Quiz: Sales Contracts, Products Liability, Credit and BankruptcyAssignment

Which of the following statements characterizes an implied warranty of fitness?

Any seller, merchant or nonmerchant, may make this implied warranty.

In Jewish Federation of Greater Des Moines v. Cedar Forrest Products Co., the case in the text, the court held that:

CFP, as a lost volume seller, was entitled to lost profits.

_____ refer(s) to the goods used or bought primarily for personal purposes.

Consumer goods

A surety is not primarily liable for the debtor's obligation and the debtor can demand performance from the surety only if the debtor refuses to pay.

False

Under the UCC, if a liquidated damages clause in a contract turns out to be unenforceable, the injured party can sue for special damages.

False

Auto Mart sells new and used vehicles and finances its inventory through ABC Bank. Finn purchases a new car from Auto Mart and receives good title free and clear of ABC's security interest. Which of the following is false?

Finn is liable to ABC because ABC has superior title.

Which of the following is true of price terms in a contract?

No contract is created if price terms are not agreed on.

Which of the following occurs when the plaintiff uses the product in some unusual, unforeseeable way, and this causes the loss for which he sues?

Product misuse

Which of the following remedies would be unavailable to a buyer that could buy the same kind of goods from elsewhere?

Specific performance

If a debtor defaults and the debtor's surety satisfies the obligation, the surety acquires the right of:

subrogation.

In the case in the text, In re Borden, the court concluded that when an artisan loses possession involuntarily:

the artisan does not necessarily lose the artisan's lien.

A seller's ability to disclaim implied warranties is sometimes restricted by the doctrine of:

unconscionability.

Which of the following is a means of obtaining control over the collateral?

The secured party becomes the bank's customer for the deposit account.

UCC section 2-301 outlines what basic duty of the seller?

To deliver the goods called for by the contract

Which of the following transfers would be considered fraudulent under the 2005 revisions of the Bankruptcy Code?

Transfers to or for the benefit of an insider under an employment contract and not in the ordinary course of business.

Straight bankruptcy, also known as liquidation, is covered under Chapter 7 of the Bankruptcy Code

True

The two-step process for obtaining an enforceable security interest consists of attachment and perfection.

True

A(n) ______ occurs when the buyer and/or the seller delegates their duties or rights to someone else.

assignment

A _____ is a security interest in real property or a deed to real property that is given by the owner as security for a debt owed to the creditor.

mortgage

If the shipping terms are cash on delivery (COD), then the buyer:

must pay for the goods before inspecting them unless they are marked "Inspection Allowed."