Law in Accounting Chapter 20
Intangible property has conceptual existence and thus comes under Article 2.
False
The UCC applies to the formation of sales and lease contracts and observesthe same degree of formality used in forming other types of contracts.
False
Under a finance lease, the lessee can stop performing and making lease payments if the leased equipment turns out to be defective.
False
Under the UCC, a contract for a sale of goods that does not include the quantity will not fail for indefiniteness.
False
Under the UCC, a firm offer for a sale or lease of goods made by a merchant without consideration can be revoked at any time before acceptance.
False
When no delivery terms are specified in a contract for a sale of goods, there is no basis for determining a remedy.
False
In a limited number of instances, the UCC imposes presumes that special business standards ought to be imposed on merchants because of their relatively high degree of commercial expertise.
True
The UCC applies only to the extent that it has been adopted a state.
True
The United Nations Convention on Contracts for the International Sale of Goods (CISG) is the uniform international sales law of countries that account for more than two-thirds of all global trade.
True
Under the UCC, an agreement modifying a contract needs no consideration to be binding.
True
Under the UCC, an offeree can accept an offer to buy goods by a prompt shipment of conforming goods.
True
Under the UCC, an offeror must be notified within a reasonable time that the offeree has accepted.
True
Under the UCC, good faith means honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade.
True
Under the UCC, the meaning of any agreement must be interpreted in light of commercial practices.
True
A lessee is a party who transfers a right to the possession and use of goods under a lease.
False
All oral contracts are enforceable under the UCC.
False
American Coffee Company and Beans Brokers, Inc., enter into a contract for the sale of a certain quality and quantity of coffee beans, with Beans Brokers to determine the price. The price must be set according to a. the concept of good faith. b. the principle of fair trade. c. the predominant-factor test. d. the doctrine of unconscionability.
A
Fresh Dairy, Inc., is the offeror and Gelato Ice Cream Company is the offeree under a unilateral sales contract in which Hector's Helado Corporation is also interested. Gelato is not notified of Fresh Dairy's performance within a reasonable time. Gelato a. may treat the offer as having lapsed. b. must assume that Fresh Dairy has started to perform. c. must contact Fresh Dairy. d. must notify Hector's.
A
Over the course of a year, Suites & Sets Corporation sells household furnishings to customers to whom it extends credit. Suites & Sets orders the furnishings from The Storage Depot's warehouse, from which the items are shipped via common carrier to Suites & Sets customers. Article 2 of the UCC governs a. all of the parties' sales of the goods. b. Suites & Sets' extension of credit. c. The Storage Depot's storage of the goods. d. each company's management of its operations.
A
Refined Grains, Inc., is a Kansas-based firm that does business throughout the world. Refined Grains manages retail and wholesale operations, buys and sells commercial venues, undeveloped land, and agricultural products, and other goods. Refined Grains has had to deal with employee and customer theft. With respect to these circumstances, the Uniform Commercial Code (UCC) provides a framework for a. commercial transactions for the sale of and payment for goods. b. international distribution agreements. c. domestic and foreign transactions in real estate. d. prosecuting crimes against business interests.
A
Stop n' Gas Convenience Stores, Inc., is an East Coast-based firm that does business throughout the United States. With respect to this circumstance, the UCC has been adopted by, and applies in, a. all of the states, in whole or in part. b. only the states on the Atlantic and Pacific coasts. c. none of the states, to date. d. only the lower forty-eight states—not Alaska or Hawaii.
A
iSharp, Inc., and Jenene, the owner of a Kitchen Time shop, orally agree to a sale of knives and other utensils for $12,000. Jenene gives iSharp a check for $4,000 as a partial payment. This contract is a. enforceable to the extent of $4,000. b. fully enforceable because it is for specially selected goods. c. fully enforceable because it is oral. d. not enforceable.
A
County Dentists Clinic offers to buy from Dental & Medical Supplies Company a certain quantity of floss and other items for a certain price. Dental & Medical can accept the offer by a. a material alteration of the terms within a reasonable time. b. a promise to ship or a prompt shipment of the goods. c. a prompt shipment of the goods only. d. a shipment of nonconforming goods with a notice of accommodation.
B
Great Gear, Inc., enters into a contract to sell sports clothing and equipment to Healthways Workout store, which in turn sells a pair of bike shorts to Ilene, a consumer. In comparison to standards that apply to consumers, the UCC imposes on merchants a. less strict legal standards. b. special business standards. c. stricter ethical standards. d. the same overall standards.
B
Diet & Health Food stores orders 1,000 boxes of granola bars from Energy Products, Inc., but fails to specify the varieties. The granola bars are delivered in an assortment of varieties. Diet & Health may a. accept all of the granola bars "as is" only. b. accept all of the granola bars "as is" or reject the entire shipment only. c. accept only the granola bars that it wants and reject the rest. d. reject the entire shipment only.
C
Downtown Contractors and Equipment Rental Corporation are parties to an oral agreement for a one-year lease of a crane with payments totaling more than $10,000. They may satisfy the Statute of Frauds by a. mutually agreeing not to commit fraud. b. repeating the terms in a phone call. c. setting out the terms in a memo. d. shaking hands on the deal.
C
Ferris is refinishing his kitchen floor and needs a floor sander to complete the job. Ferris's neighbor Gerda suggests that he call Home Repair Rentals, Inc. Home Repair leases Ferris a floor sander. In this transaction, the lessor is a. Ferris. b. Gerda. c. Home Repair. d. none of the parties.
C
La-Z Days Motels, Inc., and Beds R Us Corporation enter into a contract that does not specify the payment terms. Payment may be made in a. any commercially normal or acceptable means except credit card. b. cash only. c. any commercially normal or acceptable means. d. cash or check only.
C
Perfect Poultry Company agrees to sell chicken, turkey, and other meats to Quik Markets, Inc., to sell to its customers. Normally, their contract would not be enforceable unless it includes a. the duration of the deal. b. the price of the goods. c. the quantity of the goods. d. the shipping arrangements.
C
Savannah and Tim enter into a sales contract for orchids. With respect to the specific contractual provisions set out in the UCC, Savannah and Tim may a. agree to different terms only to a reasonable extent. b. agree to different terms unless they "get caught." c. agree to whatever terms they wish. d. not agree to different terms.
C
Nature's Products, Inc., sends its standard order form to Omni Distribution Corporation to evidence a sale of packing materials. Omni responds with its own standard purchase order form. Additional terms in the purchase order automatically become part of the contract unless a. the terms materially alter the original contract. b. the original offer expressly required acceptance of its terms. c. the offeror objects to the new terms within a reasonable time. d. any of the choices.
D
A contract for a sale of real property or services is a contract for a sale of goods.
False
An unconscionable contract is one that is so unfair and one sided that it would be unreasonable to enforce it.
True
Goods associated with real estate often fall within the scope of Article 2.
True
Article 2A of the UCC covers any transaction that creates a lease of goods or a sublease of goods.
true