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Business Law
Q:
A warehouse receipt is a receipt signed by a warehouse for goods stored in a warehouse.
Q:
Generally, all contracts are assumed to be shipment contracts if nothing to the contrary is stated in the contract.
Q:
Identification takes place when specific goods are designated as the subject mater of a sales or lease contract.
Q:
If an owner holds fungible goods as a tenant in common, he or she can pass title without actually separating the goods.
Q:
Fungible goods are goods that are alike naturally, by agreement, or by trade usage.
Q:
In contracts involving a sale of unborn animals to be born within twelve months, identification takes place when the animals are born.
Q:
If a sale involves crops that are to be harvested within twelve months, identification takes place when the seeds for the crops are purchased.
Q:
Future goods are goods that are not both existing and identified to the contract.
Q:
Even if goods are not identified to the contract, the title and risk of loss can still pass from the seller to the buyer.
Q:
Before any interest in specific goods can pass from the seller to the buyer, the goods must exist and be identified to the contract.
Q:
Identification, risk of loss, and insurable interest are all concepts that are involved in determining the rights and liabilities of parties to a contract.
Q:
In most situations involving sales, rights and liabilities are determined by who has the title to the goods.
Q:
Peter, an agent for Zippy Cars, Inc., writes a letter to Cassandra on March 1 stating that he will sell her a 2011 Suburu Outback for $20,000 between March 1 and April 30. Peter's letter to Cassandra is
a. a firm offer.
b. an acceptance.
c. a bilateral contract.
d. a breach.
Q:
Rice River Farms offers to sell Sensei Sushi Restaurants, Inc., five hundred bushels of rice. Sensei responds, "We agree to buy five hundred bushels only if the rice is Grade A quality." This statement is
a. a breach.
b. a counteroffer.
c. a confirmation.
d. an acceptance.
Q:
TalkTalk, Inc., offers to buy from Voice Media Corporation (VMC) 100,000 smartphones. Without notifying TalkTalk, VMC timely ships phones of a different quality. With respect to the offer and a possible contract, this shipment is
a. an acceptance and a breach.
b. an acceptance and an accommodation.
c. an acceptance and complete performance.
d. a rejection and a counteroffer.
Q:
FlavorBean Coffee Company agrees to buy an unspecified quantity of coffee beans from Global AgriCorp. Global breaches the contract. In FlavorBean's suit to obtain relief, the court will most likely
a. award a reasonable quantity of beans to FlavorBean.
b. award FlavorBean all the beans that it requires.
c. award Global's output of coffee beans to FlavorBean.
d. have no basis for determining a remedy.
Q:
Refined Grains, Inc., agrees to sell to Sunny Breakfast Cereal Company a certain quantity of refined oats each week but no mention is made of where the goods are to be delivered. In general, the UCC requires that the delivery take place at
a. a neutral place of business halfway between the parties' locations.
b. a "reasonable" place of delivery.
c. Refined's place of business.
d. Sunny's place of business.
Q:
Car n" Truck Body & Paint Company orders custom paint from Diverse Hues Inc., but Diverse does not deliver. Car n" Truck will probably be unable to enforce the agreement if the parties omitted
a. a price term.
b. a payment term.
c. a quantity term.
d. shipping arrangements.
Q:
Quality Metals Company and Superior Fabrication, Inc., enter into a contract under which Quality Metals agrees to deliver a certain quantity of sheet metal to Superior Fabrication each month. The contract does not include a price term. In a suit between the parties over the price, a court will
a. determine a reasonable price.
b. impose the lowest market price.
c. impose the highest market price.
d. return the parties to the positions they held before the contract.
Q:
Roy's Chick"n Shack orders chicken from Standard Food Supplier, but Standard does not deliver. Roy's will probably be unable to enforce the agreement if the parties
a. did not limit the duration of the deal.
b. did not specify a payment term.
c. did not specify a quantity term.
d. have not begun to perform.
Q:
Marine Expeditions, Inc., pays Nate's Boats $4,000 to use an oceangoing vessel for a month. For the purposes of the UCC, this is
a. a service contract.
b. a gift.
c. a lease.
d. a sale.
Q:
Jamie is redoing his kitchen and decides he needs a floor sander to complete the job. Jamie tells Rachel, his neighbor, that he needs a floor sander. Rachel tells Jamie to call Home Repair Rentals, Inc. Home Repair Rentals leases Jamie a floor sander. In this transaction the lessor is
a. Jamie.
b. Rachel.
c. Home Repair Rentals.
d. both Jamie and Rachel.
Q:
Cam enters into a contract with Tractors & Lifts Lease Company for a two-year lease of a backhoe. This contract is subject to
a. Article 2 of UCC.
b. Article 2A of the UCC.
c. Article 11 of the CISG.
d. the common law only.
Q:
Medico Inc. enters into a contract to sell medical supplies to New Hospital Corporation, which sells some of the items to Physicians Clinic, which later sells them to Oscar, a patient and consumer. Article 2 of the UCC applies to the sales transactions between
a. all buyers and sellers.
b. Medico and New Hospital only.
c. New Hospital and Physicians Clinic only.
d. Physicians Clinic and Oscar only.
Q:
Danko sells new and used sports equipment to persons who come into his store, Eyes on the Prize. One afternoon, Danko sells a used display shelf to Felipe. At a garage sale at his home, Danko sells a used flat-screen TV to Faye. Under the UCC, Danko is a merchant of
a. sports equipment only.
b. sports equipment and display shelves only.
c. sports equipment, display shelves, and flat-screen TVs.
d. anything that he chooses to sell.
Q:
In a dispute over a sale involving a restored 1937 Ford Roadster, Garth argues that for the purpose of the sale, Hoyt's Pawn Shop, where Garth bought the auto, is a merchant. A court may determine whether Hoyt's is a merchant by assessing whether
a. it has sold any restored autos within the last year.
b. it holds itself out by occupation as having knowledge or skill unique to the auto in the transaction.
c. its owner enjoys motoring.
d. it subscribes to Restoration, a biweekly trade magazine.
Q:
Dan, a computer programmer, holds a garage sale to sell a lawnmower, some clothes, some CDs and some old clothes. Will, a lawyer, sells Thelma his collection of seashells. Philip, a CEO of a successful company, sells George his pet parakeet. Judy, an expert horse trainer, sells Bob a horse. Which person would be considered a merchant under the UCC?
a. Dan
b. Will
c. Judy
d. Philip
Q:
Orange Manufacturing Corporation (OMC) orders twelve job-training and on-the-job safety DVDs from Plum Productions, Inc., which delivers the disks to OMC's plant. This is most likely
a. a gift.
b. a lease of goods.
c. a sale of goods.
d. a service contract.
Q:
Over the course of a year, Discount Market Company sells goods from its inventory and also sells one of its warehouses. In exchange, Discount receives checks, which Discount uses to repay a loan from Evermore Credit Inc. Article 2 of the UCC governs
a. the checks.
b. the payment of the loan.
c. the sale of the buildings.
d. the sale of the goods.
Q:
Canyon Creek Corporation is a Delaware-based firm that does business throughout the United States. With respect to this circumstance, the UCC has been adopted by, and applies in,
a. a few of the states.
b. all of the states, in whole or in part.
c. half of the states.
d. none of the states, to date.
Q:
Precise Engineering, P.C., is a California-based firm that does business with clients throughout North America. Precise Engineering plans and executes construction projects, and buys and sells developed and undeveloped land, and related equipment and supplies. Precise Engineering has had to confront work-site theft and vandalism. 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 construction contracts.
c. domestic and foreign transactions in real estate.
d. prosecuting crimes against business interests.
Q:
An unconscionable contract is one that is so unfair and one sided that it would be unreasonable to enforce it.
Q:
A court can refuse to enforce a contract that the court deems to have been unconscionable at the time it was made.
Q:
In interpreting a commercial agreement, a court will assume that the usage of trade was taken into account when the agreement was phrased.
Q:
A course of performance is the conduct that occurs under the terms of a particular agreement.
Q:
Under the UCC, the meaning of any agreement must be interpreted in light of commercial practices.
Q:
The terms of a fully integrated contract can be contradicted by evidence of any prior agreements.
Q:
All oral contracts are enforceable under the UCC.
Q:
Under the UCC, an agreement modifying a contract needs no consideration to be binding.
Q:
If a nonmerchant-seller's offer expressly conditions acceptance on a nonmerchant-buyer's agreement to the terms of the offer, the buyer's positive response is an acceptance even if it contains additional terms.
Q:
The UCC requires that the mirror image rule be followed for all acceptances.
Q:
Under the UCC, if a contract is unilateral, the offeror must be notified of the offeree's performance.
Q:
Under the UCC, prompt shipment of goods is considered an acceptance of an offer to buy the goods.
Q:
Generally, acceptance of an offer to lease goods may be made in any reasonable manner and by any reasonable means.
Q:
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.
Q:
If there is no definite period stated, a firm offer by a merchant is irrevocable without the necessity of consideration for up to six months.
Q:
A firm offer by a merchant may be oral.
Q:
Requirements contracts are common in the business world and normally are enforceable.
Q:
Under the UCC, a contract for a sale of goods that does not include the quantity will not fail for indefiniteness.
Q:
When no delivery terms are specified in a contract for a sale of goods, there is no basis for determining a remedy.
Q:
Under the UCC, good faith means honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade.
Q:
Under the UCC, parties to sales and lease contracts are not free to establish whatever terms they wish.
Q:
If the parties to a contract for a sale of goods have not agreed on a price, a court will determine a reasonable price at the time for delivery.
Q:
Under the UCC, a sales or lease contract will fail for indefiniteness if one or more terms are left open.
Q:
Certain provisions of UCC Article 2A apply only to consumer leases.
Q:
A lessor is a party who transfers the right to the possession and use of goods under a lease.
Q:
Article 2 of the UCC covers any transaction that creates a lease of goods.
Q:
The UCC imposes some different rules on merchants.
Q:
A merchant is a person who deals in goods of the kind involved in the sales contract or who holds herself or himself out as having skill or knowledge peculiar to the practices or goods being purchased or sold.
Q:
Even if a contract in which goods and services are mixed is primarily a goods contract, any dispute over the services portion will not be decided under the UCC.
Q:
A contract for the sale of minerals is considered to be a contract for the sale of goods if the severance is to be made by the seller.
Q:
For an item to be characterized as a "good" under the UCC, it must be intangible.
Q:
Under the UCC, a sale is the passing of title from a seller to a buyer for a price.
Q:
Article 2 of the UCC sets forth the requirements for sales contracts and Article 2A covers similar issues for lease contracts.
Q:
The UCC views the entire commercial transaction for the sale and payment for goods as a single legal occurrence.
Q:
Real estate transactions are always governed by Article 2 of the UCC.
Q:
Key of G Products, Inc., offers to sell to Harmony Company one hundred MP3 players at $50 a piece, subject to certain specific delivery dates. Harmony replies with a signed purchase order that reads, "Accept your offer for 100 I-appliances at $50 each. Must be delivered to our warehouse." Key of G does not respond or deliver the goods. Harmony files a suit for breach of contract, to which Key of G answers that there is no contract because Harmony's purchase order contained additional terms and is not signed by Key of G. Can Harmony recover? Explain.
Q:
Secure Courier, Inc., has a requirements contract with Petro Distribution Corporation that obligates Petro to supply Secure with all the gasoline it needs for its delivery vehicles for one year at $2.30 per gallon. A clause inserted in small print in the contract by Secure, and not noticed by Petro, states, "The buyer reserves the right to reject any shipment for any reason without liability." For six months, Secure orders and Petro delivers under the contract without any controversy. Then, because of a war in the Middle East, the price of gasoline to Petro increases substantially. Petro tells Secure it cannot possibly fulfill their contract unless Secure agrees to pay $2.50 per gallon. Secure, in need of the gasoline, agrees in writing to modify the contract. Later that month, Secure learns it can buy gasoline at $2.40 per gallon from Refined Oil Company. Secure refuses delivery of its most recent order from Petro, claiming, first that the contract allows it to do so without liability, and second, that it is required to pay only $2.30 per gallon if it accepts the delivery. Discuss Secure's contentions.
Q:
Toro, S.A., which is based in Mexico, enters into a contract for the purchase of portable livestock fencing from United Fencing Company, which is based in the United States. This contract is governed by
a. Mexican law.
b. the provisions in the laws of both countries that are similar.
c. the Uniform Commercial Code.
d. the United Nations Convention on Contracts for the International Sale of Goods.
Q:
Olga enters into a contract to buy a refrigerator from a Prairie States Appliance store with the price to be paid in monthly installments. After thirty-six months of payments, Olga has paid more than twice the price of a similar stove. Eighteen payments remain due under the contract.
Under the UCC, the court can evaluate the contract to determine whether it was unreasonably unfair and one sided
a. at the time it was made.
b. at the end of its term.
c. in the middle of its performance.
d. at the time of Olga's suit.
Q:
Olga enters into a contract to buy a refrigerator from a Prairie States Appliance store with the price to be paid in monthly installments. After thirty-six months of payments, Olga has paid more than twice the price of a similar stove. Eighteen payments remain due under the contract.
Olga files a suit against Prairie States, claiming that their contract is so unfair and one sided that it would be unreasonable to enforce it. Olga is asserting
a. the concept of good faith.
b. the principle of fair trade.
c. the predominant-factor test.
d. the doctrine of unconscionability.
Q:
Gail enters into a contract with Hi-Price Appliances, Inc. In a suit between the parties over payment under the contract, Gail claims that a certain clause is unconscionable. If the court agrees, it may
a. enforce, limit, or refuse to enforce the contract or the disputed clause.
b. enforce the contract without the disputed clause only.
c. limit the application of the disputed clause only.
d. refuse to enforce the entire contract only.
Q:
Bert's Bagels & Nosh, Inc., and other bakeries refer to a "baker's dozen" as consisting of a collection of thirteen baked goods. This is an example of
a. course of dealing.
b. course of performance.
c. none of the choices.
d. usage of trade.
Q:
Fresh Produce, Inc., and Great Grocery Stores dispute the interpretation of an ambiguous phrase in their contract. In a suit between the parties to construe the contract, a court may accept evidence of
a. consistent additional terms only.
b. consistent additional terms and contradictory terms only.
c. contradictory terms only.
d. anything extrinsic to the contract.
Q:
Rita, the manager of the State University (SU) soccer team, orally agrees to lease a certain number of specially made SU banners from Top Banners, Inc. This lease is enforceable only if Top has made a substantial start on making the banners and
a. Rita agreed to the lease on behalf of the SU soccer team.
b. SU does not have other, similar banners available.
c. the banners are not suitable for others in the course of Top's business.
d. the soccer season has not ended and SU goes to the finals.
Q:
Raul agrees to ship to Ben one hundred ceiling fans for $5,000. Raul initials his notes of the deal, which include the terms, and files the notes in his office. Ben initials his own notes of the deal, which include the terms, and files the notes in his office. Raul fails to ship the fans. Against Raul, as a contract, the deal is
a. enforceable, because under the UCC a contract need not written.
b. enforceable, because Raul's initialed notes are a sufficient writing.
c. enforceable, because Ben's initialed notes are a sufficient writing.
d. not enforceable.
Q:
Equipment Rental Corporation and Floodlights, Inc., are parties to an oral agreement for a lease of goods with payments in excess of $10,000. They may satisfy the Statute of Frauds by
a. mutually agreeing not to commit fraud.
b. restating the terms in a phone call.
c. setting out the terms in an e-mail.
d. shaking hands on the deal.
Q:
Jackson owns an antiques store. He sells a grand piano to Fred for $5,000, a old jukebox to Sam for $499, an antebellum chest of drawers to Josephine for $659 and a gold ring to Wendy for $999. Which of Jackson's sales must be in writing to be enforceable?
a. The grand piano only
b. The grand piano and the gold ring only
c. The grand piano, the chest of drawers and the gold ring only
d. The grand piano, the chest of drawers, the jukebox and the gold ring
Q:
Quinn enters into a series of agreements with Reba involving a sale of a Suite Dreams Motel, including the land, building, furnishings, shares of stock in Suite Dreams Company, and a contract with Trudy to create an ad campaign. Reba suspects that Quinn may be misrepresenting the facts. The UCC Statute of Frauds governs
a. the sale of any of the property evidenced by a writing.
b. the entire deal, including the marketer's services.
c. the sale of the furnishings priced at $500 or more.
d. the sale of the land and the building.
Q:
Trend-Rite Clothiers, Inc., sells t-shirts to Brand Name Stores, Inc., under an existing contract. When textile costs increase, Brand agrees to a price increase, but later wants to cancel the contract. Brand may
a. cancel the contract immediately.
b. cancel the contract only after accepting a final shipment.
c. cancel the contract only on reasonable notice.
d. not cancel the contract.