False
Consequential damages are available to the buyer but not to the seller.
False
When a method of transportation called for by a contract becomes unavailable for any reason, the contract is automatically voided.
False
When a sales contract is broken by the buyer, the seller has only the remedies of lien and resale available.
False
A bailee's lien gives the bailee the right to keep possession of the bailed property until reasonable charges for storage and/or repairs are paid.
True
A bill of sale can be used as proof of an otherwise oral agreement.
True
A buyer has a right to insist that all the goods be delivered at one time.
True
A buyer has the right to accept some commercial units of a shipment and reject other commercial units.
True
A buyer may reject the goods for any defects in the goods.
True
A buyer may revoke acceptance because of a seller's failure to complete promised repairs.
True
A buyer revokes her acceptance when she returns a raincoat to the seller that shrank in the rain.
True
A factor is a special type of bailee.
True
A gift causa mortis is considered a conditional gift.
True
A gift is a free transfer of the title to property.
True
A liquidated damages clause is a contractually-agreed upon amount of damages to be paid in the event of default or breach.
True
A right in a thing is considered property.
True
A sale by a factor can pass title to goods from the consignor to the purchaser.
True
A sale or return is a completed sale with an option for the buyer to return the goods.
True
A secured transaction is a pledge of property by the buyer that enables the seller to take possession of the goods if the buyer fails to pay the amount owed.
True
A warehouse receipt may be either negotiable or nonnegotiable.
True
An offer to buy or sell goods may be accepted in any manner that is reasonable under the circumstances.
True
An oral contract to sell specially manufactured goods is enforceable if the goods cannot be sold to other buyers, and the manufacturer has made a substantial progress in manufacturing the goods.
True
An ordinary gift made between two living persons is called an inter vivos gift.
True
Consumer protection law prohibits the waiver of defenses in consumer contracts.
True
Goods are identified when they have been selected as the goods called for by a sales contract.
True
Goods physically existing and owned by a seller at the time of a transaction are called existing goods.
True
If a buyer purchases goods on approval, the buyer's creditors cannot reach such goods until there is an approval.
True
If a buyer refuses to pay for goods after an acceptance that was not revoked, the seller may bring action to recover the purchase price and any incidental damages.
True
If a contract calls for both rendering services and supplying materials to be used in performing the services, the contract is classified according to its dominant element.
True
If a party refuses to perform a contract when the time for performance arises, the other party has the right to seek assurances.
True
If a warehouse receipt provides for the delivery of the goods "to the bearer," the receipt may be negotiated by transfer of the document.
True
If goods are specially manufactured, unique, or rare, a buyer may have the right to specific performance.
True
In a sale or return transaction, until the actual return of the goods is made, title and risk of loss remain with the buyer.
True
In an FOB place of shipment contract, the seller's obligation ends when he delivers the goods to a carrier for shipment.
True
In an FOB shipment contract, title to the goods pass to the buyer when goods are delivered to the carrier.
True
Most courts consider an engagement ring to be a conditional gift.
True
Personal property is lost when an owner does not know where it is located but intends to find it.
True
Proper delivery of a car would be satisfied with the delivery of a key and a title document.
True
Sales law includes special rules that apply to merchants.
True
Suppose NovaTek sells $10,000 worth of goods to BestGear on credit and ships the products. During shipment NovaTek discovers BestGear is insolvent. NovaTek can stop shipment of the product if BestGear has not provided assurances.
True
The provisions of Article 6 concerning bulk transfers are designed to protect creditors.
True
The storage of goods in a warehouse and the shipment of goods by a common carrier are examples of special bailments.
True
Title to abandoned property is acquired by the first person who obtains possession and control of the property.
True
Title to goods can be transferred without the actual delivery of the goods involved.
True
UCC Article 2 applies not only to contracts for the sale of familiar items of personal property, such as automobiles or chairs, but also to the transfer of commodities, such as oil, gasoline, milk, and grain.
True
Unclaimed property is often transferred to the government under the concept of escheat.
True
Upon the death of a joint tenancy with a right of survivorship, that deceased joint tenant's share passes to the remaining tenants equally.
True
Warehouse receipts and bills of lading are both considered documents of title.
True
When a buyer has broken a sales contract, the seller may resell the goods or the balance of them in the seller's possession.
True
When a contract to sell identified goods does not specify a place of delivery, the goods are considered delivered at the seller's place of business.
True
When an oral contract is made to sell a 75-inch LED LCD TV for $6,800, payment and acceptance of part of the purchase price avoids the bar of the statute of frauds.
True
With regard to transactions between merchants, failure to repudiate a confirming letter within ten (10) days after receipt binds the non-signing merchant, just as if he had signed the letter or a contract.
True
Wrongful dominion over a principal's tangible personal property is a form of conversion.
True
A buyer can be barred from claiming a breach if the sales contract expressly states that the buyer will not assert any defenses against the seller.
True
A buyer who cancels a sales contract because the seller fails to deliver the goods is entitled to recover as much of the purchase price as had been paid.
True
If a buyer refuses to accept specially manufactured goods, the seller has the right to keep the goods, and recover the full purchase price as damages.
True
Proof of substantial impairment of the value of a contract to the buyer is required to justify revocation of acceptance.
True
Some courts allow sellers to recover the profits they would have made if the buyer had completed the transaction.
True
The UCC imposes a higher standard of good faith on merchants than on nonmerchants.
True
The seller's right to cure a defective tender means that the seller will be given a second chance to make a proper tender of conforming goods.
True
______ is a transfer of possession - but not title - to personal property. A.) A bailment. B.) An option to purchase. C.) A gift D.) A consignment
A.) A bailment.
Which method of payment gives the buyer credit by postponing the time for payment? A.) a promissory note B.) a check C.) a draft D.) a certified check
A.) a promissory note
Harvested crops would be an example of ______. A.) existing goods. B.) tangible goods. C.) future goods. D.) intangible goods.
A.) existing goods.
When a seller breaches a contract for the sale of goods to a buyer, the buyer is entitled to specific performance of the contract if the: A.) goods are unique. B.) market cost of the goods has increased. C.) goods can be purchased in any major city in the country. D.) buyer's customers will be disappointed if the buyer does not obtain the goods.
A.) goods are unique.
A buyer may reject a tender of delivery: A.) if the goods do not conform to the contract in some way. B.) only if the goods have a substantial defect. C.) unless the seller promises to cure the defective tender. D.) unless the goods have been sold on credit.
A.) if the goods do not conform to the contract in some way.
An agreement to periodically deliver home-heating oil to a residential customer that does not indicate the duration of the contract A.) is enforceable for a reasonable period of time. B.) lasts for one delivery only. C.) is not a legally-enforceable contract. D.) constitutes a bulk transfer.
A.) is enforceable for a reasonable period of time.
The statute of limitations for breach of a sales contract: A.) may be reduced between merchants to one year. B.) may be expanded by the buyer and the seller to six years. C.) begins to run from the signing of the contract. D.) always requires a notice to the seller to activate the statute.
A.) may be reduced between merchants to one year.
A seller's right to retain possession of goods until the seller has been paid is called a: A.) seller's lien. B.) buyer's lien. C.) merchandise estoppel. D.) nonpayment tort.
A.) seller's lien.
When a buyer has possession of goods after rightfully rejecting them, the buyer is treated: A.) the same as a seller in the possession of goods after default by a buyer. B.) as being strictly liable for the safety of the goods. C.) the same as if an entrustment had been created. D.) as an insurer of the goods until the seller retakes possession.
A.) the same as a seller in the possession of goods after default by a buyer.
If appropriate assurance is not given in response to a demand for assurance of performance, the demanding party may: A.) treat the contract as repudiated. B.) sue for libel. C.) file for an insurance payment. D.) not replace the repudiated contract.
A.) treat the contract as repudiated.
If a contract for the sale of goods omits the price to be paid, the: ______. A.) contract is void because it is too indefinite to be enforced. B.) buyer is required to pay a reasonable price for the goods. C.) buyer can pay whatever price the buyer in good faith believes is a proper price. D.) seller can rightfully charge whatever price the seller in good faith believes is a proper price.
B.) buyer is required to pay a reasonable price for the goods.
Which term is not required in a writing in order to satisfy the statute of frauds? A.) language indicating that a sale or contract to sell has been made B.) the price of the goods C.) the quantity of goods involved in the transaction D.) the signature of the defendant
B.) the price of the goods
If a buyer procures the same or similar goods as those involved in the sales contract breached by the seller, the buyer: A.) loses all rights to prosecute for breach. B.) is said to have validated the seller's action. C.) is said to have covered. D.) is also in breach.
C.) is said to have covered.
Consumer leases: A.) must always be evidenced by a writing. B.) are always three- party transactions. C.) require the lessor to make all usual warranties made by a seller in a sale of goods.. D.) all of these.
C.) require the lessor to make all usual warranties made by a seller in a sale of goods..
Carol, who is planning to move out of town, offers to sell her sofa to her friend Betty for $750. Betty says, "I'll take it, and I would like you to throw in the coffee table along with it." Under Article 2 of the UCC, Carol and Betty have: A.) no contract, because of the mirror image rule. B.) no contract because Carol did not accept Betty's counteroffer. C.) a contract for both the sofa and coffee table. D.) a contract for the sofa only.
D.) a contract for the sofa only.
Which of the following is not an example of incidental damages recoverable by a seller? A.) expenses for the care of the goods after the buyer's breach B.) expenses for transportation of the goods after the buyer's breach C.) expenses for resale of the goods after the buyer's breach D.) expenses for the attorney's fees after the buyer's breach
D.) expenses for the attorney's fees after the buyer's breach
As a general rule, courts will __________ in recovering money or property transferred under an illegal agreement. A.) assist a commercial buyer B.) assist a non-commercial buyer C.) assist an institutional buyer D.) not aid either party
D.) not aid either party
A seller may cancel a sales contract if the buyer does any of the following except: A.) wrongfully rejects the goods. B.) repudiates the contract. C.) fails to make a payment due on or before delivery. D.) rejects an improper tender.
D.) rejects an improper tender.
Which of the following situations create(s) an exception to the statute of frauds writing requirement? A.) non-resellable goods B.) receipt and acceptance C.) payment D.) specially manufactured goods
D.) specially manufactured goods
A contract involving both services and goods is classified as a contract for the sale of goods if: A.) the services are to be performed upon the goods. B.) the services cannot be performed unless the goods are supplied. C.) no charge is made for the services. D.) the sale of goods is the dominant aspect of the transaction.
D.) the sale of goods is the dominant aspect of the transaction.