BUS263 test #5

A buyer or lessee has an insurable interest in identified goods. true false

true

A novation requires the contracting parties to make restitution of whatever they received under the contract. true false

true

A seller who tenders nonconforming goods with a price allowance has reasonable grounds to believe that the buyer will accept the tender.

true

Anticipatory repudiation of a contract is treated as a present, material breach in order to give the non-breaching party an opportunity to seek a similar deal elsewhere. true false

true

Generally, if an acceptance to a sales contract between merchants includes terms additional to those in the offer, the terms automatically become part of the deal. True False

true

Identification is the express designation of the goods provided for in a contract, and the parties to the deal can agree in their contract when this will take place. True False

true

If a buyer wrongfully refuses to accept tendered goods, the seller can bring an action for damages equal to the difference between the contract and market prices at the time and place of tender. True False

true

Misrepresentation of law does not ordinarily entitle a party to avoid a contract. true false

true

Once performance has been tendered, the party making the tender has done everything possible to carry out the terms of the contract. true false

true

Risk of loss cannot pass from seller to buyer unless the goods are identified to the contract. True False

true

Sometimes, when a buyer breaches a contract for a sale of goods and the seller has not yet produced the goods, the seller can recover the lost profits. true false

true

Under the UCC, if a dispute occurs over the existence of a contract, a purchase order can be sufficient to indicate that there is a contract. True False

true

At an auction, Ben bids on a 1957 Chevy coupe, believing that it is worth more than the price asked. When the car proves to need more repairs than Ben estimated, and thus is worth less as is, Ben is a. still liable on the bid. b. not liable on the bid because the auctioneer misrepresented the value. c. not liable on the bid because he underestimated the cost of repairs. d. not liable on the bid because the need for repair is not a material fact.

a. still liable on the bid.

Reese contracts to sell a Spicy Pizza restaurant to Titian. As part of the deal, Reese agrees not to open a competing business within a hundred-mile radius for ten years. Reese later sues Titian, alleging that the agreement is illegal. To enforce the covenant not to compete, the court will most likely a.reform the contract to make the distance and time limits reasonable. b.order specific performance. c.rescind the contract and require restitution. d.award damages for Reese's complete compliance with the terms.

a. reform the contract to make the distance and time limits reasonable.

Gliders LLC and Hang Time Inc. are parties to a contract. They subsequently agree that In the Wind Inc. should take Gliders' place and assume all of its rights and duties under the contract. This is a.a novation. b.a mutual agreement to rescind. c.an accord and satisfaction. d.specific performance.

a.a novation.

Outdoor Outfitters Store contracts to buy fifty tents from Pitched Camp, Inc. Unless the contract states otherwise, this document is assumed to be a.a shipment contract. b.a bill of lading. c.a destination contract. d.a warehouse receipt.

a.a shipment contract.

Jess, a salesperson for Kitchens Inc., shows Lane, a buyer for Metro Diner, display items in Kitchens' showroom, stating that any purchased equipment will match the display. This is a.an express warranty. b.an implied warranty. c.a statement of opinion. d.puffery.

a.an express warranty

Holiday Corporation sells Idyll-brand campers and trailers. Under most circumstances, Holiday will be presumed to have warranted that its title to the goods is a.good and valid. b.the same as every other merchant who deals in goods of the kind. c.only such as the seller has acquired in the goods. d.none of the choices—a warranty of title is not presumed.

a.good and valid.

Elegant Carpet Inc. agrees to sell a certain quantity of carpeting to Fabulous Floor stores under a shipment contract. Elegant must a.place the goods into the hands of a carrier. b.allow the buyer to reject the goods for any reason. c.inspect the goods before shipping it. d.deliver the goods to a particular destination.

a.place the goods into the hands of a carrier.

Elle sells a motorcycle to Fran for $5,000, a bike to Gwen for $600, a pool table to Holly for $200, and three shares of stock to Inez for $100. Article 2 of the UCC does not apply to the sale of a.the stock. b.the bike. c.the pool table. d.the motorcycle.

a.the stock.

Eugene, an accountant, convinces his client Faye to enter into a contract to invest her savings in Gather, a non-existent social media site. There is clear and convincing evidence that Faye did not act out of her free will. This is a.mistake.b.fraudulent misrepresentation.c.undue influence.d.duress.

c. undue influence

Bon, an agent for City Motors Inc., e-mails Dale on May 1 that the dealer will sell to her a 2018 Ford pick-up truck for $25,000 between May 1 and July 1. Bon's offer to Dale is a.revocable on the payment of consideration to Dale.b.irrevocable for the stated period.c.revocable at any time.d.irrevocable until Dale responds.

b.irrevocable for the stated period.

Dory enters into a contract with Eton for the construction of a Fast Food franchise, according to a certain schedule. The parties perform some preparatory steps, but Eton materially and willfully fails to begin work on the specified date. To rescind the contract, Dory must show that the parties can a.be restored to the status quo .b.obtain a reasonable exchange of values for the preparatory steps. c.profit from the partial performance.d.realize at least some of the benefit of their bargain.

be restored to the status quo.

Len contracts to work for Media Corporation during May for $4,500. On April 30, Media cancels the contract. Len declines a similar job with New Ads Inc., which would have paid $3,500. Len files a suit against Media. As compensatory damages, Len can recover a. $3,500. b. $0. c. $4,500. d. $1,000.

c. c.$1,000.

State University provides housing on campus and in some adjacent off-campus neighborhoods. To lease a university house or apartment, a person must be a student at State. This requirement is a. a novation. b. an operation of law. c. a condition. d. a breach of contract.

c.a condition.

Chair Company contracts to deliver a dozen suites of dining room tables and chairs to Furniture Store on May 1. On April 15, Chair tells Furniture that delivery will be delayed until June 1. Furniture may a.only sue Chair for breach of contract.b.only suspend its own performance.c.await performance, sue Chair, or suspend its own performance.d.only await Chair's performance for a commercially reasonable time.

c.await performance, sue Chair, or suspend its own performance

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

d. Reynaldo.

East Bay Café orders seafood from Fresh Catch Company. Fresh places the goods at East's disposal. Fresh's performance under the contract is a. material. b. conditional. c. substantial. d. complete.

d. complete.

Megan contracts to sell Nonny her horse for $4,000. This contract will be fully discharged when Megan and Nonny a. execute a bill of sale. b. agree that the deal is fair. c. sign a receipt. d. exchange the horse for the money.

d. exchange the horse for the money.

Restaurant Food Inc. intends to sell a certain quantity of beef for $1,100. In e-mail, however, the firm's sales representative mistakenly offers to sell the beef to Steak House for $1,000, Steak's manager immediately accepts. The seller a.can rescind the deal and recover damages for the mistake. b.can rescind the deal. c.is bound to the deal but can charge the intended price. d.is bound to the deal at the offered price.

d. is bound to the deal at the offered price.

Security Insurance Agency contracts with Town Motors to buy six cars. The contract lists the cars by their VINs (vehicle identification numbers). Under the UCC, identification a.requires the filing of a copy of the contract in the appropriate state office. b.cannot take place unless the cars are in the seller's possession. c.cannot take place until the cars are in the buyer's possession. d.has taken place.

d.has taken place.

Jo owns a condominium that she leases to Kia. Jo gives her daughter Liu $450 on her sixteenth birthday. Jo sells her car to her neighbor Maia for $1,500. Article 2 of the UCC covers a.all of the choices. b.the gift to Liu. c.the lease with Kia. d.the sale to Maia.

d.the sale to Maia.

A contract clause that excludes liability for willful misconduct is enforceable if the provision is sufficiently prominent in the body of the contract. true false

false

A statute of limitations limits the amount of damages that the nonbreaching party can obtain for a breach. true false

false

An auto dealer is a merchant when selling or leasing a new car but not when selling or leasing a pre-owned vehicle. true false

false

Corporate stocks and bonds meet the requirements to be among the items of property characterized as goods under the UCC. True False

false

If a contractor's bid was significantly low because he or she made a mistake in adding up the total estimated costs, any contract resulting from the bid is still normally enforceable. true false

false

If a sales contract prohibits any changes unless they are in a signed writing, then only those changes agreed to in a signed writing are enforceable. True False

false

If one party's performance on a contract is substantial, the other party's duty to perform need only comport with the level of the rendered performance. true false

false

In the context of fraudulent misrepresentation, an opinion is objective and verifiable, whereas a fact is subject to debate. true false

false

Most contracts need to be performed to the personal satisfaction of each contracting party. true false

false

On a contract—"F.O.B. New York"—for a sale of almonds by a broker in California, the risk of loss passes to the buyer when conforming goods are placed in the possession of the carrier. True False

false

Only a mistake of value or quality makes a contract voidable. true false

false

Ordinarily, every party to a contract has a duty to come forward and disclose facts. true false

false

Performance becomes commercially impracticable when a foreseeable, added burden of performing increases the cost slightly. true false

false

The measure of compensatory damages does not vary by type of contract. true false

false

Title to goods can pass to the buyer from the seller before the goods are identified to the contract. True False

false