Blaw test 3-4

Able Co. entered into a contract with Baker Co. for the sale of goods. Both parties are merchants under the UCC. Each party used its own form as an offer and acceptance. On the back of each form there were minor terms that conflicted with each other. What is the result of these minor differences in terms on the forms used by the parties?

A contract does result, and it includes the terms agreed upon plus gap-fillers from the UCC.

In which of the following transactions is the buyer most likely to be entitled to specific performance of the contract?

A contract for purchasing a Picasso painting

Which of the following contracts is void?

A contract made by a person who has been adjudicated insane and institutionalized or put under a guardian's care.

For which of the following sale contracts does title and risk of loss remain with the seller until the buyer accepts the goods?

A sale on approval

Feeble, a business law professor who has never sold a car before; sells his 1995 Honda Civic to Wanda. This sale is governed by:

Article 2 of the UCC.

Bobby goes to buy a CD player from Sammy's Electronics. In testing one model, Bobby notices that the "scan" function does not allow scanning once a selection from a CD is playing. Bobby purchases the model despite this without mentioning the defect to Sammy. Bobby takes the CD player to his office where he uses it for three months before deciding that he wants to return it. Under these facts

Bobby has accepted the CD player.

Which of the following terms in a contract for the sale of goods requires the seller to insure the goods?

CIF

Which form of damages is intended to give the victim of the breach of contract the "benefit of the bargain"?

Compensatory

Which statement about the Statute of Frauds is most true?

Contracts for the sale of goods for $500 or more must be in writing in order to be enforced.

Which of the following is used by sellers to eliminate any kind of liability that may be claimed by an injured buyer?

Disclaimer

An owner of Café Coffee declares that his restaurant has the world's best cup of coffee. This is an express warranty.

False

Article 2 of the UCC never applies to mixed goods-services contracts; instead it treats them as pure service contracts.

False

Courts look at parties outward manifestations of intent as a requirement to enforce a contract. This is called subjective standard of intent.

False

Even if a buyer breaches a contract, the seller is accountable to the buyer for any profit that the seller makes on a resale.

False

Generally, the UCC uses the test of impossibility to determine if a person can be excused from performing his contractual obligations.

False

If there is no time specified in contract by the parties, then it is presumed that performance shall be completed whenever possible.

False

Lisa took her computer to ABC Computer Sales and Repair, Inc. ABC mistakenly sold her computer to another customer, Rafi. Lisa may successfully sue Rafi for return of the computer.

False

Once a party properly delegates a duty to the delegatee, that party is relieved of any obligation to perform the duty.

False

Speaking generally, a quasi-contract applies where there has been foreseeable reliance on an express promise.

False

The Uniform Commercial Code gives the contracting parties very little flexibility in deciding between themselves how they will perform a contract.

False

Under Article 2 of the UCC, consideration is necessary for the modification of a contract.

False

X contracts with Y to produce an advertisement for a Fourth-of-July fundraising party. Y does not produce the advertisement until July 6. Here, Y's breach of the contract is not a material breach unless the contract explicitly stated that time is of the essence.

False

Sue and Joe have concluded their agreement in all substantial matters including a price of $750, quantity of goods, mode of delivery, etc. However, the formal written agreement is not signed. Is there a contract?

No, because the agreement is not yet reduced to writing.

S agrees to sell B 10,000 widgets at a price of $1.00 per widget. After B breaches the contract, S resells the widgets for $1.10 per widget in a public sale. S also saved $200 in shipping costs. What amount does S owe B?

Nothing

When can the offeror effectively revoke his/her offer?

Only before an effective acceptance

Which of the following will generally not be the basis of an express warranty?

Puffery

The purpose of the Statute of Frauds is to

provide evidence to corroborate the existence of the oral contract.

Goods are being sold by Sam in Seattle and shipped by ABC Railroad to Bob in Portland, Oregon. In this situation, the term "FOB Seattle" means that the risk of loss passes from the seller to the buyer when:

the goods are delivered to ABC Railroad in Seattle.

If a buyer and seller of goods fail to specify in their contract when title is to pass, Article 2 of the UCC provides that title will pass when:

the seller completes its obligation with respect to physical delivery of the goods.

Goods that are not "merchantable" are

unfit for the ordinary use for which such goods are used.

A buyer or a seller who has reason to be concerned about the other party's performance can demand assurance from the other party that the contract will be performed. However if such assurance is not forthcoming within 30 days, the other party is considered to have repudiated the contract.

True

A contract made by a person who has been adjudicated to be insane and institutionalized or put under a guardian's care is void rather than voidable.

True

A contract may be voidable even if the person making the misrepresentation believes in good faith that what he/she says is true.

True

A offers to mow B's lawn for $100. B says in reply, "This is outrageous! You're taking advantage of me! But I accept." B has indeed accepted A's offer.

True

According to the rules of interpretation of contracts, generally ordinary words are given their usual meaning and technical words are given their technical meaning.

True

Alan and Ben have a contract. Alan has performed 100 percent and Ben has performed 50 percent of it. This contract is now executory.

True

Anne induces Ben's consent to contract under duress. Anne later assigns her rights under the contract to Carl. Ben may assert the doctrine of duress against Carl as a ground for avoiding the contract.

True

Edna Boyle contracts with The Melonville Times to advertise her garage sale to be held this Saturday. The ad is to run in the Friday and Saturday morning edition. If the ad does not run on time, The Melonville Times agrees to pay Edna $50.00. This liquidated damages clause is most likely enforceable.

True

If the seller is in the process of manufacturing the goods when the buyer breaches the contract, one of the seller's options is to complete manufacture of the goods and then resell them so long as this minimizes the loss to the seller

True

If there is a conflict between the express terms of the contract and the past course of dealing between the parties, the express terms of the contract prevail.

True

In order to be liable under the implied warranty of merchantability, a seller must be a merchant.

True

The UCC imposes a duty of good faith in the performance and enforcement of every contract it covers

True

The buyer may reject an installment delivery only if the nonconformity substantially affects the value of that delivery and cannot be corrected by the seller in a timely fashion.

True

Which of the following is an example of substantive unconscionability?

Unjustifiably harsh terms

Pip owns Great Expectations, a trendy restaurant in Manhattan. He enters into a contract with Estella, who makes and sells pastries. The contract states that Estella will "supply all of Great Expectation's needs" for pastries for the next year. Is this contract enforceable?

Yes, because this is a requirements contract.

Twentieth Century product liability law is best characterized by the phrase:

caveat venditor (seller beware).

An executed contract is one that

has been fully performed by both parties.

Johnny LaRue sells men's jackets to men's clothing stores, including Melonville Man. Melonville Man orders a selection of men's jackets from LaRue's catalog, asking that LaRue select an assortment of goods for the buyer. LaRue takes advantage of this opportunity to get rid of the odd-sized jackets and those in pastel colors that are no longer popular. LaRue

has violated the good faith requirement under sales contracts.

One of the differences between fraud and misrepresentation is

in fraud cases, the injured party has the option of suing for monetary damages.

Payne entered into a written agreement to sell a parcel of land to Stevens. At the time the agreement was executed, Payne had consumed alcoholic beverages. Payne's ability to understand the nature and terms of the contract was not impaired. Stevens did not believe that Payne was intoxicated. The contract is

legally binding on both parties.

Damages that the parties set to be paid in case of a breach are called

liquidated damages

Guy and Boyd make an oral contract whereby Guy agrees to sell Boyd, 480 widgets (goods) at a price of $480. Later, the parties want to modify the contract so that the price would become $520. This modification:

must be in writing.