Q&A Hero

Q: Which of the following is true of rejection of goods by the buyer? A. A rejection by the buyer can be done even after the buyer has expressed acceptance of the goods. B. A buyer can claim ownership of the goods even after rejection. C. A rejection by the buyer can occur even before the goods are tendered and inspected. D. A rejection must be done within a reasonable time after delivery or tender to the buyer.

Q: Brenner entered into a written contract with the Inkblot Corporation for $1,000 worth of office supplies. Inkblot subsequently sent Brenner some supplies that were not requested in the contract. Brenner noticed that the order did not match the contract, but he accepted the nonconforming goods. Which of the following is true of this situation? A. The Inkblot Corporation should cure the improper tender. B. Inkblot does not have the right to cure the improper delivery since it has been accepted. C. Brenner can reject the goods without informing Inkblot of the defect in the supply. D. Brenner can accept the goods and through the court, obligate the Inkblot Corporation to cure the improper delivery.

Q: In a tender of payment: A. a buyer offers to turn the money over to the seller. B. a buyer shows a seller his or her legal tender. C. the seller puts conforming goods at the buyer's disposition. D. the seller provides storage facilities for goods to the buyer.

Q: _____ is money that may be offered legally in satisfaction of a debt and that must be accepted by a creditor when offered. A. Tender of payment B. Warranty C. Legal tender D. Tender of performance

Q: The implied warranty of merchantability provides that, unless excluded in one of the ways discussed, whenever a merchant sells goods, the merchant warrants that the goods are merchantable that is, they are reasonably fit for the purpose for which they are sold.

Q: Garcia purchases a used shotgun from Andy who had purchased it from Jane who purchased it from Maria who had stolen it from Songhee. Only Maria has broken the warranty of title.

Q: The phrase "sold as is" will exclude implied warranties.

Q: Turban, an immigrant who speaks little English, enters into a contract to pay $300 per month for ten years to purchase an auto from Travel Motor Co. The appraised retail value of the car is $5000. What legal remedy would release Turban from his contract? A. Unconscionability B. Specific performance C. Punitive damages D. Implied understanding

Q: Which of the following is true of a shipment contract? A. The seller must put the goods in the possession of the carrier. B. The seller must tender the delivery of goods to the buyer. C. The seller offers to turn the goods to the buyer, and the buyer offers to pay for them. D. The seller tenders the delivery of goods to the carrier, along with the document title.

Q: In August 2007, Zano orders 10 guitars from Music Retailers for his class which is scheduled to start in January, 2008. After two months Music Retailers notifies him that it cannot fill his order. This notification is an anticipatory breach of contract.

Q: A seller cannot sue a buyer of goods for breach of contract if the seller is able to resell the goods.

Q: The Garden club orders 40 T-shirts from Shirt City Inc., to be printed with the club name and motto for a total price of $400. The Garden club breaches the contract and Shirt City discovers that the resale value of the shirts is $1 each. Shirt City may sue the Garden club for the order price of the T-shirts.

Q: The statute of limitations for breach of a sales contract is two years.

Q: An express warranty must be in the written form.

Q: An implied warranty is one created by the statements of the seller and not one that is imposed by law.

Q: A commercial unit is a single whole for the purpose of sale, the division of which impairs its character or value on the market.

Q: A buyer may revoke an acceptance if the acceptance was made on the assumption that their nonconformity would be corrected by the seller and the seller does not do so.

Q: If a seller offers to cure an improper delivery of goods, he or she must always do so before the contractual time for performance expires.

Q: Legal tender cannot be refused by a seller.

Q: In a C.O.D shipment, the buyer has paid for what turns out to be defective goods. It means the buyer has made a binding acceptance of the goods.

Q: Conway Retailers contracts to buy office furniture from Blue Ridge Manufacture to install in a newly constructed office building. About half of the delivered furniture is defective and Conway rejects it. Conway may recover the cost of inspecting the defective furniture from Blue Ridge.

Q: Downtown Construction Co. obtained possession on April 1 of a bulldozer from Bulldozer Sales Co., to use in Downtown's business with a right to return the bulldozer no later than June 1 with no obligation other than to pay for the fuel the bulldozer used. Downtown is owned by Alice who allows her fifteen-year-old son Bob to operate the bulldozer on May 1 on a Downtown job. Bob is inexperienced and wrecks the bulldozer. Explain who has the risk of loss.

Q: Sue contracts to purchase Sanyo's auto. Only Sue needs to make a tender of performance.

Q: To be in a position to bring suit on a sales contract, the seller of goods must make tender of delivery.

Q: Sonia's warehouse is holding Joe's goods. Joe is selling the goods to Bonique. If Sonia tells Bonique that she may pick up the goods, tender by the seller has occurred.

Q: Tender of payment requires the buyer of goods to offer legal tender only.

Q: Nathan makes a high bid of $10,000 on an antique chair. He realizes he should not have spent this much money and attempts to withdraw his bid before the auctioneer announces the end of the sale; however, the auctioneer insists that since this auction is without reserve, Nathan may not withdraw his bid. Discuss the case.

Q: Seth was the highest bidder for an antique chest at an auction sale. There was nothing to indicate whether the auction was with or without reserve. The auctioneer withdrew the chest from the auction without accepting Seth's bid because the bid was too low. Is the auctioneer legally entitled to withdraw the chest from the sale? Explain.

Q: Warren left his watch to be cleaned at a jewelry store. By mistake, a clerk sold the watch to Foley. Foley did not know that the watch rightfully belonged to Warren. Analyze the case.

Q: Hussein purchases a sofa from Big Box Furniture Inc. on Saturday who agrees to deliver the sofa without charge to Hussein at 3 p.m. the following Monday. Hussein forgets about the delivery and is not home at 3 p.m. on Monday when the Big Box delivery truck arrives. The delivery truck takes the sofa back to the Big Box store where it is destroyed in a fire that occurs at 9 p.m. Monday. Discuss the risk of loss in this case.

Q: Ralph, of Miami, Florida, ordered "100 red widgets" from Maria's business located in Seattle, Washington. Shipment was f.o.b. Seattle via Red Freight Co. By mistake Maria sent "100 green doodads" to Ralph. The shipment was destroyed when the Red Freight truck was involved in a traffic accident in Oklahoma City. Ralph had insurance coverage that includes "items purchased that are in transit." Explain whether Ralph or Maria has the risk of loss.

Q: Sun Supply Co., offered to sell Apartment Management Inc., air conditioner filters at $15 per case in a signed writing that stated the price was good for sixty days. Apartment Management discovers that other sellers charge $20 per case for identical air conditioner filters but before it can accept Sun Supply's offer, Sun Supply withdraws the offer after only 30 days, stating that changed market conditions has forced it to charge more. Discuss the case.

Q: Lucky Used Cars using their contracts form, agree to sell Alvin a truck for $5,000. The contract provides that it may not be modified except by a signed writing. After entering into the contract, Lucky and Alvin orally agree that Lucky will include new floor mats and a bed liner for an extra $100. At the time of delivery Lucky refuses to provide the new floor mats and bed liner unless Alvin pays $. Discuss the enforceability of the oral agreement Lucky and Alvin had.

Q: Big Choppers orally contracts with Jane to make a custom motorcycle for Jane for $30,000. When completed Jane refuses to accept the motorcycle or pay for it. Discuss the validity of the oral contract.

Q: Which of the following is true of insurable interest? A. Sellers can retain the insurable interest to goods as long as they have the title to them. B. Buyers cannot place insurance on goods. C. Buyers cannot obtain an insurable interest if they might later reject the goods. D. Buyers can obtain insurable interest on goods that are not mentioned in the contract.

Q: Mike and Jane contract to purchase and sell $1,000,000 worth of computer chips to be manufactured in Japan and shipped to San Francisco. The contract is silent about the method of delivery. Mike asserts that delivery is by ship, which is customary in the computer chip industry, but Jane insists that delivery is by air, which is what a previous contract between Mike and Jane provided. Explain how a court will resolve this dispute.

Q: Packers, Inc., bought a new kind of refrigeration system from Coolit for storage of its meats. As part of the contract, Coolit delivered the refrigeration system to the Packers plant, installed it, set its temperature, and then monitored it for several hours to make sure it worked. Packers, Inc., received title to the refrigeration system when: A. the system was delivered to the plant. B. it paid for the system prior to its delivery. C. the system was delivered, installed, and tested. D. it signed the sales contract.

Q: When goods are sent f.o.b. shipment, the title and risk of loss: A. pass to the carrier at the point of origin. B. pass to the buyer at the point of origin. C. pass to the buyer at the destination. D. pass to the buyer when he/she accepts the goods.

Q: Which of the following is true of destination contracts? A. It requires a seller to turn the goods over to a carrier for delivery to the buyer. B. Both title and risk of loss pass to the buyer when goods are given to the carrier. C. Title and risk of loss pass to the buyer once the seller tenders goods at place as per the contract. D. The seller bears no responsibility for seeing that the goods reach their destination.

Q: A document of title allows the person who possesses it to: A. receive the goods named in the document. B. conclusively prove ownership of the goods named in the document. C. receive the goods named in the document free of any creditor claims. D. conclusively prove that the goods are free of defects.

Q: In which of the following cases can reversion of title to the seller occur? A. When a buyer rejects the goods, which a seller has sent as per terms of contract. B. When buyer accepts the goods and returns them after some time due to a defect. C. When a buyer's rejection of goods in not justified. D. When a buyer rejects the goods due to a defect discovered after inspection.

Q: Samantha was looking for a certain shade of thread to complete her needlework on a tablecloth. At a local shop however, she was unable to decide which of the five selected shades would be the closes match to the cloth. The shop owner allows Samantha to take the selected shades home and decide which one she would want to have. This is an example of which of the following? A. Destination contract B. Sale on approval C. Sale on acceptation D. Approval contract

Q: _____ includes any symbol, made with the intent to authenticate a writing. A. Seal B. Informal note C. Mark D. Signature

Q: Under the ____, an electronic signature is defined as "an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record." A. E-Sign Act B. UETA C. UCC D. CSIG

Q: Which of the following is true of international sales law? A. It governs only the formation of a sales contract and the rights and duties that arise from it. B. It is concerned with the validity of a contract that would be governed by other laws. C. It applies to the liability of the seller for death or personal injury caused by the goods to any person. D. It applies to auctions sales, sales of stocks, securities, negotiable instruments or money.

Q: In an ____, after the auctioneer calls for bids on an article or lot, that article or lot cannot be withdrawn unless no bid is made within a reasonable time. A. auction with reserve B. enforced auction C. auction without reserve D. entitled auction

Q: If a person obtains property as a result of another's fraud, misrepresentation, mutual mistake, undue influence, or duress, the person is said to hold only ____. A. voidable rights B. contract rights C. insured rights D. valid rights

Q: Which of the following is true of a firm offer? A. It occurs when parties intend to be bound by a contract but fail to mention the price. B. It occurs when a seller agrees to sell all its produce to a particular buyer. C. It occurs when a merchant promises to hold an offer open without any consideration. D. It occurs when a buyer agrees to buy all its requirements from a particular seller.

Q: Joshua, a merchant, promises in a signed writing to Pedro, a consumer, to hold an offer to sell goods open for five months. However, Joshua sells the goods to another consumer and Pedro sues him for breach of contract. Which of the following is true of this case? A. Joshua is not bound by the contract since firm offers cannot exceed three months. B. Since Joshua is a merchant and is bound by a firm offer made to Pedro, he has breached contract. C. The UCC will not enforce this contract as a firm offer as both parties are not merchants. D. Joshua is bound by this offer only if a five month offer is customary for this type of good.

Q: Which of the following is true of oral contracts for the sale of goods of $500 or more? A. Oral contracts can occur between merchants and consumers for sale of good of $500 or more. B. A written conformation is received and signed by one party, and sent to the other for approval. C. A written conformation is received by a party and to which it does not object to within 10 days. D. An oral objection is accepted to a written confirmation for the sales of goods for $500.

Q: Any method of dealing that is commonly used in a particular field is known as: A. usage of trade. B. contract for sale. C. good faith. D. firm offer.

Q: In which manner can a sales contract be formed? A. It can be formed only through an oral agreement. B. It can be agreed orally and signed in front of a witness. C. It can be only in the written format with all the terms being acceptable to the parties. D. It can be formed by any method that shows the parties have reached an agreement.

Q: _____ are those that are in accordance with the obligations under the contract. A. Future goods B. Nonconforming goods C. Tangible goods D. Conforming goods

Q: The seller is said to have a security interest in shipped goods if the agreement between the buyer and seller allows the seller to retain title after the goods are shipped.

Q: Massive Equipment Co. sends machinery on approval to Mountain Moving Co. While in possession of the machinery, Mountain becomes insolvent. The machinery is subject to the claims of Mountain's creditors.

Q: Buyers obtain an insurable interest even though they might later reject or return the goods to the seller.

Q: Sellers retain an insurable interest in the goods even if they do not have title to them.

Q: Which of the following is considered to be future goods? A. Office furniture B. Stocks C. Fish in the sea D. Gasoline at a gas station

Q: In what respect is a bailment legally different from a sale? A. Title does not transfer in a bailment. B. Title transfers in a bailment but no price is involved. C. In both there is a transfer of title but in a bailment the title reverts to the bailer at the end of the bailment. D. In a sale the title transfer includes all rights of ownership but in a bailment the title transfer includes limited rights of ownership.

Q: A bill of sale provides evidence of the transfer of personal property from one person to another.

Q: Title may pass as soon as goods are identified to the contract even if the goods are still in the possession of the seller.

Q: In a shipment contract, risk of loss does not pass from the seller to the buyer until the buyer receives the goods.

Q: In a contract for which no delivery is required, title to the goods does not pass to the buyer until the buyer receives the goods.

Q: Robert receives a document of title for lumber she purchased. Even though she does not yet possess the lumber, the document transfers to her both title to the lumber and risk of loss for it.

Q: An automobile title certificate under the UCC has the legal status of a document of title.

Q: In an auction with reserve, the auctioneer must accept the highest bid.

Q: Any contract for the sale of goods involving a price of $500 or more is unenforceable unless it is in writing.

Q: Merchant A orally enters into a $1000 contract with Merchant B. Merchant A will be legally bound if Merchant B sends a written confirmation even if Merchant A has not signed it.

Q: Braxton has an oral contract to deliver 500 cases of green beans to Mary for $10,000. In court concerning the validity of the contract, Braxton admits that he sold Mary 100 cases of green beans. The contract is enforceable to only 100 cases of green beans.

Q: Under the UCC, a signature includes any symbol made with the intent to authenticate a writing.

Q: The Convention on Contracts for the International Sale of Goods requires a written contract for the sale of goods when the price exceeds $5,000.

Q: Tibbetts left a television with Quick Fix, Inc., for repair. Quick Fix made tests and diagnosed the problem but never began the actual repairs. Nothing was done on the set for more than three months. After repeated telephone calls demanding that the work be done, Tibbetts asked for the return of the set. Quick Fix refused to give up the set unless Tibbetts paid for the time spent on making the tests. Discuss the case.

Q: Fish not yet caught by a commercial fisher are called future goods.

Q: A gift is legally considered the same as a sale since title passes in both a gift and a sale.

Q: A sale of goods contract offer is silent concerning the method of acceptance. It may be accepted in any reasonable manner.

Q: Jackson Furniture Co., states in writing that their offer to sell sofas to a hospital will be held open for 40 days. The written offer requires a consideration to be legally binding.

Q: Norbert receives an official-looking written notice which states that Mountain Mortgage Inc., from whom he had borrowed money to purchase his house, has assigned Walter all rights to receive payment and that Norbert should make all future mortgage payments to Walter. Discuss Norbert's rights and duties.

Q: Basic Carpet contracts to install stain-resistant carpet in Alice's house for $6,000. Basic Carpet then assigns the right to receive payment from Alice to Home Finance Co. When payment comes due, Alice refuses to pay more than $2,000, asserting that the installed carpet was not stain-resistant. Home Finance asserts that Alice must pay $6,000 since Home Finance was not responsible for installing the carpet. Alice decides to sue Basic Carpet. Discuss the case.

Q: Jennifer contracts to purchase Allison's house when Allison is transferred out of the state. The contract calls for monthly payments but allows Jennifer to pay the remaining balance at any time. Jennifer, on June 1, sends Allison an offer to pay the balance. Allison receives the offer on June 2, but sets it aside until October 1. When Allison realizes that Jennifer has not made any payments for four months, she threatens to sue Jennifer for breach of contract. Discuss the legal rules governing this situation.

Q: Dash's auto insurance policy requires that he file a written notice of claim with the insurance company within ten days of any damage in an auto accident or the insurance company may refuse to pay the damage claim. Dash has several accidents and always simply orally reports the damage to the insurance agent and the insurance company pays the claim; however, on this occasion after his failure to file a written notice of the claim the company refuses to pay the claim. They cite the express language of the insurance policy. Is the insurance company correct? Discuss.