Business Law II: Brief Hypotheticals (Ch 20, 21, 22, 23, 29, 30, & 31)
Hyster Material Handling sells 300 order pickers to Amazon. The order pickers cost $25,000 each, and each comes with a maintenance contract that costs $2,000 per year. After six months, a dispute arises between the parties when Hyster fails to perform all the monthly maintenance required under the contract, and Hyster decides to sue. Because the contract covers both goods and services, to determine what law applies to this contract the court will: a. apply the predominant-factor test and determine that the common law applies. b. apply the merchant test and determine that UCC Article 2 applies. c. apply the predominant-factor test and determine that UCC Article 2 applies. d. apply the merchant test and determine that the common law applies.
c
Sylvia is really struggling with her finances. She is getting further and further behind on payments to all her creditors. Sylvia is determined, however, that she will not file bankruptcy. Some of Sylvia's creditors get together to discuss what they can do to force Sylvia to file bankruptcy so they can at least recover some of the funds owed to them. Sylvia owes money to eight different creditors. Sylvia's creditors can force her into an involuntary bankruptcy: a. if two or more creditors having a collective claim of $15,775 or more file the involuntary bankruptcy petition. b. under no circumstances; a bankruptcy petition can only be filed by the debtor. c. if three or more creditors having unsecured claims of $15,775 or more file the involuntary bankruptcy petition. d. if one or more creditors having a claim of $15,775 or more files the involuntary bankruptcy petition.
d
Tanya is in the business of selling rubber mats. Ralph is in the business of selling real estate. Logan is in the business of selling stocks and bonds. Article 2 of the U.C.C. governs the sale of the items sold by: a. Tanya, Ralph, and Logan. b. Ralph and Tanya only. c. Ralph only. d. Tanya only.
d
Glen purchases a used church bus and plans to renovate it and use it as a camper. Glen rips out the seats, installs twin beds, builds a custom booth for eating and builds a countertop with a refrigerator and microwave underneath. Glen's neighbor Bill installs custom counters, so Glen asks Bill to do the finishing work on the booth and countertop. They agree on a price of $35 per hour for labor plus the cost of materials, payable in cash. Glen pays for the materials as soon as they are purchased. When the work is finished, Bill returns the bus to Glen and gives him an invoice for $700. Three days later, Glen refuses to pay the bill because he believes it is too high. Does Bill have an artisan's lien on the bus? a. No, Bill does not have an artisan's lien on the bus because Bill does not have possession of the bus. b. Yes, Bill has an artisan's lien because he performed work on the bus for value and in good faith. c. Yes, Bill has an artisan's lien on the bus because he improved the value of the bus. d. No, Bill does not have an artisan's lien on the bus because the payment terms do not include financing terms.
a
Paul owns his own home, which is financed with Green Forest Home Loans. Paul has been paying his mortgage for four years and is concerned that his remaining balance is not being reduced appropriately. When Paul investigates, he discovers his payments are not being credited on the day they are received, which means that more interest is accruing on the loan than there should be. Paul files a complaint with the Consumer Financial Protection Bureau (CFPB), which sends the complaint to Green Forest. Once Green Forest receives the complaint: a. Green Forest will have 15 days to respond to the complaint and 60 days to resolve the issue. b. Green Forest must respond to the complaint within 30 days. c. Green Forest must respond to the complaint within 120 days. d. Green Forest must respond to the complaint within 90 days.
a
You are behind on your credit card payments, and the credit card company starts calling you to try to collect the debt. You know the credit card company has your work telephone number, so you are a bit concerned the credit card company might try to call you at work. You don't want this to happen, because one of your coworkers got in trouble just a couple of weeks ago for receiving calls from a creditor. Do you think there is anything you can do to prevent the credit card company from contacting you at work? a. Yes, you can advise the credit card company that your employer prohibits such contact. b. No, because your employer's telephone number is public, and anyone can call a public number. c. Yes, as long as the credit card company is making the calls after 8:00 a.m. or before 9:00 p.m. d. No, the credit card company can call you at any telephone number that you have provided to it.
a
You find an antique roadster for sale. It's one of a kind; exactly the kind of car you've always dreamed of owning! You offer $30,000 for the car, and the owner agrees. Just before you are scheduled to pick up the car, however, the owner changes his mind. Your dream is gone in an instant! What do you think would happen if you sue the owner to force him to honor the deal? a. A court would probably require the owner to sell you the car. b. A court might give you the difference between the price of this car and the price you would have to pay to buy the car from someone else. c. A court would do nothing; deals fall through all the time. d. A court might award you money damages.
a
Ahmir agrees to purchase a shipment of oriental rugs from Oriental Rug Company for the price of $50,000, to be delivered on August 15. On July 15, Ahmir notifies Oriental that he no longer wants to purchase the rugs. Oriental spends $1,000 to advertise the rugs and obtains a new purchaser who buys the rugs for $40,000. Oriental then sues Ahmir for breach of contract. If Oriental is successful in its breach of contract suit against Ahmir, Oriental may receive: a. $10,000 from Ahmir. b. $11,000 from Ahmir. c. nothing from Ahmir, because Oriental was successful in reselling the rugs. d. $50,000 from Ahmir.
b
Herman is opening up a new restaurant, The Krusty Krab. Herman purchases equipment for his kitchen from Restaurant Supply, Inc. on credit, and signs a security agreement. Restaurant Supply wants to make sure that this loan is properly secured. Because Restaurant Supply cannot retain possession of the property, Restaurant Supply can: a. file a financing statement with the office of the appropriate government official. b. do nothing; Restaurant Supply already has a security agreement signed by Herman. c. file a notice of loan with the office of the appropriate government official. d. post notices in the restaurant that Restaurant Supply has a lien on the equipment.
a
Aubrey has been accepted into medical school, a most expensive undertaking. Aubrey has student loans and grants that pay part of the expense, but not all; she still needs $5,000. Aubrey asks her family friend, Clara, if Aubrey can borrow $5,000 and offers to pledge her mother's diamond necklace to ensure she repays the loan. Clara agrees and gives Aubrey $5,000. Aubrey insists that Clara take the diamond necklace and keep it until Aubrey repays all of the $5,000. To make sure that Clara's security interest is perfected, Clara needs to: a. do nothing, because she has possession of the necklace. b. file a written security agreement and financing statement, listing the necklace as collateral on both. c. file a written financing statement listing the necklace as collateral. d. file a written security agreement listing the necklace as collateral.
a
Wilson and Everett have a contract under which Everett is to supply to Wilson 5,000 sets of bicycle spokes by September 15. The contract provides that any lawsuit for breach of contract must be brought within three months of the breach. Everett delivers the 5,000 bicycle spokes to Wilson on September 15. Wilson refuses the delivery, however, because half of the spokes are broken. Everett refuses, after repeated requests from Wilson, to replace the shipment. On January 10, Wilson files a lawsuit against Everett for breach of contract. Wilson's lawsuit against Everett for breach of contract: a. will not be dismissed because parties cannot reduce the period for bringing such a lawsuit to less than one year. b. will be dismissed because, under the U.C.C., the statute of limitations for bringing such a lawsuit is within thirty days after the action accrues. c. will be dismissed because the contract limits the time in which to bring such a lawsuit to three months. d. will not be dismissed because, under the U.C.C., the statute of limitations for bringing such a lawsuit is within four years after the action accrues.
a
You are running low on funds, so you ask your best friend for a loan. To show him how serious you are, you offer your Rolex watch as collateral. Your friend gives you $500, and you give him your Rolex to hold until you repay him, which you promise to do within three months. What do you think will happen if you refuse to repay the $500 to your friend? a. He can keep the watch only if you agree to let him keep it. b. He can keep the watch. c. He can keep the watch, but he must give you the difference between what the watch is worth and the amount he loaned to you. d. He must return the watch.
b
You want to buy a used car. You see an ad stating that a late-model car is for sale at a good price. You call the seller of the car and schedule a time for you to test drive it. While you are looking over the car, the seller says it is a great car, it rides smoothly, it is a good car for families, and the car also gets great gas mileage at 32 miles per gallon of gas. All of the seller's statements convince you to purchase the car. Which of the following creates an express warranty? a. It is a good car for families. b. The car gets 32 miles per gallon of gas. c. It rides smoothly. d. It is a great car.
b
Thomas Leisure Cruises, located in Seattle, purchases seventeen pontoons from Harbor Boat Company, located in San Francisco, for $25,000 each, FOB San Francisco. Harbor Boat Company places the pontoons on a train in San Francisco for shipment to Seattle. While traveling to Seattle, the train is involved in an accident with a school bus, and the pontoons are destroyed. Who bears the risk of loss? a. Thomas Leisure Cruises and Harbor Boat Company will equally share the risk of loss. b. Harbor Boat Company. c. Thomas Leisure Cruises. d. Neither Thomas Leisure Cruises nor Harbor Boat Company.
c
Adelie is nineteen years old and about to buy her first car from Car Mart, a dealership that finances its own car loans. Adelie has found her perfect car, and at a great price - $7,000. Because Adelie does not have an established credit record, and her income is fairly low, Car Mart tells Adelie that she must have a co-signer to finance the car. Adelie's Aunt Gertrude agrees to co-sign on the car loan. After Adelie has made payments for six months, Adelie renegotiates the terms of the car loan, extending the payments for an additional twenty-four months. Adelie does not notify Aunt Gertrude of this change to the agreement. Six months later, Adelie stops making payments on the loan, leaving a remaining balance of $5,000. If Car Mart seeks payment from Aunt Gertrude without demanding payment from Adelie first: a. Aunt Gertrude will not have to pay because Car Mart must pursue Adelie for payment first. b. Aunt Gertrude will have to pay because she is a guarantor on the loan. c. Aunt Gertrude will have to pay because she is a surety on the loan. d. Aunt Gertrude will not have to pay because there was a material modification in the loan terms.
d
Wyatt needs $2,000 to go on vacation. After trying unsuccessfully to come up with a plan to obtain the money, Wyatt comes up with the perfect plan: Wyatt offers to have his mother's jewelry collection cleaned for her, but instead, he takes the jewelry to Perfect Pawn Shop and pledges his mother's jewelry collection as collateral for a loan of $2,000. The jewelry is worth $10,000, so Perfect Pawn Shop agrees to the deal, gives Wyatt the $2,000, and keeps the jewelry. Does Perfect Pawn Shop have a security interest in the jewelry? a. Yes, because Perfect Pawn Shop gave value for the jewelry and has possession of the jewelry. b. No, because no financing agreement was filed. c. Yes, because the jewelry is worth much more than $2,000. d. No, because Wyatt does not own the jewelry.
d
Best Dollar Store publishes an advertisement in the local newspaper promoting its new baby diapers that are good for the environment. The advertisement states that the diapers are made from entirely biodegradable materials and that each diaper will completely biodegrade within two months and become a natural part of the soil. Leon is very concerned about the environment and has created a compost heap in the pasture behind his home. Leon purchases a package of the diapers for his child, and, as they are soiled, he adds them to the compost heap. Six months later, the diapers have not even begun to degrade. Best Dollar Store has violated: a. its express warranty that the diapers will biodegrade within two months. b. nothing, because the statement about the diapers biodegrading within two months is an opinion. c. its implied warranty that the diapers will biodegrade within two months. d. nothing, because an advertisement is not a warranty.
a
Alyah purchases seven 1873 Winchester Muskets from Heinz Antique Firearms to sell in Alyah's antique store. The price for the rifles is $4,200 each. Alyah pays $2,000 at the time of purchase and promises to pay the balance when the guns are sold, as well as interest on balance until the guns are sold. Heinz Antique Firearms wants to make sure it eventually would get its money, so Heinz purchases insurance on the muskets. Before any of the muskets are sold, a burglar breaks into Alyah's antique store and steals the muskets. Will Heinz Antique Firearms be able to collect on the insurance policy covering the muskets? a. Yes, Heinz can collect on the insurance policy because the goods have been identified to the contract. b. Yes, Heinz can collect on the insurance policy because Heinz has an insurable interest in the muskets. c. Yes, Heinz can collect on the insurance policy because a seller always retains an insurable interest on any products it sells. d. No, Heinz cannot collect on the insurance policy because it does not have an insurable interest in the muskets.
b
Homers Frozen Foods has a two-year contract with Johnson Farms to purchase all the russet potatoes that Johnson can produce for two dollars per kilogram. When the price of potatoes goes up during the second year of the contract, Johnson Farms breaches its contract with Homers and sells its potatoes to Land of Lakes Foods. Homers purchases the potatoes it needs from Homegrown Farms at a price of three dollars per kilogram. If Homers sues Johnson Farms for breach of contract, the likely result will be: a. Johnson Farms will have to pay Homers one dollar per kilogram for all potatoes purchased during the entire term of the contract. b. Johnson Farms will have to pay Homers one dollar per kilogram for the potatoes that Homers purchases from Homegrown Farms during the remainder of the contract. c. Johnson Farms will be ordered to specifically perform the contract. d. Johnson Farms will have to pay nothing, because a spike in market prices is a sufficient reason to terminate the contract.
b
John Michael purchased a surfboard from Surf's Up beach supply store. The label on the surfboard stated: "Surf's Up makes no warranties about the quality of this product." The first time John Michael took the surfboard out on the water, the board broke in half when it hit a small wave. John Michael demanded his money back, claiming that the store had breached the warranty of merchantability by selling him a surfboard that could not be used for normal surfing. The store refused to refund John Michael's money, stating that the label clearly stated there were no warranties on the product. If John Michael sues the store, the court will likely find: a. that the disclaimer on the surfboard was not an effective disclaimer of the warranty of fitness for a particular purpose. b. .that the disclaimer on the surfboard was not an effective disclaimer of the warranty of merchantability. c. that the disclaimer on the surfboard was an effective disclaimer of the warranty of merchantability. d. that the disclaimer on the surfboard was an effective disclaimer of the warranty of fitness for a particular purpose.
b
Juan and Sarah both lost their jobs. They struggled for several months trying to keep up with their first and second mortgage payments, but were unable to make the payments. They then received a notice of default from the original mortgage holder, and, later, a notice that the house would be sold at auction. After the auction, Juan and Sarah: a. will receive the funds from the sale, but the mortgage holders can then sue Juan and Sarah for amounts owed to the mortgage holders. b. will only receive any funds that are left over after both mortgage holders are paid. c. will not receive any funds, even if the house sells for more than is owed. d. will receive only the deficiency.
b
Koko purchases a ski boat from Marina Boating Supply for $24,000 cash. Koko has not yet completed the arrangements for her slip in the local harbor where she will dock the boat, so Koko arranges with Marina to keep the boat at Marina's facility until Koko can make arrangements. Koko promises Marina that she will pick up the boat within two weeks. One week later, a hurricane destroys the boat. The risk of loss of the ski boat falls on: a. Koko. b. Marina Boating Supply. c. Marina Boating Supply and Koko equally. d. neither Marina Boating Supply nor Koko.
b
Mulligan Pro Shop agrees to provide 10,000 grade AAAAA golf balls to Golf Kingdom each month for the next four months. For the first three months, Mulligan delivers 10,000 grade A golf balls instead, and Golf Kingdom accepts the delivery. In month four, Mulligan again delivers 10,000 grade A golf balls to Golf Kingdom, and Golf Kingdom rejects the shipment. If Mulligan sues Golf Kingdom for breach of contract: a. Golf Kingdom will win, because the goods were not perfectly tendered. b. Mulligan will win, because Golf Kingdom accepted the prior nonconforming shipments. c. Golf Kingdom will win, because usage of trade is an exception to the perfect tender rule. d. Mulligan will win, because it tendered the entire 10,000 golf balls.
b
Myra purchases a refrigerator from Howard Appliances for $800 for use in her home. Myra pays $200 down and signs an installment sales contract with Howard Appliances to finance the $600 balance. The installment sales contract provides that Myra will pay $50 per month until the $600 balance, plus five percent interest, is paid in full. To perfect its security interest in the $600, Howard must: a. file a financing statement with the appropriate government office. b. do nothing. c. file the installment sales contract with the secretary of state. d. file the installment sales contract with the county clerk.
b
On October 25, Alvin agrees to purchase 5,000 baseballs from Sports USA for $15,000. The baseballs are stored in Waring's Warehouse. On November 1, Alvin pays Sports USA $15,000, and on November 2 Sports USA provides Alvin with a warehouse receipt. On November 10, Alvin picks up the 5,000 baseballs from Waring's Warehouse to transport them to his facility. The title to the baseballs passes to Alvin: a. on October 25, when Alvin and Sports USA formed the contract for the sale of baseballs. b. on November 2, when Sports USA provides Alvin with the warehouse receipt. c. on November 10, when Alvin picks up the 5,000 baseballs from Waring's Warehouse. d. on November 1, when Alvin pays Sports USA $15,000.
b
Saundra purchases an RV for $30,000, on credit, from Outdoor RV Sales, which finances the transaction. Saundra makes payments on the RV for the first eight months, but then Saundra runs into financial difficulty and stops making the payments. Because Saundra stops making the payments on the RV, Outdoor RV Sales: a. must repossess the RV, and either retain or resell the RV and apply the proceeds to the debt. b. can take peaceful possession of the RV or pursue a judicial remedy. c. can repossess the RV by any means necessary. d. must file a court action to obtain a judgment for the balance remaining on the loan.
b
Abram purchased a four-wheeler from Outback Camping Supply Company. The four-wheeler came with a one-page statement about the four-wheeler that said: "Warranty. This four-wheeler is fully warranted for twelve months." That was the only information Abram received about any warranty. Does this warranty violate the Magnuson-Moss Warranty Act? a. It does not violate the Magnuson-Moss Warranty Act because written warranties are not required under the Act. b. It does not violate the Magnuson-Moss Warranty Act because the Act applies to sales of services, not sales of consumer goods. c. It violates the Magnuson-Moss Warranty Act by not providing important presale disclosures. d. It does not violate the Magnuson-Moss Warranty Act because it provides a full warranty.
c
Angela is very far behind on her credit card payments! The interest keeps piling on month after month because Angela can only make the minimum payments. The balances on the cards are actually increasing each month instead of decreasing. Angela has a decent job but just doesn't make the kind of money needed to pay down her debt. Because Angela has a job and, therefore, a steady income, Angela's creditors want to force her to file a Chapter 13, so the trustee can make sure the creditors receive payment for at least part of the amount Angela owes them. If Angela's creditors attempt to file a Chapter 13 bankruptcy: a. they will be successful if three or more creditors having unsecured claims of $15,775 or more file the Chapter 13 petition. b. they will not be successful unless they get Angela's approval on their petition. c. they will not be successful, because only the debtor can file a Chapter 13. d. they will be successful if two or more creditors having a collective claim of $15,775 or more file the Chapter 13 petition.
c
Dakotah is the cheerleading coach for Northfield High School. Dakotah places an order by telephone with Cheerleader Supply Inc. for thirty cheerleader uniforms. Each uniform is to be emblazoned with the Northfield High emblem and a cheerleader's name. The total cost of the uniforms is $900. Two weeks after placing the order, Dakotah realizes she ordered the wrong style of uniform, so she contacts Cheerleader Supply and attempts to cancel the order. Cheerleader Supply at this time is almost through completing the work on the order. Cheerleader Supply: a. cannot enforce the contract, because sales of goods over $500 must be in writing to be enforceable. b. can enforce the contract because the sale of goods does not have to be in writing to be enforceable. c. can enforce the contract, even though it is not in writing, because it is for specially manufactured goods. d. cannot enforce the contract because this is not a sale of goods, and, therefore, the U.C.C. does not apply.
c
Deborah has decided to sell her home. To improve the value of the home, Deborah contracts with Haywood Siding and Windows to have siding installed on Deborah's home for $21,000. Haywood completes the work and Deborah is pleased with the siding; it has greatly improved the value of her home. Haywood issues an invoice to Deborah for the work, but Deborah refuses to pay. Haywood does not want to sue Deborah because he does not want to be tied up in the courts for a long time; besides, suing customers is just bad for business. How can Haywood ensure that it will eventually be paid for the work? a. Haywood can file a writ of attachment with the court. b. Haywood can file an artisan's lien with the appropriate government agency. c. Haywood can file a mechanic's lien with the appropriate government agency. d. Filing suit against Deborah is the only way Haywood can ensure that it will be paid.
c
Lydia promises to sell ten designer evening gowns to Beth, owner of Beth's Prom Shop, for $5,000. Each gown is a one-of-a-kind original that Beth specifically picked out from Lydia's inventory. Lydia decides she can get more money for the gowns if she takes them to New York to sell, so Lydia notifies Beth's Prom Shop that she is canceling the deal. If Beth sues Lydia for breach of contract, the court will likely: a. award Beth $5,000 in compensatory damages. b. award Beth the difference between $5,000 and the amount she will spend purchasing the evening gowns elsewhere. c. require Lydia to honor the contract and sell the evening gowns to Beth. d. not grant Beth any kind of relief, because she can purchase evening gowns elsewhere.
c
Saundra is the CEO of Boat Kingdom, a jet ski manufacturing plant. She is very proud of the quality jet skis her company produces. She wants to include a written warranty that promises to repair any jet ski that incurs damage within the first year after it is purchased, as long as the jet ski is returned to the manufacturer by the consumer. Terryl, the CFO of the company, discourages Saundra from providing any written warranty at all. To comply with the Magnuson-Moss Warranty Act, Saundra: a. must provide a written warranty, and it must be written in simple, understandable language. b. must provide a written warranty, but it only needs to give the consumer the name and address of the person to contact to obtain warranty service. c. need not provide a written warranty. d. must provide a written warranty that explains the parts that are covered in the warranty.
c
You lost your high-paying corporate job six months ago when the company went out of business. After being out of work for four months, you finally find a job, but make much less money than you did before. At the same time, your debts have been rising dramatically due to some medical issues that resulted in large doctor and hospital bills. You start to consider filing for bankruptcy but are concerned that if you file for bankruptcy, you will lose your car. How would you get to work then? Do you think there is anything you can do to ensure that you don't lose your car if you file for bankruptcy? a. No, because the car loan is a secured debt. b. No, once you file bankruptcy, you will automatically lose your car. c. Yes, you can reaffirm the debt. d. Yes, if there is enough money left over after the secured creditors are paid, you can use that to pay off the car.
c
After an extended hospital stay, Jayla is drowning in debt. Jayla decides to file for bankruptcy, because she sees no other way out. Jayla owes $50,000 to Mercy Hospital, $3,000 to Car Mart for her automobile, and $8,000 to VISA. She is behind on payments to every single one of them! When Jayla's bankruptcy is concluded: a. Car Mart and Mercy Hospital will be paid first because they are secured creditors. b. Car Mart and VISA will be paid first because they are secured creditors. c. Mercy Hospital and VISA will be paid first because they are secured creditors. d. Car Mart will be paid first because it is a secured creditor.
d
American Home Store, headquartered in San Diego, is getting ready for its Fourth of July sale. American orders $1,000 worth of American flags from Canadian Manufacturing, Inc., which is headquartered in Montreal, Canada. American places the order by telephone, and Canadian orally accepts. Two days later, American discovers that it can get the flags cheaper from a manufacturer in Denver. When American attempts to cancel the contract with Canadian, American finds that under the 1980 United Nations Convention on Contracts for the International Sale of Goods (CISG): a. the CISG does not apply to this contract. b. the contract is not enforceable because Canada is not a signatory to the CISG. c. the contract is not enforceable because it is not in writing. d. the contract is enforceable even though it is not in writing.
d
Barron files a bankruptcy proceeding under Chapter 7 of the Bankruptcy Code. All of the property Barron owns at the time of the filing goes into the bankruptcy estate. Four months later, Barron's grandfather dies and Barron inherits $100,000. The money that Barron inherits from his grandfather: a. is after-acquired property that would not become part of the bankruptcy estate. b. would be used specifically to pay unsecured creditors. c. is community property and, therefore, part of the bankruptcy estate. d. is after-acquired property that would become part of the bankruptcy estate.
d
Erika was planning her first cross country bike trip. She wanted a bike that would handle rough terrain easily because part of the trip would be through Kings Canyon National Park. Salisar is a salesman at Bikes by the Bay, a specialty bike store near Erika. Erika explains the details of the strenuous trip she is planning and states that she needs a very sturdy mountain bike that will handle it. Salisar recommends the Crosstrain 2000, a bike his store is pushing that month because both the store and the salesperson get a bonus for each bike sold. Erika purchases the bike and begins her adventure. Twenty miles into her journey, the front axle breaks due to the rough terrain, causing Erika to plunge down a steep hillside and sustain serious injuries. In advising Erika to purchase the Crosstrain 2000 for her trip, Salisar: a. breached the express warranty of merchantability. b. breached the express warranty of fitness for a particular purpose. c. breached the implied warranty of merchantability. d. breached the implied warranty of fitness for a particular purpose.
d
Julia purchases a customized recreational vehicle from RV Sales Inc. for $55,500. Julia is in the process of preparing the campsite where she will park the RV, so she asks RV Sales to hold the recreational vehicle for her for three weeks. A week later, an 18-wheeler delivering parts to RV Sales backs into Julia's recreational vehicle, completely destroying it. The risk of loss for the recreational vehicle is born by: a. Julia. b. Both Julia and RV Sales Inc. c. Neither Julia nor RV Sales Inc. d. RV Sales, Inc.
d
Larue owns a horse ranch. Larue enters into a contract with Dora for the purchase of thirty saddles for his ranch to be delivered on a specific date. If the price of the saddles is not included in the contract, under the U.C.C.: a. Dora, the party furnishing the saddles, will supply the price at the time of delivery and must determine that price in good faith. b. Larue, the party purchasing the saddles, will supply the price at the time of delivery and must determine that price in good faith. c. there is no valid contract because the contract is incomplete. d. the court will determine a reasonable price at the time for delivery.
d
Ralph and Lulu are tired of struggling with their finances, so they decide to file for bankruptcy. Ralph and Lulu know once they file for bankruptcy, they will have trouble getting credit extended to them. Plus, they are tired of just scraping by and doing without. So, in the three weeks before the bankruptcy petition is filed, Ralph and Lulu go on a real spending spree. Ralph and Lulu max out their Mastercard by buying items for their house, going on trips, and eating at expensive restaurants. Because, after all, they won't have to pay it back! If Mastercard objects to the discharge of the recent credit card debt in the bankruptcy: a. the debt will probably be discharged in the bankruptcy, and Ralph and Lulu will not have to pay. b. the court will not allow Mastercard's objection, because creditors cannot object to purchases made by the debtor on a validly-issued credit card. c. the debt will probably be discharged in the bankruptcy under the after-acquired property rule. d. the debt will probably not be discharged in the bankruptcy, and Ralph and Lulu will have to pay.
d
You purchase a new laptop online and pay for express delivery to your home. The seller fulfills your order, along with hundreds of others, and loads a palette of boxes onto a cargo truck to go out for delivery. Before your laptop is delivered to you, the cargo truck is involved in a collision and many of the laptops, including yours, are destroyed. Is the seller liable for the cost of replacing your laptop? a. No, you became responsible for any risk at the time you paid for the laptop. b. No, the seller is free from liability as soon as the laptop entered into transit. c. Yes, but only if you are also a merchant who intends to resell the laptop. d. Yes, under the terms of the Uniform Commercial Code, the seller will be liable for the cost.
d
