ACCOUNTING CHAPTER 21

When does the Uniform Commercial Code (UCC) consider an offer made by a merchant to be a firm offer? (Check all that apply.)

-If the offer is made in writing -If the offer gives assurances that it will be irrevocable for up to three months despite a lack of consideration for the irrevocability

Article ______ of the Uniform Commercial Code (UCC) applies to mixed sales if the goods are predominant part of the transaction.

2

Article ______ of the Uniform Commercial Code (UCC) applies to mixed sales if the goods are predominant part of the transaction. Multiple choice question.

2

Article 2 of the Uniform Commercial Code (UCC) governs sales contracts, while lease contracts are governed by Article: ______.

2(A)

Under Uniform Commercial Code (UCC) Section ______, additional terms will not negate acceptance unless acceptance is made expressly conditional on assent to the additional terms.

2-207(1)

Under the Uniform Commercial Code (UCC), contracts for the sale of goods must be in writing if they are valued at $______ or more.

500

Kassie is a merchant who sells electronic equipment. Adam is an electronics enthusiast who sells and buys parts for various electronic projects he is undertaking. According to Article 2 of the Uniform Commercial Code (UCC), which party has a higher standard of behavior?

Kassie

Greg discovered that his yard contained a vein of silver running through it. Greg managed to mine some of the ore and sell it to a silversmith. Is the contract for the ore governed by the UCC or the common law?

The contract is governed by the UCC Article 2, since the ore was taken from the ground and sold as a good.

Which of the following is correct regarding the requirement for modifying sales and lease contracts under the Uniform Commercial Code (UCC)?

The modification must be made in good faith.

Which of the following is a legal concept that aims to protect sales or lease contracts that the parties intended to be the final expression of their agreement?

The parol evidence rule

Ernie is a merchant seller of baseball cards. He offers to sell Eric, another dealer of baseball cards, his prized card of Babe Ruth. Ernie put the offer in writing and included the statement that the offer would be good for up to three months. Ernie's offer is: ______.

a firm offer

One type of lease agreement, a finance lease, is complicated by the addition of ______.

a third person who plays a separate role from that of the lessor

If a firm offer is silent about time, then the UCC assumes: _______.

a three month irrevocability period

Any contract or provision in a contract that is so unfair that a court would be unreasonable if it enforced the contract is: _______.

an unconscionable contract

Under the Uniform Commercial Code (UCC), contracts for the sale or lease of goods may also be formed even though some terms of the contract: _______.

are left open

Sybil had signed a lease agreement for a car, but the dealer required Sybil to pay the cost of the car if she was ever cited for speeding while driving the vehicle. The court felt that this was grossly one-sided and an unconscionable lease agreement. One of the remedies the court may grant is: ______.

attorney's fees

Article 2 of the Uniform Commercial Code (UCC) covers: ______.

contracts for the sale of goods

Under the Uniform Commercial Code (UCC), an acceptance is effective upon: ______.

dispatch

nder the Uniform Commercial Code (UCC), an acceptance is effective upon: ______.

dispatch

Under the Uniform Commercial Code (UCC), the mirror-image rule: ______.

does not apply

In an international sale of goods, if a problem arises with the contract, the Uniform Commercial Code (UCC): ______.

does not provide guidance in the litigation

If a court finds that a contract provision or the contract as a whole was unconscionable when made, the court can: ______.

either enforce the other provisions that are fair or refuse to enforce the contract

Justin went to court and contended that his automobile sales contract was unconscionable due to the high penalties for nonpayment. The court agreed with Justin that the penalties for nonpayment were unconscionable, but it found that all of the other material terms of the sale were proper. The court may choose to: ______.

enforce the provisions of the contract that the court deems as being fair

Under Uniform Commercial Code (UCC) Section 2-207(1), additional terms will not negate acceptance unless acceptance is made: ______.

expressly conditional on assent to the additional terms

Under Uniform Commercial Code (UCC) Section 2-207(1), additional terms will not negate acceptance unless acceptance is made: ______. Multiple choice question.

expressly conditional on assent to the additional terms

In a(n) ______ lease, the lessor does not select, manufacture, or supply the goods.

finance

When a lessor does not select, manufacture, or supply the goods, but acquires title to the goods or the right to their possession, this is known as a: ______.

finance lease

Carla has agreed to sell Lola her old dresser. Although they have agreed to a price, they have not agreed to a delivery date or when payment must be made. Under the Uniform Commercial Code (UCC), the contract is: ______.

formed even if some of the terms are open

According to the Uniform Commercial Code (UCC), real estate cannot be moved, so it is therefore not considered to be a(n): ______.

good

For a contract to fall under Uniform Commercial Code (UCC) Article 2, the sale must be for: ______.

goods

A merchant in Denmark entered into a contract for the sale of goods with a merchant in Italy. Assuming that both countries are parties to the United Nations Convention on Contracts for the International Sale of Goods (CISG), any dispute over that contract would be: ______.

governed by the terms in the CSIG

According to the Uniform Commercial Code (UCC), merchants are held to a(n) ______ standard of care and behavior compared to non-merchants.

higher

Under common law, the statute of frauds requires that all material terms to a contract be: ______.

in writing

Under common law, the statute of frauds requires that all material terms to a contract be: ______. Multiple choice question.

in writing

The CISG has authority over: ______.

international sales

Regarding the statute of frauds, the CISG: ______.

is more lenient than the UCC

To determine whether the Uniform Commercial Code (UCC) applies to a contract in question, it is important to first determine if the sale is for goods, and then determine if the contract: ______.

is predominantly for the sale of goods

Under the Uniform Commercial Code (UCC), if certain contract terms are left open: ______.

it is acceptable to fill them in

A court was reviewing a sales contract that contained the following phrase: "If delivery of specified goods is delayed by one day, the seller will pay one million dollars in compensation to the buyer". The purchase price of the goods is $3,000. The court refused to enforce the compensation provision because: ______.

it is unconscionable

Jan entered into a contract with Rentals-R-Us, a store which rents out furniture to customers for a rental fee. Jan signed the contract which allowed her to rent living room furniture for the fee of $200 per month. Such a contract is known as a(n): _______.

lease contract

The UCC Section 2A-103(j) defines a ______ as "a transfer of the right to possession and use of goods for a term in return for consideration".

lease contract

A person who transfers the right to possession and use of goods under a lease is known as a: ______.

lessor

Under the Uniform Commercial Code (UCC), contracts for the sale or lease of goods may be: ______.

made in any manner sufficient to show agreement

Section 2-104(1) of the Uniform Commercial Code (UCC) defines a(n) )________ as "a person who deals in goods of the kind, or otherwise by his occupation, holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction, or to whom such knowledge or skill may be attributed by his employment of an agent or broker or other intermediary who, by his occupation, holds himself out as having such knowledge or skill."

merchant

Article 2 of the Uniform Commercial Code (UCC) assumes that ______ have the ability to look out for themselves.

merchants

The _____ rule states that an offeree's acceptance must be on the exact terms of the offer.

mirror-image

A contract that mixes services with goods is called a(n): ______.

mixed sale

The reason the Uniform Commercial Code (UCC) is significant is because it clarifies sales law and makes this area of the law: ______.

more predictable for businesses engaged in transactions in more than one state

The Uniform Commercial Code (UCC) states that when a written agreement exists that is intended to be a final expression of the parties intentions in the contract, ______.

neither party can provide additional evidence that alters or contradicts the written contract

Under UCC Section 2-205, offers made by merchants are considered firm offers if the offer is (1) made in writing and (2) gives assurances that the: ______.

offer will be irrevocable for up to three months, despite a lack of consideration for the irrevocability

The ____ evidence rule attempts to protect sales or lease contracts that the parties intended to be the final expression of their agreement.

parole

The Uniform Commercial Code (UCC) includes a partial performance exception to the statute of frauds where an oral sales or lease contract is enforceable to the extent that: ______.

payment has been made and accepted or goods have been received and accepted

Scott and Stephen were in court for breach of a sales agreement. Some of the language of the contract was not clear. The parties offered additional terms to the court to clarify the meaning of the sales agreement. This is: ______. Multiple choice question.

permissible under the parole evidence rule

With regard to international sales transactions, the CISG: ______.

preempts the Uniform Commercial Code (UCC)

Under the Uniform Commercial Code (UCC), which of the following is/are not considered goods?

real estate

The Uniform Commercial Code (UCC) requires that, under the statute of frauds, leases for goods must be in writing when the lease contract: ______.The Uniform Commercial Code (UCC) requires that, under the statute of frauds, leases for goods must be in writing when the lease contract: ______.

requires payments of $1,000 or more

According to Section 2-106(1) of the Uniform Commercial Code (UCC), a(n) _____ consists of the passing of title from the seller to the buyer for a price.

sale

The Uniform Commercial Code (UCC) covers a wide range of topics, including: _____.

sales contracts and secured transactions

The formation of sales and lease contracts is governed by: ______.

state laws

Sales and lease contracts are governed by: _______.

state laws which are based on the adoption of the Uniform Commercial Code (UCC)

Section 2-106(1) of the Uniform Commercial Code (UCC) states that a sale consists of the passing of title from the seller to: ______. Multiple choice question.

the buyer for a price

The Uniform Commercial Code (UCC) recognizes an exception to the statute of frauds when parties admit that a sales or lease contract was made. This means that if there was an oral agreement for the sale or lease of goods and the defendant were to admit the parties had a contract between them, _______.

the defendant could not use the statute of frauds to prevent enforcement of the oral contract

Items taken from real estate may be treated as goods if: ______.

the owner takes the items out of the ground and then sells them to the buyer

The CISG covers: ______.

the same general topics as the UCC

The United Nations Convention on Contracts for the International Sale of Goods (CISG) was offered as a treaty that countries could sign, indicating their willingness to allow: ______.

this treaty to govern international business-to-business sales contracts

The UCC provides that if a firm offer is silent as to the length of time it is irrevocable, then the contract assumes an irrevocability period of _____.

three months

One remedy to consumers who sign lease agreements is to receive attorney fees if the court decides that the lessor has subjected the consumer to a(n): ______.

unconscionable lease

The CISG differs from the UCC statute of frauds requirements in that the CISG does not require: ______.

written contracts

Identify the article under which the Uniform Commercial Code (UCC) explains the creation and interpretation of sales contracts.

Article 2

_____ of the Uniform Commercial Code (UCC) governs lease contracts.

Article 2(A)

Sarah just bought a new refrigerator and the contract specified that along with the refrigerator, the installation of the appliance would be done upon delivery. According the mixed goods analysis, which part of the Uniform Commercial Code (UCC) would apply to Sarah's contract?

Article 2, since the predominant part of the contract is the sales of goods

Which of the following is correct regarding the rules for transactions under the Uniform Commercial Code (UCC)? Multiple choice question.

Merchants are generally held to a higher standard of care and behavior than nonmerchants.

he Uniform Commercial Code (UCC) was created by the: ______.T

National Conference of Commissioners on Uniform State Laws and the American Law Institute

"A lease contract gives the lessee the right to possess the goods permanently." Is this an accurate statement?

No, because the lease is giving the right of possession to the user for a specific term.

A court was asked to interpret a contract between two merchants regarding the sale of farming equipment. The court examined previous transactions of the parties and the way in which other merchants in the same business usually conduct business. Mr. Schnell, one of the merchants, objected to this, saying that the court could not use that information to interpret this contract. Is Mr. Schnell correct?

No, the court is entitled to use this information to interpret the contract.

Nora leased a car for the next year from Mr. Ford, the owner of the dealership. The role that each person plays in this arrangement is as follows: ______.

Nora is the lessee and Mr. Ford is the lessor.

Russell rented some construction equipment from Mr. Phillips to finish the construction of his garage. Who is the lessor and who is the lessee?

Russell is the lessee and Mr. Phillips is the lessor.

Russell rented some construction equipment from Mr. Phillips to finish the construction of his garage. Who is the lessor and who is the lessee? Multiple choice question.

Russell is the lessee and Mr. Phillips is the lessor.

Which section of the Uniform Commercial Code (UCC) defines the term "merchant?"

Section 2-104(1)

Connor wishes to buy Wayne's art collection. After an hour's discussion, they put the terms on a napkin and signed the napkin. Is this a sufficient method for forming an agreement?

Yes, because contracts for the sale or lease of goods may be made in any manner sufficient to show agreement.

Phillip has a finance lease to his television through Aztec Rental. Aztec Rental has not selected, manufactured or supplied the goods, but Aztec Rental: ______.

acquires title to or the right to possession of the television

The Uniform Commercial Code (UCC) states that when a written agreement exists that is intended to be a final expression, then neither party can provide ______ evidence that alters or contradicts the contract.

additional

The Uniform Commercial Code (UCC) has been adopted by: ______.

all fifty states, the District of Columbia, and the Virgin Islands

The Uniform Commercial Code (UCC) requires that modifications to a contract must: _______. Multiple choice question.

be made in good faith

Under the Uniform Commercial Code (UCC), an acceptance may be made: _____.

by any reasonable means of communication

Under the Uniform Commercial Code (UCC), an acceptance may be made: ______.

by any reasonable means of communication

A lease that: (1) has a value of $25,000 or less; and (2) exists between a lessor who is regularly engaged in leasing or selling goods and the offeree who is leasing the goods primarily for home use is known as a(n): ______. Multiple choice question.

consumer lease

A mixed sale refers to a contract that: ______.

combines a good with a service

Under ____ law, the statute of frauds requires all material terms be in writing.

common

under ____ law, the statute of frauds requires all material terms be in

common