Business 251: Chapter 13 Reading Questions & Assessment
If no time period for a firm offer to remain open is stated, it will stay open for a maximum of ____________.
3 months
Japheth offers to purchase a wedding cake from Edible Dreams Bakery for $400.00. He states they have two days to accept the offer. This is an example of which type of offer?
A firm offer
When the buyer agrees to purchase all or up to an agreed amount of what the buyer needs for a given period, what kind of contract is formed?
A requirements contract
_______ lowers the bar for the formation of _______ by allowing an enforceable agreement to arise "in any manner sufficient to show agreement" between the parties.
Article 2; sales contracts
Larry's Lumberyard delivers 500 studs to Carl Contractor's worksite. Carl signs an invoice and says "put it on my bill." The delivery man says "No sir, I have to have a check." Who is right?
Larry's Lumberyard. The UCC says payment is due at the time and place of delivery.
Suppose Pottery Barn sells an antique chair to Margaret, an ordinary consumer. On the sales contract Margaret writes in "conditioned 90 day sale on approval by my husband James" but Pottery Barn does not initial the terms. Under the UCC, do the terms become a part of the sales contract?
No, the contract is formed as originally offered.
Suppose Franks Furniture Outlet advertises 100 units of furniture for a price of $50 per unit, and the offer to remain good for 60 days." What is that status of the offer on the 85th day?
Technically there is no firm offer, but possibly an option contract.
ABC Technologies sells to Devon a television with a fair market value of $1,000.00. According to the UCC, must this contract be in writing to be enforceable?
Yes as contracts with goods with a total value of $500.00 or more must be in writing to be enforceable.
Suppose that Manny Manufacturer faxes an offer to Reggie Retailer for the following: 1,000 widgets for $1.75 each. Suppose further that Reggie sends a text to Manny that says, "Yes, I think so." Is there a contract under the UCC?
Yes, if the court decides that Reggie's response was a reasonable manner of acceptance.
In a battle of the forms case, the UCC provides that (1) _______ and (2) _______.
a document may constitute acceptance even though it has additional terms than proposed by the offeror; additional proposed terms may become part of the contract
One of the reasons an additional term in a contract between merchants would not automatically be included in a contract is that the term proposes ________ that diverges _______ from those in the offer.
a material term; significantly
Cat's Coaster Company uses cork in all of the protective drink coasters that it manufactures. If Cat;s enters into an agreement with a cork exporter from Portugal to purchase all of the cork it needs to produce its products, this would be ___________.
a requirements contract
If additional terms are added to an acceptance where one of the parties to a sales contract is not a merchant, the contract is ________.
accepted as originally offered
If the place of delivery is not specified in the contract, the buyer takes delivery _______.
at the seller's place of business
Article 2 requires that payment is due _______ of where the seller is to make delivery, and may be made in _______ form.
at the time and place; any commercially reasonable
When merchants have conflicting terms and forms, the UCC provides guidelines to resolve disputes on the "_______."
battle of the forms
The UCC requires contracts for over $500 to be in writing for _________ and __________ reasons.
cautionary;evidentiary
Recall that _______ contracts must be supported by _______ and most contracts involving non-sale-of-goods contracts cannot be modified without some additional consideration.
common law; bargained-for consideration
Article 2 of the UCC provide that that the acceptance of an offer in a sales contract is not as rigid as the _______ rules, allowing for an acceptance to be made in any "_______."
common law; reasonable manner
The UCC does require _______ to support a sales contract, but unlike the common law, does not require additional consideration for contracts to be ________.
consideration; modified
When a contract for the sale of goods is missing provisions such as delivery, quantity and payment terms, under the UCC the ___________________.
contract will be acceptable so long as the contract shows that the parties intended to enter into a contract.
When merchants engage in sales transactions but overlook or are unsure about some key element of the contract, the UCC can fill in the gaps, with _______, ______, or the _______ of goods.
delivery; quanitity; price
Because the UCC aims to promote the completion of business transactions, the formation elements for a sale contract are ___________, and ___________ required for common law contracts.
easier to meet; do not require the same level of intent
True or false: Article 2 of the UCC adopts the common law's "mirror image" rule.
false
True or false: Both the common law and the UCC have the same inflexible requirements for written contracts.
false
true of false: a firm offer automatically occurs when an offer or promise is made by one merchant to another.
false
A(n) __________ offer is created under Article 2 of the UCC when a(n) ___________ offers to buy or sell goods with an explicit promise, in writing, that the offer will be held open for a certain time period.
firm; merchant
Rachel received a shipment of facial cleaner from Posh Skincare, Inc. In the shipment there was a preprinted document with blanks filled in that stated the items delivered, the price per item and the total price from the seller. This document is a(n):
invoice
When selling used cars, Carl's Car Lot uses an acknowledgment form, also called a(n) _______ which has preprinted provisions and blanks to accommodate the specifics of the sale.
invoice
To create an agreement, a seller typically uses a(n) ______, also called a(n) ______ form, with preprinted provisions and blanks so the seller can tailor it to the specific transaction.
invoice; acknowledgement
Carol's Cattleyard proposes a certain term in the purchase order to Harry's Haybarn. Harry's acceptance states a term that is different from the offer, most states would use the ______ rule, and use the UCC's _______ provisions to supply the term(s).
knockout; gap-filler
As long as a contract satisfies the writing requirement of the UCC, any other terms not included in the writing:
may be proven by testimony and evidence concerning oral agreements.
If the seller is a(n) _______ and promises in a signed writing to keep an offer for the sale of goods open for a period of time, under UCC Article 2 this action creates a firm offer _______.
merchant; that is irrevocable
The UCC modifies the common law's "_______" rule that the terms of the offer and acceptance must match exactly, by allowing a contract to be created _______.
mirror image; in any reasonable manner
Generally, the UCC provides that a merchant can create an irrevocable firm offer even if there is ________ by the offeree. However, if the offeree gives consideration for the offer this would create a(n) _____.
no consideration; option contract
When a contract is missing key provisions of the contract it is called a(n):
open contract
The UCC's approach toward _______ terms is its _______ role because the UCC provides a variety of answers based on what terms are missing.
open; gap-filling
Paris offers to buy "all the mulch" Market Basket has and they agree. This contract is called a(n):
output contract
Generally ______ is a required term in enforceable contracts for the sale of goods the UCC provides an exception in a(n) _____ contract when the buyer agrees to buy all of the goods a seller produces.
output; quantity
The two exceptions to a missing quantity term being required in a commercial sales contract are __________ contracts, or ___________ contracts.
output; requirements
Under the UCC, a contract for the sales of goods _______ must be ______ to be enforceable.
over $500; in writing
Businesses frequently use _______ to initiate or respond to an offer to sell a good which usually have some blanks for the particular negotiated terms unique to the transaction.
preprinted forms
Normally, the offer takes the form of a(n) _______ from the buyer that contains preprinted clauses favoring the buyer and blanks for a shipment date, product information, and _______.
purchase order; quantity
The UCC requires the court to determine a _______ price at the _______, based on industry customs and market value.
reasonable; time of delivery
If Bob Buyer agrees to purchase all of Pablo Producer's grain for 6 months, the parties most likely have what is called a(n) ________ contract, a court will generally enforce it even though it falls to state a particular ______ of goods.
requirements; quantity
The statute of frauds provisions in the UCC require that the writing contain (1) ________, (2) ________ and (3) _______.
signature of the party against whom enforcement is sought; language showing the intention to form a contract; quantity of goods
The _______ is a legal requirement that certain contracts ______ in order to be enforceable.
statute of frauds; be in writing
With regard to consideration in a sales contract, the UCC differs from the common law that:
terms of a sales contract may be modified without additional consideration.
If the time of delivery is not specified in a contract, the UCC provides _______.
that delivery take place at a reasonable time under the circumstances.
Under Article 2 of the UCC, if both parties to a contract are merchants, additional terms automatically become part of the enforceable contract unless one of the following conditions exists:_______, _______________, or ____________.
the offeror is limited to original terms; the offeror objects to the additional terms within a reasonable time; the additional term is a material change
Which is true of open-price-term contracts?
the price becomes the reasonable price at the time goods are delivered
According to the UCC if a time period of acceptance is not stated in the offer to sell goods, the time period for acceptance will be _________.
three months
