Q&A Hero

Q: Which of the following types of paper require only a delivery of the instrument to the holder by the payee? A. A bearer instrument. B. A delivery instrument. C. An order instrument. D. A transfer instrument. E. An acknowledgement instrument.

Q: Which of the following types of paper require delivery and an endorsement by the holder? A. A bearer instrument. B. A delivery instrument. C. An order instrument. D. A transfer instrument. E. An acknowledgement instrument.

Q: A person who creates an endorsement is called a(n) _________________. A. allonge B. transferor C. transferee D. endorser E. endorsee

Q: ___________ is a person receiving an endorsement. A. Allonge B. A transferor C. A transferee D. An endorser E. An endorsee

Q: If a negotiable instrument is payable to whoever possesses the instrument, then it is a(n) ______ instrument. A. demand B. order C. transactional D. bearer E. payor

Q: The transfer of possession of a negotiable instrument to a third party who becomes a holder of the negotiable instrument is a(n) _____________________. A. transfer B. negotiation C. acknowledgement D. referral E. delivery

Q: Under UCC Section 1-201(b)(21), the party who possesses a negotiable instrument payable to the party or to the bearer of the instrument is the __________________. A. holder B. deliverer C. transferor D. acknowledger E. orderee

Q: When a specific payee is named in an instrument, the instrument is known as a(n) _____ instrument. A. demand B. order C. transactional D. bearer E. payor

Q: If an instrument is silent as to the time of payment, which of the following is assumed by UCC Section 3-108(a)? A. That it is a demand instrument B. That it is a time instrument C. That it is a void instrument D. That it is a voidable instrument E. That it is a nonnegotiable instrument

Q: For an instrument to be negotiable, the instrument must indicate that it was created for the purpose of being ______. A. transferred B. paid C. maintained D. banked E. retained

Q: Which of the following is true regarding whether an agent's signature may satisfy the requirement of negotiability that the signature of a maker or drawer appear? A. An agent's signature on behalf of his or her principal binds the principal and satisfies the signature requirement for negotiability. B. An agent's signature on behalf of his or her principal cannot bind the principal and does not satisfy the signature requirement for negotiability. C. An agent's signature on behalf of his or her principal binds the principal and satisfies the signature requirement for negotiability only if specific authorization from the principal allowing the agent to act on the specific transaction at issue is attached to the document. D. An agent's signature on behalf of his or her principal binds the principal and satisfies the signature requirement for negotiability only if the instrument is for an amount over $1,000. E. An agent's signature on behalf of his or her principal binds the principal and satisfies the signature requirement for negotiability only if the instrument is in an amount of $1,000 or less.

Q: Which of the following satisfies the currency requirement for negotiability in the United States? A. U.S. dollars only B. U.S. dollars or English pounds C. U.S. dollars, English pounds, or euros D. U.S. dollars, English pounds, euros, and Japanese yen E. U.S. dollars, English pounds, euros, Japanese yen, and gold

Q: Which of the following does not satisfy the requirement that to be negotiable an instrument must be payable at a time certain or on demand? A. The instrument states a specific date for payment. B. The instrument is dated and then states "payment will be made 5 days after the above date." C. An instrument that permits an extension of the payment and also a fixed time for payment, but the maker does not have the right to extend the time of payment indefinitely. D. An instrument that states, "payment will be made 10 days after delivery of the goods." E. An instrument that permits acceleration of payment and has a fixed date of payment if the acceleration clause is not affected.

Q: Which of the following is false regarding the UCC's signature requirement for a negotiable instrument? A. An "X" will suffice if the party intended that the mark be placed on the instrument and uses that mark to identify himself. B. A signature may be made by means of a device or machine. C. A signature may be made manually. D. The signature of an agent on behalf of the principal binds the principal and satisfies the signature requirement. E. None of these.

Q: Which of the following is true regarding the relationship, if any, between negotiability and an unconditional promise or order to pay? A. There is no such requirement in order to find negotiability because a conditional order to pay is sufficient. B. A promise or order to pay must be specific and not be implied in order for negotiability to be found. C. Simply acknowledging a debt satisfies the negotiability requirement of an unconditional promise to pay. D. A common IOU is sufficient to satisfy the negotiability requirement of an unconditional promise to pay. E. Simply acknowledging a debt satisfies the negotiability requirement of an unconditional promise to pay, and also a common IOU is sufficient to satisfy the negotiability requirement of an unconditional promise to pay.

Q: Which of the following was the result on appeal in The Twin City Bank v. Kenneth Isaacs, the case in the text in which the bank appealed a judgment against it for significant damages after the bank wrongfully held funds of depositors who had been the victim of check forgery? A. That the bank could not be held liable for damages because it was recouping its own losses. B. That the bank could not be held liable under common law because of its contractual agreement with the depositors and that the UCC was inapplicable. C. That the bank could be held liable but only up to $1,000. D. That the bank could be held liable for actual damages but not for mental anguish. E. That the bank could be held liable for financial losses and also for mental anguish.

Q: Which of the following was the result on appeal in Fernando Tatis v. U.S. Bancorp, the case in the text in which the plaintiff, a major-league baseball player, asked that the defending bank hold his bank statements and failed to notify the bank within 30 days of forgeries by one of his employees? A. That by agreeing to hold the bank statements the bank impliedly agreed to waive any timely notice of forgeries. B. That regardless of when notice was received, the plaintiff/depositor was entitled to the return of funds released based on forgeries. C. That the plaintiff/depositor and the bank would be required to split losses on a 50/50 basis based on comparative principles because they were both at fault. D. That the plaintiff/depositor could not recover for forgeries made and not reported for more than 30 days after bank statements were made available. E. That the plaintiff/depositor could not recover because the forgeries were not reported within 30 days of when bank statements were made available and also that by not timely reporting the first forgery, the plaintiff/depositor lost all rights to recover funds lost because of forgeries by the same forger.

Q: What characteristics must a written document have in order to satisfy the requirement that a negotiable instrument be in writing? A. A signature by both parties and an allonge. B. An allonge and movability. C. Relative permanence and a signature by both parties. D. Movability and a signature by both parties. E. Relative permanence and movability.

Q: The quality of a negotiable instrument that ensures its longevity is known as _________________. A. movability B. allonge C. relative permanence D. negotiation E. alteration

Q: The quality of a negotiable instrument that ensures it is mobile and available is called ____________________. A. relative permanence B. movability C. alteration D. allonge E. negotiation

Q: A ______ is a specific draft, drawn by the owner of a checking account, ordering the bank to pay the payee from that drawer's account. A. promissory contract B. certificates of deposit C. note D. check E. time instrument

Q: Which of the following is a draft with respect to which the drawer and drawee are the same bank or branches of the same bank? A. Cashier's check B. Traveler's check C. Certified check D. Cashier's checks, traveler's checks, and certified checks E. A cashier's check and a traveler's check, but not a certified check

Q: Which of the following was the result on appeal in New Wave Technologies Inc. v. Legacy Bank of Texas, the case in the text involving whether endorsements of both payees were required in order for the bank involved to properly release funds on a check made out to "Maxim Solutions Group/New Wave Technologies" and providing on the back that "Each Payee Must Endorse Exactly As Drawn"? A. That under the UCC the slash meant "and" resulting in the endorsements of both payees being required before the bank could properly release funds on the check. B. That the slash was ambiguous and would, therefore, be interpreted to mean "and" resulting in the endorsements of both payees being required before the bank could properly release funds on the check. C. That the slash was ambiguous and would, therefore, be interpreted to mean "or" resulting in the endorsement of only one payee being required before the bank could properly release funds on the check. D. That the slash was ambiguous resulting in the check being non-negotiable regardless of how many signatures were on it. E. That while the check would normally be interpreted to require only one payee, the statement on the back that "Each Payee Must Endorse Exactly As Drawn" resulted in the signature of both payees being required before the bank could properly release funds.

Q: A certificate of deposit is a ______ of the bank. A. note B. draft C. novation D. check E. promissory contract

Q: Under the UCC, an instrument "payable on demand" as one that ______. A. states that it is payable on demand or at sight, or otherwise indicates that it is payable at the will of the holder B. does not state any time of payment C. is payable within ten days after presentment D. states that it is payable on demand or at sight or otherwise indicates that it is payable at the will of the holder, or does not state any time of payment E. states that it is payable on demand or at sight, otherwise indicates that it is payable at the will of the holder; does not state any time of payment; or is payable within ten days after presentment

Q: A promise made by a bank to pay a payee a certain amount of money at a future time is called a A. Note B. Draft C. Novation D. Check E. Certificate of deposit

Q: Under UCC Section 3-103(a)(6), an order by a drawer to a drawee to pay a payee is known as a ______________. A. note B. draft C. novation D. check E. certificate of deposit

Q: With a(n) ______ instrument, the payee or subsequent holder can demand actual payment at any time. A. time B. demand C. recourse D. nonrecourse E. immediate

Q: With a(n) ______ instrument, payment can be made only at a specific time designated in the future. A. time B. demand C. recourse D. nonrecourse E. immediate

Q: In a sales contract, how can payment by the buyer be made? A. Cash and negotiable instruments B. Credit arrangements and negotiable instruments C. Cash and credit arrangements D. Negotiable instruments and cash E. Cash, credit arrangements, and negotiable instruments

Q: A written document containing the signature of the creator that makes an unconditional promise or order to pay a sum certain in money at either a time certain or on demand is called a _____________. A. negated instrument B. promised instrument C. negotiable instrument D. promissory agreement E. negotiable agreement

Q: Which of the following are examples of negotiable instruments? A. Checks and oral agreements B. Drafts and stocks C. Notes and oral agreements D. Checks, drafts, and notes E. Checks and drafts, but not notes

Q: Which of the following is false regarding requirements for an instrument to be negotiable? A. The instrument must be a written document. B. The instrument must be signed by the creator of the instrument at the end of the instrument. C. The instrument must have an unconditional promise or order to pay. D. The amount to be paid in the instrument must be a sum certain in money. E. All of these are false.

Q: A substitute check is a check that is substituted for a lost check.

Q: The UCC prohibits bank customers from postdating checks.

Q: The customer cannot order a stop payment on an electronic fund transfer.

Q: Which of the following is a substitute for cash? A. A negated instrument B. A promised instrument C. A negotiable instrument D. A promissory agreement E. A negotiable oral promise

Q: Banks are required by the UCC to certify the check if a customer has sufficient funds in the account.

Q: In the check collection process, the depositary bank cannot also be the payor bank.

Q: Sometimes the depositary is the same bank as the payor bank.

Q: An allonge is an additional piece of paper with the endorsements that must be firmly attached to the endorsement.

Q: According to the UCC, a check is a special kind of draft.

Q: Under UCC Section 3-104, money orders are considered checks.

Q: A bearer instrument is payable to a specific, named payee.

Q: Order paper must be delivered but not endorsed in order to be negotiated.

Q: The person creating the endorsement is the endorsee and the person receiving the endorsement is the endorser.

Q: Negotiable instruments can be payable in a national currency or stocks but may not be tangible goods or services.

Q: The words "pay to cash" are sufficient words of negotiability.

Q: Negotiation is the transfer of possession to a third party who becomes the holder of the negotiable instrument.

Q: If an instrument is silent as to the time of payment, the UCC presumes that it is a demand instrument.

Q: A negotiable instrument must be a conditional order to pay.

Q: The law does not permit an oral negotiable instrument.

Q: An automated signature satisfies the UCC requirement that the signature of the creator appear in order for an instrument to be negotiable.

Q: The UCC defines a negotiable instrument as a written document that is signed by the maker with an unconditional promise to pay back a sum certain in money on demand or at a time certain.

Q: A negotiable instrument may be oral if the parties agree.

Q: The UCC requires that all written documents must be have relative permanence and movability to be negotiable.

Q: A document whereby a bank promises to pay a payee a certain amount of money at a future time is called a time instrument.

Q: A time instrument is a draft that allows the payee to collect payment only at a specific time in the future.

Q: If an instrument fails to qualify as a negotiable instrument, it means that the instrument fails to be an enforceable contract.

Q: A negotiable instrument is a substitution for cash.

Q: UCC Article 2(A) labels commercial papers as negotiable instruments.

Q: A note is a promise, by the maker of the note, to pay a payee.

Q: A draft is an instrument validating an order by a drawer to a drawee to pay a payee.

Q: Refused Furniture. Selina arranges to sell furniture from her furniture store to Roland for $3,000. Roland was supposed to give Selina a $500 deposit on February 1 and pay the remainder in monthly installments. Selina was to deliver the furniture by February 7. Roland did not pay Selina as promised on February 1. He asked her to wait until March 1, but she refused. She also refused to deliver the furniture. Selina was able to sell the furniture for only $2,500 because of a downturn in the economy. Roland told Selina that she had no right to withhold or sell his furniture and that he was suing. Selina incurred $100 in additional amounts in advertising costs to advertise the furniture that Roland initially purchased. Selina saved $40 in delivery costs because the subsequent purchaser picked up her own furniture. Which of the following is true regarding any right of Selina to recover the additional advertising fees she incurred from Roland? A. She is entitled to recover the damages if she can show that Roland agreed to pay such damages in his contract with her. B. She is entitled to recover the damages if she can show that Roland orally agreed to pay such damages. C. She is entitled to recover the damages if she can show that Roland has a history of breaching contracts of sale. D. Selina will be able to recover the damages so long as they were reasonably incurred because of Roland's breach. E. She is not entitled to recover the fees because she had no right to resell the furniture.

Q: Refused Furniture. Selina arranges to sell furniture from her furniture store to Roland for $3,000. Roland was supposed to give Selina a $500 deposit on February 1 and pay the remainder in monthly installments. Selina was to deliver the furniture by February 7. Roland did not pay Selina as promised on February 1. He asked her to wait until March 1, but she refused. She also refused to deliver the furniture. Selina was able to sell the furniture for only $2,500 because of a downturn in the economy. Roland told Selina that she had no right to withhold or sell his furniture and that he was suing. Selina incurred $100 in additional amounts in advertising costs to advertise the furniture that Roland initially purchased. Selina saved $40 in delivery costs because the subsequent purchaser picked up her own furniture. Which of the following is true regarding any deduction in damages to which Roland is entitled? A. Roland is not entitled to any deduction because he was the breaching party. B. Roland is entitled to a deduction for the delivery expenses only if he can show that Selina agreed in writing to deduct those in the event of a breach. C. Roland is entitled to a deduction for the delivery expenses only if he can show that Selina agreed orally or in writing to deduct those in the event of a breach. D. Roland is entitled to a deduction for the delivery expenses because that was a savings to Selina. E. Roland is entitled to a deduction for the delivery expenses because Selina breached the contract by not delivering the furniture to him and then pursuing an action for damages.

Q: Sally, who has a candy shop, agreed to sell Ricky, a teacher, all the chocolate candy bears in her shop for treats for his class. Unfortunately, through no fault of hers, Sally's air conditioner went out and half of the bears partially melted. What are the rights and duties of the parties in relation to the contract?

Q: Hot Toaster. Rebecca bought a toaster from Super Store and brought it home. A friend of hers, Greg, was at her house making toast. The toaster malfunctioned and shocked Greg resulting in a small burn to his hand requiring medical attention. At a garage sale, Rebecca also purchased a blender from a friend, Samantha. When she paid for the blender, Rebecca said that it would be great for making smoothies. Samantha said nothing and just smiled while taking Rebecca's money. Unfortunately, the blender was not powerful enough to make smoothies. Which of the following is true regarding whether Samantha made an implied warranty of fitness for a particular purpose to Rebecca that the blender would make smoothies? A. Samantha did not make an implied warranty of fitness for a particular purpose because there is no proof that Rebecca was relying on Samantha to make the selection. B. Samantha did not make an implied warranty of fitness for a particular purpose because Samantha is not a merchant. C. Samantha did not make an implied warranty of fitness for a particular purpose because there is no proof that Rebecca was relying on Samantha to make the selection and also because Samantha is not a merchant. D. Samantha made an implied warranty of fitness for a particular purpose to Rebecca that the blender would make smoothies because she had a duty to tell Samantha otherwise. E. Regardless of whether she said anything or not, Samantha made an implied warranty of fitness for a particular purpose to Rebecca that the blender would make smoothies because she sold the blender.

Q: Refused Furniture. Selina arranges to sell furniture from her furniture store to Roland for $3,000. Roland was supposed to give Selina a $500 deposit on February 1 and pay the remainder in monthly installments. Selina was to deliver the furniture by February 7. Roland did not pay Selina as promised on February 1. He asked her to wait until March 1, but she refused. She also refused to deliver the furniture. Selina was able to sell the furniture for only $2,500 because of a downturn in the economy. Roland told Selina that she had no right to withhold or sell his furniture and that he was suing. Selina incurred $100 in additional amounts in advertising costs to advertise the furniture that Roland initially purchased. Selina saved $40 in delivery costs because the subsequent purchaser picked up her own furniture. Which of the following is true regarding Roland's claim that Selina had no right to withhold his furniture? A. Roland is correct. Selina was required to deliver the furniture, but she retained the right to sue him for any deficiency. B. Roland is correct but only because of the special UCC exception for consumer goods. C. Roland is incorrect. Selina had a right to withhold the furniture. D. Roland is incorrect but only if Selina can prove that she had no reason to believe that he was a credit risk prior to signing the contract of sale. E. Roland is correct because of federal consumer protection laws.

Q: Refused Furniture. Selina arranges to sell furniture from her furniture store to Roland for $3,000. Roland was supposed to give Selina a $500 deposit on February 1 and pay the remainder in monthly installments. Selina was to deliver the furniture by February 7. Roland did not pay Selina as promised on February 1. He asked her to wait until March 1, but she refused. She also refused to deliver the furniture. Selina was able to sell the furniture for only $2,500 because of a downturn in the economy. Roland told Selina that she had no right to withhold or sell his furniture and that he was suing. Selina incurred $100 in additional amounts in advertising costs to advertise the furniture that Roland initially purchased. Selina saved $40 in delivery costs because the subsequent purchaser picked up her own furniture. Which of the following is true regarding Roland's claim that Selina had no right to sell the furniture he initially purchased? A. Roland is correct. Selina had no right to sell the furniture, but she retained the right to sue him for any deficiency. B. Roland is correct but only because of the special UCC exception for consumer goods. C. Roland is incorrect. Selina had a right to resell the furniture. D. Roland is incorrect but only if Selina can prove that she had no reason to believe that he was a credit risk prior to signing the contract of sale. E. Roland is correct because of federal consumer protection laws.

Q: Hot Toaster. Rebecca bought a toaster from Super Store and brought it home. A friend of hers, Greg, was at her house making toast. The toaster malfunctioned and shocked Greg resulting in a small burn to his hand requiring medical attention. At a garage sale, Rebecca also purchased a blender from a friend, Samantha. When she paid for the blender, Rebecca said that it would be great for making smoothies. Samantha said nothing and just smiled while taking Rebecca's money. Unfortunately, the blender was not powerful enough to make smoothies. Based on the facts presented, what type of warranty did Super Store give Rebecca? A. An express warranty. B. An implied warranty of merchantability. C. An implied warranty of fitness for a particular purpose. D. An express warranty, an implied warranty of merchantability, and an implied warranty of fitness for a particular purpose. E. An implied warranty of merchantability and an implied warranty of fitness for a particular purpose, but not an express warranty.

Q: Hot Toaster. Rebecca bought a toaster from Super Store and brought it home. A friend of hers, Greg, was at her house making toast. The toaster malfunctioned and shocked Greg resulting in a small burn to his hand requiring medical attention. At a garage sale, Rebecca also purchased a blender from a friend, Samantha. When she paid for the blender, Rebecca said that it would be great for making smoothies. Samantha said nothing and just smiled while taking Rebecca's money. Unfortunately, the blender was not powerful enough to make smoothies. Which of the following rights, if any, does Greg have against Super Store in most states? A. None because he did not buy the toaster. B. None because he is not married to Rebecca. C. None because he was not married to Rebecca nor was he a relative of Rebecca. D. He may sue but only if Rebecca joins in the suit with him. E. He may sue Super Store for his injuries.

Q: Hot Toaster. Rebecca bought a toaster from Super Store and brought it home. A friend of hers, Greg, was at her house making toast. The toaster malfunctioned and shocked Greg resulting in a small burn to his hand requiring medical attention. At a garage sale, Rebecca also purchased a blender from a friend, Samantha. When she paid for the blender, Rebecca said that it would be great for making smoothies. Samantha said nothing and just smiled while taking Rebecca's money. Unfortunately, the blender was not powerful enough to make smoothies. Which of the following is true regarding whether Samantha made an express warranty to Rebecca that the blender would make smoothies? A. Samantha made an express warranty by not speaking up regarding problems with blender. B. Samantha made an express warranty by not speaking up regarding problems with the blender only if Rebecca can prove that Samantha knew about the problems. C. Samantha made an express warranty by not speaking up regarding problems with the blender only if Rebecca cannot prove that Samantha knew about the problems. D. Samantha made an express warranty by not speaking up regarding problems with the blender only if Samantha can prove that she did not know about the problems. E. Samantha did not make an express warranty.

Q: Boat Tow. Donnie went to a new car dealership and told the salesperson, which was not the manager, that he needed a new car that would get good gas mileage and would also pull his big boat. The salesperson encouraged him to buy a smaller car that the salesperson promised would pull the boat. Donnie bought the car and used it to pull the boat. Unfortunately, the heavy pull on the car did significant damage to the car's engine. Donnie complained to the salesperson that denied any liability. Donnie, who had half a semester of business law, informed the salesperson that along with the sale of the car he also received an express warranty and an implied warranty of merchantability, and that he could recover under either of those theories. Will Donnie be able to recover damages based upon breach of the implied warranty of fitness for a particular purpose? A. Yes. B. No, because there was no express warranty. C. No, because Donnie's only right of recovery was for breach of the implied warranty of merchantability. D. No, because Donnie's only right of recovery was for breach of an express warranty. E. No, because Donnie as a reasonable person should have known that the car would not pull the boat regardless of what the salesperson said.

Q: New Furniture. Penny purchased $3,000 worth of furniture from Bob's furniture shop. Through an arrangement with Bob, Penny financed the purchase through a financing company called Let Us Help You. Twenty-nine days after the goods were delivered to her, Penny had a disagreement with Let Us Help You regarding the amount of interest she would be required to pay. She notified Bob on that day that she was rejecting the goods. Bob claimed that she did not properly reject the furniture and also that she acted in bad faith. Penny says that she properly rejected and denies that she acted in bad faith. She also says that, in any event, she cannot be charged with both wrongful rejection and also bad faith because of double jeopardy. Which of the following is the correct analysis of Penny's claim that she cannot be charged with both a wrongful rejection and bad faith because of the double jeopardy bar? A. Penny is correct. B. Penny is correct that she cannot be charged with both a wrongful rejection and bad faith; but the UCC requires that conclusion, not the double jeopardy bar. C. Penny is correct that she cannot be charged with both a wrongful rejection and bad faith; but the common law requires that conclusion, not the double jeopardy bar. D. Penny is correct that she cannot be charged with both a wrongful rejection and bad faith; but federal statutory law requires that conclusion, not the double jeopardy bar. E. Penny is incorrect. She can be charged with both a wrongful rejection and also bad faith.

Q: Boat Tow. Donnie went to a new car dealership and told the salesperson, which was not the manager, that he needed a new car that would get good gas mileage and would also pull his big boat. The salesperson encouraged him to buy a smaller car that the salesperson promised would pull the boat. Donnie bought the car and used it to pull the boat. Unfortunately, the heavy pull on the car did significant damage to the car's engine. Donnie complained to the salesperson that denied any liability. Donnie, who had half a semester of business law, informed the salesperson that along with the sale of the car he also received an express warranty and an implied warranty of merchantability, and that he could recover under either of those theories. Is Donnie correct that the car was sold with an implied warranty of merchantability? A. No, because there was no writing guaranteeing that warranty signed by the salesperson. B. No, because the salesperson was only engaged in exaggeration. C. No, because only the manager can make such a warranty. D. No, both because nothing was in writing and also because only the manager can make such a warranty. E. Yes.

Q: Boat Tow. Donnie went to a new car dealership and told the salesperson, which was not the manager, that he needed a new car that would get good gas mileage and would also pull his big boat. The salesperson encouraged him to buy a smaller car that the salesperson promised would pull the boat. Donnie bought the car and used it to pull the boat. Unfortunately, the heavy pull on the car did significant damage to the car's engine. Donnie complained to the salesperson that denied any liability. Donnie, who had half a semester of business law, informed the salesperson that along with the sale of the car he also received an express warranty and an implied warranty of merchantability, and that he could recover under either of those theories. Will Donnie likely be able to recover damages based upon a breach of the implied warranty of merchantability? A. No, because the implied warranty of merchantability was that the car would, for example, be fit for the ordinary purposes for which such goods are used. Pulling the boat was not an ordinary purpose for that small car. B. Yes, because Donnie informed the salesperson about the need for the car to pull the boat. C. Yes, because the salesperson told Donnie that the car would pull the boat. D. No, because of the lack of an implied warranty of fitness for a particular purpose. E. No, because there was no warranty of merchantability.

Q: New Furniture. Penny purchased $3,000 worth of furniture from Bob's furniture shop. Through an arrangement with Bob, Penny financed the purchase through a financing company called Let Us Help You. Twenty-nine days after the goods were delivered to her, Penny had a disagreement with Let Us Help You regarding the amount of interest she would be required to pay. She notified Bob on that day that she was rejecting the goods. Bob claimed that she did not properly reject the furniture and also that she acted in bad faith. Penny says that she properly rejected and denies that she acted in bad faith. She also says that, in any event, she cannot be charged with both wrongful rejection and also bad faith because of double jeopardy. Which of the following is true regarding the claim of Bob that Penny failed to properly reject the goods? A. Bob is incorrect because under the UCC Penny had 30 days in which to reject the goods. B. Bob is incorrect only if Penny can establish that Let Us Help You miscalculated the amount of interest she owed. C. Bob is incorrect only if Penny can show that the goods were overpriced. D. Bob is correct only if Bob can show that the goods were priced at reasonable market value. E. Bob is correct.

Q: New Furniture. Penny purchased $3,000 worth of furniture from Bob's furniture shop. Through an arrangement with Bob, Penny financed the purchase through a financing company called Let Us Help You. Twenty-nine days after the goods were delivered to her, Penny had a disagreement with Let Us Help You regarding the amount of interest she would be required to pay. She notified Bob on that day that she was rejecting the goods. Bob claimed that she did not properly reject the furniture and also that she acted in bad faith. Penny says that she properly rejected and denies that she acted in bad faith. She also says that, in any event, she cannot be charged with both wrongful rejection and also bad faith because of double jeopardy. Which of the following is true regarding the claim of Bob that Penny failed to act in good faith? A. Bob is incorrect because under the UCC Penny had 30 days in which to reject the goods. B. Bob is incorrect only if Penny can establish that Let Us Help You miscalculated the amount of interest she owed. C. Bob is incorrect only if Penny can show that the goods were overpriced. D. Bob is correct because Penny made no claim that the goods were nonconforming. E. Bob is correct only if Bob can show that the goods were priced at reasonable market value.

Q: New Furniture. Penny purchased $3,000 worth of furniture from Bob's furniture shop. Through an arrangement with Bob, Penny financed the purchase through a financing company called Let Us Help You. Twenty-nine days after the goods were delivered to her, Penny had a disagreement with Let Us Help You regarding the amount of interest she would be required to pay. She notified Bob on that day that she was rejecting the goods. Bob claimed that she did not properly reject the furniture and also that she acted in bad faith. Penny says that she properly rejected and denies that she acted in bad faith. She also says that, in any event, she cannot be charged with both wrongful rejection and also bad faith because of double jeopardy. Which of the following is true regarding the standard of good faith that would be applied in regard to Penny? A. In this situation, good faith means honesty in fact. B. In this situation, good faith means honesty in fact and also reasonable commercial standards of fair dealing. C. In this situation, good faith means perfect tender. D. In this situation, good faith means a lack of commercial impracticability. E. In this situation, good faith means both perfect tender and a lack of commercial impracticability.

Q: Ann chipped a tooth on a peach pit while eating a can of mixed fruit. She wants to sue the manufacturer of the fruit mix. Which of the following would be the manufacturer's best defense? A. That food products do not come with a warranty of merchantability. B. That no express warranty was made. C. That no implied warranty of fitness for a particular purpose was made. D. That the presence of the peach pit should not have been unexpected. E. That the injury was minor.