Q&A Hero

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

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: 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: 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: 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: 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.

Q: Priscilla, who worked for a dry cleaner, came up with a great new idea for a type of press that speeded up the process immensely. She quit her job, hired labor and purchased materials, and manufactured a number of the presses. She sold the presses to her friend Phil for resale. Phil began advertising and distributing the press, but was notified by ABC Company that the sales violated its patent. After investigation, Phil determined that ABC had the better argument and demanded that Priscilla refund the purchase price. Priscilla declined on the basis that she had no idea that a patent on a similar press was in existence. Who will likely win the dispute and why? A. Phil will likely win because Priscilla violated the implied warranty of merchantability. B. Phil will likely win because Priscilla violated the implied warranty of fitness for a particular purpose. C. Phil will likely win because Priscilla violated the warranty of title. D. Priscilla will likely win because she had no knowledge of any previous patent. E. Priscilla will likely win both because she had no knowledge of any previous patent and also because the duty was on Phil to investigate whether any patents existed prior to his purchase of the presses.

Q: Mary sells handmade earrings for a living. Susan is a new lawyer and a friend of Mary who gives legal advice to Mary in return for earrings. Susan tells Mary that under the Magnuson-Moss Act she is required to provide all buyers with a written warranty setting forth their rights as consumers. Mary asks if there is not a way around that because she is tired of complaining customers who do not take care of their earrings and that she would love to find a way to provide no warranties whatsoever. Which of the following is true regarding Susa's advice and warranties on the earrings? A. Susan is wrong, and Mary is free to disclaim warranties. B. Susan is partially correct, and Mary must provide a limited written warranty under the Magnuson-Moss Act. C. Susan is correct, and Mary must provide a full written warranty under the Magnuson-Moss Act. D. Susan is partially correct, and Mary must provide a limited written warranty under the Magnuson-Moss Act only if her average gross sales are over $5,000. E. Susan is partially correct, and Mary must provide a full written warranty under the Magnuson-Moss Act only if her average gross sales are over $5,000.

Q: Under which of the following circumstances will a court refuse to uphold modifications or limitations to remedies agreed upon by the parties? A. When they seem unfair. B. When one party is a corporation. C. When neither party is a corporation. D. When one side was not represented by an attorney. E. When the remedies fail in their essential purpose.

Q: Which of the following was the result in Hill v. Gateway 2000, the case in the text in which the purchaser of a computer failed to read a contract requiring arbitration that came packaged with the computer and asked the court to determine that a seller of computers could not limit buyers' remedies or require arbitration by bundling hardware and legal documents? A. That the contract was binding on the purchaser because the purchaser accepted the risk of not reading the contract. B. That the contract was binding on the purchaser because the contract's requirement of arbitration was reasonable. C. That the contract was binding on the purchaser because the contract's requirement of arbitration was actually in the purchaser's favor. D. That the contract was unconscionable and nonbinding. E. That the contract was nonbinding because it should have been provided to the purchaser for review before the computer was shipped.

Q: Stacy, located in Florida, is entering into a contract with Natasha, located in Russia, for the purchase of snow globes to sell to people who do not typically get to see snow. Stacy is familiar with the UCC but uneasy about what law would apply should she have a dispute with Natasha regarding the contract. She would like for Florida law to apply. Which of the following is the best advice to Stacy? A. Stacy should attempt to have a contract clause inserted providing that the law of Florida would govern any dispute. B. While a requirement that Florida law would govern the dispute would likely be deemed unconscionable, Stacy should attempt to have a contract clause inserted providing that international law would govern any dispute. C. There is nothing that Stacy can do because Russian law, the law of the seller, would govern any dispute. D. Stacy does not need to do anything because, as a matter of law, Florida law, the law of the buyer, would govern any dispute. E. It depends on the value of the contract. If it is in an amount over $1,000, Stacy should attempt to obtain a provision in the clause that Florida law governs; otherwise, she has no option but to allow a court to later determine the conflicts issue.

Q: Under the UCC buyers and lessees may recover goods identified in the contract if the seller or lessor becomes insolvent within ______ after receiving the first payment due under the agreement. A. 5 days B. 10 days C. 16 days D. 30 days E. 60 days

Q: Which of the following usually requires that the seller or lessor deliver the particular goods identified in the contract? A. Absolute order B. Absolute performance C. Specific performance D. Specific order E. None of these

Q: When does the UCC allow buyers and lessees to seek the remedy of specific performance? A. Only when goods are unique B. Only when a remedy at law is inadequate C. Only when goods are worth more than $500 D. When goods are unique, when a remedy at law is inadequate, or when goods are worth more than $500 E. When goods are unique or when a remedy at law is inadequate, but not because the goods are worth more than $500

Q: Which of the following is true regarding buyers or lessees who want to accept nonconforming goods and then seek monetary damages? A. Buyers and lessees are allowed to do so in order to receive the benefit of the bargain, but they must give the seller/lessor reasonable notice of the defect. B. Buyers and lessees are allowed to do so in order to receive the benefit of the bargain, and there is no requirement that they give the seller/lessor prior notice of the defect. C. Buyers may do so in order to receive the benefit of the bargain so long as reasonable notice of the defect is given, but lessors may not. D. Lessors may do so in order to receive the benefit of the bargain so long as reasonable notice of the defect is given, but buyers may not. E. Buyers and lessors may do so only if the seller/lessee agrees to the retention of the nonconforming goods and does not request their return.

Q: Which of the following is the right of a buyer and lessee to substitute goods for those due under a sales or lease agreement? A. Swap B. Rearrange C. Cover D. Shift E. Reallocate

Q: Which of the following must a buyer do in obtaining cover? A. Demonstrate good faith in obtaining the substitute goods B. Pay a reasonable amount for the substitute goods C. Act without unreasonable delay in purchasing the substitute goods D. Purchase goods that are reasonable substitutes E. All of these

Q: Which of the following are damages for lost profits a buyer or lessee may recover in the event of a breach? A. Approved damages B. Consequential damages C. Remedial damages D. Approved, consequential, and remedial damages E. Approved and consequential damages, but not remedial damages

Q: What does the UCC provide regarding liquidated damages if the parties do not agree to them? A. That the nonbreaching seller may claim against a breaching buyer 20 percent of the purchase price or $500, whichever is less, as liquidated damages. B. That the nonbreaching seller may claim against a breaching buyer 20 percent of the purchase price or $500, whichever is more, as liquidated damages. C. That the nonbreaching seller may claim against a breaching buyer 30 percent of the purchase price or $1,000, whichever is less, as liquidated damages. D. That the nonbreaching seller may claim against a breaching buyer 30 percent of the purchase price or $1,000, whichever is more, as liquidated damages. E. Nothing

Q: Which of the following means that the seller or lessor has delivered the goods to a carrier or bailee, but the carrier or bailee has not yet turned them over to the buyer? A. In process B. In transit C. In carrier D. Carrier ready E. Transport ready

Q: Assuming a buyer that is insolvent has breached a contract by not paying for goods that are in transit, which of the following may occur? A. The carrier may stop delivery on the entire shipment. B. The carrier may stop delivery only if the quantity shipped is a large shipment. C. The carrier may stop delivery only if a signed writing exists by which the buyer agreed to the remedy of stopping shipment. D. The carrier may stop delivery only if ordered to do so by the bankruptcy judge. E. The carrier may not stop delivery under any circumstances.

Q: The obligations of sellers/lessors and buyers/lessees are determined by which of the following? A. Terms the parties outline in agreements only B. Custom only C. Rules outlined by the Uniform Commercial Code only D. Terms the parties outline in agreements, custom, and rules outlined by the Uniform Commercial Code E. Terms the parties outline in agreements and custom, but not rules outlined by the Uniform Commercial Code

Q: Which of the following damages may a seller receive who resells goods to another buyer when the original buyer is in breach? A. The difference between the resale price and the contract price, plus incidental damages and minus expenses saved. B. The difference between the resale price and the contract price only. C. The difference between the resale price and the contract price minus expenses without any allowance for incidental damages. D. The difference between the resale price and the contract price, plus incidental damages, with no deduction for expenses saved. E. Nominal damages only.

Q: Which of the following are damages identified before the breach occurs? A. Nominal damages B. Compensatory damages C. Reliance damages D. Liquidated damages E. Consequential damages

Q: Which of the following is generally true regarding a liquidated damages provision? A. A provision for liquidated damages is illegal. B. A provision for liquidated damages is void because of public policy. C. A provision for liquidated damages is voidable because of public policy. D. A provision for liquidated damages is enforceable so long as it is not punitive in nature. E. A provision for liquidated damages will be enforced regardless of whether it is punitive in nature.

Q: Which of the following is true regarding whether a seller must provide a warranty under the Magnuson-Moss Act? A. A seller must provide an express, full warranty. B. A seller must provide an implied, full warranty. C. A seller must provide at least an express, limited warranty. D. A seller must provide at least an implied, limited warranty. E. The act does not require that the seller provide any warranties.

Q: Which of the following is true under the Magnuson-Moss Act if a written warranty is silent as to whether or not it is a full warranty? A. It is presumed to be a limited warranty. B. It is presumed to be an express, limited warranty. C. It is presumed to be a limited warranty of merchantability. D. It is presumed to be a limited usage of trade warranty. E. It is presumed to be a full warranty.

Q: Under the Magnuson-Moss Act, what is the effect of a full warranty? A. It means that if the good fails or is defective, the good or its defective part will be replaced; and if replacement cannot be timely effected, the buyer has the right to a refund or a full replacement. B. It means only that the good or its defective part will be repaired. The buyer has no other remedy. C. It means that if the good fails or is defective, the good or its defective part will be replaced; and if replacement cannot be timely effected, the buyer has the right to a refund or a full replacement; and also that the buyer will receive extra funds to account for expenses. D. It means that the buyer must be immediately refunded the full purchase price. E. It means that the buyer has the option of an immediate refund of the full purchase price or repair of the good.

Q: Assuming adoption of the UCC, which of the following is true regarding whether the buyer and seller may negotiate a shorter time for the statute of limitations than that allowed by the UCC? A. The buyer and seller may not negotiate a shorter time for the statute of limitations than that allowed by the UCC so long as the time period is not less than two years. B. The buyer and seller may negotiate a shorter time for the statute of limitations than that allowed by the UCC without any limits. C. The buyer and seller may negotiate a shorter time for the statute of limitations than that allowed by the UCC so long as the time period is not less than one year. D. The buyer and seller may negotiate a shorter time for the statute of limitations than that allowed by the UCC so long as the time period is not less than six months. E. The buyer and seller may negotiate a shorter time for the statute of limitations than that allowed by the UCC so long as the time period is not less than two years.

Q: When was the Magnuson-Moss Act passed? A. 1950 B. 1955 C. 1970 D. 1975 E. 2000

Q: Which of the following is required by the Magnuson-Moss Act when the seller issues a written warranty for a consumer good? A. The seller must indicate whether that warranty is a full warranty or a limited warranty. B. The seller must provide a full warranty and must indicate as such. C. The seller must provide a warranty of merchantability and an express warranty, and must indicate as such. D. The seller must provide an implied warranty of trade usage and must indicate as such. E. The seller must provide an implied warranty of trade usage and an implied warranty of merchantability, and must indicate as such.

Q: How can a buyer waive implied and express warranties? A. By failing to examine goods for which an express warranty was created by a sample or model. B. By failing to comply with the seller's request to inspect the goods. C. By failing to examine goods for which an express warranty was created by a sample or model, and also by failing to comply with the seller's request to inspect the goods. D. By failing to require that warranties be given in writing and also by failing to comply with the seller's request to inspect the goods. E. None of these. A buyer may not waive both implied and express warranties.

Q: What is the effect of a failure to comply with the statute of limitations? A. It operates as a waiver of warranty rights under the contract. B. There is no effect so long as the plaintiff can establish that he or she was not aware of the statute of limitations. C. It operates as a waiver of warranty rights only if the defendant can establish that the plaintiff had actual knowledge of the statute of limitations. D. It results in the plaintiff only having the right to sue for injunctive relief, not damages. E. It results in the plaintiff only having the right to sue for damages, not injunctive relief.

Q: Under the UCC, the statute of limitations is ________ years. A. one B. two C. three D. four E. six

Q: Under the UCC, the seller must bring a lawsuit on a breached contract within ______ years of when the breach occurred or when the seller became aware of it. A. one B. two C. three D. four E. six

Q: Between buyers and sellers in the U.S., which of the following is true regarding disclaiming the warranty of merchantability? A. The disclaimer must be in writing. B. Some states require that the term merchantability be used in the disclaimer. C. The disclaimer may be made orally or in writing. D. The disclaimer must be in writing, and some states require that the term merchantability be used in the disclaimer. E. The disclaimer may be made orally or in writing, and some states require that the term merchantability be used in the disclaimer.

Q: Which is true regarding a buyer's right to waive warranties? A. A buyer may not waive warranties. B. A buyer may waive implied warranties but not express warranties. C. A buyer may waive express warranties but not implied warranties. D. A buyer may waive both express warranties and implied warranties. E. A buyer may waive express warranties and the implied warranty of fitness for a particular purpose, but not the implied warranty of merchantability.