Test 3

Pavers Inc. contracts to buy some heavy equipment from Earthmovers, Inc. Before either party performs, Earthmovers sells its assets to Excavation Corporation. On learning of the sale, Pavers is concerned about its contract with Earthmovers. Pavers should a. demand assurances of performance from the seller. b. buy the equipment from a different firm and bill the seller for the price. c. buy the equipment from a different firm and bill Excavation for the price. d. consider the contract repudiated and sue the seller for breach.

A

Precious Stones, Inc., and Sparkling Jewelry stores enter into a contract for a sale of gemstones. Precious Stones does not deliver. The buyer can normally recover as damages the difference between a. the contract price and the market price. b. any loss avoided and any profit gained. c. the current prices in the parties' locations. d. the actual price and the hoped-for price.

A

Ferris is refinishing his kitchen floor and needs a floor sander to complete the job. Ferris's neighbor Gena suggests that he call Home Repair Rentals, Inc. Home Repair leases Ferris a floor sander. In this transaction, the lessor is a. Gena. b. Home Repair. c. none of the parties. d. Ferris.

B

Lighter Than Air, Inc., and Mario enter into a contract for a sale of a hang glider. Lighter Than Air, 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 was designed to prevent deception in warranties by a. displacing the UCC as the primary source of warranty rules. b. making warranties easier to understand. c. prohibiting disclaimers of warranties. d. requiring sellers to give written warranties for consumer goods.

B

Rally Corporation enters into a contract to sell ski gear to Sno-Sports Inc., which sells a pair of the skis to Tyra, a consumer, who later sells them to Upton, another consumer. Article 2 of the UCC applies to the sales transactions between a. Sno-Sports and Tyra only. b. all of the buyers and sellers. c. Rally and Sno-Sports only. d. Tyra and Upton only.

B

Talk, Inc., offers to buy from Ultra Corporation 1,000 smartphones. Without notifying Talk, Ultra timely ships phones of a different quality. With respect to the offer and a possible contract, this shipment is an acceptance and a. a counteroffer. b. a breach. c. complete performance. d. an accommodation.

B

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 a. a lease. b. a sale on approval. c. a sale or return. d. a bailment.

B

Vehicle Wholesale Company and Walt's Retail Motors enter into a contract for a sale of used cars. Vehicle Wholesale assures Walt's that it has valid title to the vehicles. Under the UCC, warranties of title arise a. only in conjunction with lease contracts, not sales contracts. b. automatically in most sales contracts. c. only if the buyer asks for such a warranty. d. only if the seller expresses such a warranty.

B

A contract between Fresh Fruit Corporation and Green Grocer, Inc., requires Fresh Fruit to deliver goods to Green Grocer's place of business. This is a. a bill of lading. b. a shipment contract. c. a destination contract. d. a warehouse receipt.

C

Kanye goes to a Lawn & Yard store to tune up his mower. Marty, the service technician, learns that Kanye's lawn is overgrown and rocky, and advises the use of a certain type of oil, plug, filter, and blade. Later, the mower breaks down due to the use of the items recommended by Marty. Kanye may recover from Lawn & Garden for breach of a. none of the choices. b. an express warranty. c. an implied warranty of fitness for a particular purpose. d. an implied warranty of merchantability.

C

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 a. an implied warranty. b. a warranty of title. c. an express warranty. d. puffery.

C

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 the buyer will then pick up. Title to the goods passes to Pipes & Culverts when a. Pipes & Culverts orders the drives. b. Pipes & Culverts picks up the drives. c. Quality gives Pipes & Culverts a warehouse receipt for the drives. d. Quality stores the drives.

C

Precise Parts, Inc., and Quality Auto stores enter into a contract for a sale of auto parts that meet certain specifications. Precise Parts ships goods that do not comply. Quality Auto a. must accept the entire shipment. b. must reject the entire shipment. c. can reject the entire shipment. d. cannot reject the entire shipment.

C

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 return, the kayaks are lost. The loss is suffered by a. Quest . b. Trans-State. c. Sports Merchandise. d. RiverRun.

C

Rice River Farms offers to sell Sensei Sushi Restaurants, Inc., five hundred bushels of rice. Sensei responds, "We agree to buy five hundred bushels only if the rice is Grade A quality." This statement is a. a breach. b. a confirmation. c. a counteroffer. d. an acceptance

C

Safe4U Lenses, Inc., assures ThruVu Optical Company that Safe4U's lenses will not crack within a certain range of pressure. ThruVu buys the lenses to prescribe to its customers. When cracks develop within the stated range, ThruVu files a suit against Safe4U. The court is most likely to rule in favor of a. Safe4U, because its statement was an expression of opinion. b. Safe4U, because ThruVu chose Safe4U's products voluntarily. c. ThruVu, because Safe4U's statement was an express warranty. d. ThruVu, because Safe4U's statement constituted puffery.

C

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 a. not enforceable. b. enforceable, because Ben's initialed notes are a sufficient writing. c. enforceable, because under the UCC a contract need not written. d. enforceable, because Raul's initialed notes are a sufficient writing.

D

A buyer who rightfully rejects nonconforming goods may obtain cover or cancel the contact, but may not seek damages.

F

In a sale on approval, a buyer takes goods primarily for resale, with a right to return any goods that fail to sell.

F

Puffery is an expert's opinion that creates an express warranty.

F

The UCC requires that the mirror image rule be followed for all acceptances.

F

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 a. only if the buyer asks for such a warranty. b. automatically in most contracts for a sale of goods. c. only in conjunction with lease contracts, not sales contracts. d. only if the seller expresses such a warranty.

B

Spuds Corporation buys from Tater Farms, Inc., a potato crop that Tater plans to plant and harvest during the next growing season. Spuds plans to sell the potatoes to Tasty Foods Restaurants. After the potatoes are planted, but before they are harvested, an insurable interest in the crop exists in a. Spuds, Tater, and Tasty Foods. b. Spuds and Tater, but not Tasty Foods. c. Tater only. d. none of the choices.

B

ABC Toy Store orders one hundred board games from Big Board Games Inc. When the games are delivered, they are all missing pieces. ABC rejects the shipment. To cure, Big Board Games must a. promptly notify ABC of the intent to cure. b. pick up the nonconforming games before the end of the business day. c. enter into a new contract with Axel's. d. pay a cure fee.

A

Asian Noodle Company contracts to sell 1,000 cases of rice noodles to Bob's Bistros, Inc., but refuses to deliver. Bob's right to obtain substitute goods for those that were due under the contract is the right to obtain a. cover. b. specific performance. c. cure. d. tender.

A

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 a. in existence and identified as the goods in the contract. b. in ERC's physical possession. c. in Dig & Fill's physical possession. d. listed in a document of title and filed in the appropriate state office

A

Mountainside Coffee Company and Nature's Cuisine, Inc., enter into a contract for a sale of coffee beans. The contract includes the term "F.O.B. Ocean City," which is the location of Nature's Cuisine. This means that the contract is a. a destination contract. b. a shipment contract. c. a bill of lading. d. a warehouse receipt.

A

Omni Metals Company and Piecework Fabrication, Inc., enter into a contract under which Omni agrees to deliver a certain quantity of sheet metal to Piecework each month. The contract does not include a price term. In a suit between the parties over the price, a court will a. determine a reasonable price at the time for delivery. b. impose the lowest market price. c. return the parties to the positions they held before the contract. d. impose the highest market price

A

Barley that fills County Grain Co-op's silo is fungible if the barley is a. fundamentally different. b. alike naturally, by agreement, or by trade usage. c. fun, good, and edible. d. rotting due to a leaky roof and a delay in shipping.

B

Curt enters into a contract with Drivers Lease Company for a three-year lease of a car. This contract is subject to a. none of the choices. b. Article 2A of the UCC. c. the common law only. d. Article 11 of the CISG.

B

The risk of loss in a shipment contract passes to the buyer when the goods are delivered to the buyer at the specified destination.

F

Under the UCC, if a contract does not designate the place of delivery for the goods, the place of delivery is a location halfway between the seller's place of business and the buyer's place of business.

F

Car n' Truck Body & Paint Company orders custom paint from Diverse Hues Inc., but Diverse does not deliver. Car n' Truck will probably be unable to enforce the agreement if the parties omitted a. shipping arrangements. b. a delivery date. c. a price term. d. a quantity term.

D

Construction Products Company and Dante enter into a contract for a sale of bricks and stones. Construction Products knows the purpose for which Dante will use the goods. Under the UCC, an implied warranty of fitness of a particular purpose arises a. if the seller is a merchant who deals in goods of the kind sold. b. if the buyer asks for it. c. in conjunction with lease contracts, not sales contracts. d. if the buyer is relying on the seller to select suitable goods.

D

Owen and Pablo enter into a contract for a sale of irrigation equipment. Pablo pays, but Owen does not deliver. Pablo can normally recover as damages the difference between a. any loss avoided and any profit gained. b. the actual price and the hoped-for price. c. the current prices in the parties' locations. d. the contract price and the market price.

D

Quaff n' Quench Café buys twenty-five crates of oranges from Reynaldo Produce, Inc. The parties agree to ship the oranges "F.O.B. Quaff n' Quench " via Swiftline Trucking Company. The oranges rot in transit. The loss is suffered by a. F.O.B. b. Quaff n' Quench. c. Sham. d. Reynaldo.

D

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.

T

Both the buyer and the seller can have an insurable interest in identical goods at the same time.

T

Every sale or lease by a merchant who deals in goods of the kind sold or leased automatically gives rise to an implied warranty of merchantability.

T

If, before the time for performance, a buyer communicates an intent not to perform, the seller can consider the buyer in breach and pursue a remedy.

T

Statements of fact made during the bargaining process are express warranties.

T

The UCC views the entire "commercial transaction for the sale of and payment for goods" as a single legal occurrence.

T

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.

T

The seller's or lessor's major obligation under a sales contract is to tender conforming goods to the buyer or lessee.

T

To specifically disclaim an implied warranty of merchantability, a seller or lessor must mention the word merchantability.

T

Under the UCC, an offeree can accept an offer to buy goods by a prompt shipment of conforming goods.

T

Until the time for performance under a contract expires, the seller has a right to cure.

T

With nonconforming goods, the risk of loss does not pass to the buyer until the defects are cured or the buyer accepts the goods in spite of the defects.

T

A warranty of title cannot be disclaimed

F

Clear View Company, which is based in Delaware, agrees to sell fifty windows, currently stored in Florida, to Far Sight, Inc., which is based in Hawaii. Absent an agreement to the contrary, the place of delivery is in a. Florida. b. Delaware. c. California. d. Hawaii.

A

Eden Valley Ranch and Farm Supply Corporation enter into a contract for a sale of fencing materials. Farm Supply, a merchant who deals in goods of the kind, makes implied and express warranties in connection with the sale. Under the UCC, if these are inconsistent a. the implied warranty of fitness for a particular purpose takes precedence. b. all express warranties displace all implied warranties. c. the implied warranty of merchantability takes precedence. d. all implied warranties displace all express warranties.

A

In a dispute over a sale involving a bicycle, Dain argues that as to this deal Ed's Hobby Shop, where Dain bought the bike, is a merchant. A court may determine whether Ed's is a merchant by assessing whether a. it holds itself out by occupation as having knowledge or skill unique to the bike in the transaction. b. its owner enjoys biking. c. it has sold any bikes within the last year. d. it subscribes to Bike, a biweekly trade magazine

A

Game Source Stores are open to consumers. The UCC requirement of good faith imposes a. the same duty on Game Source and consumers. b. a higher duty on Game Source than on consumers. c. no duty on either Game Source or consumers. d. a higher duty on consumers than Game Source.

B

A merchant's firm offer is revocable at any time before acceptance.

F