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Chp 20 - Formation of Sales and Lease Contracts

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Law 1 Quizzes 



1. Bild-Rite, Inc., is a Colorado-based firm that does business with clients throughout North America. Bild-Rite oversees construction projects, and buys and sells commercial buildings, undeveloped land, and construction supplies and other goods. Bild-Rite has had to deal with work-site theft and vandalism. With respect to these circumstances, the Uniform Commercial Code (UCC) provides a framework for

a. commercial transactions for the sale of and payment for goods.

b. international construction contracts.

c. domestic and foreign transactions in real estate.

d. prosecuting crimes against business interests.

2. Omni Corporation is a Pennsylvania-based firm that does business throughout the United States. With respect to this circumstance, the UCC has been adopted by, and applies in,

a. a few of the states.

b. all of the states, in whole or in part.

c. half of the states.

d. none of the states, to date.

3. Over the course of a year, Retail Marketers, Inc., sells goods from its inventory and one of its warehouses. In exchange, Retail receives checks and other items that substitute for cash, which Retail uses to repay a loan from Savings Bank. Article 2 of the UCC governs

a. the checks.

b. the payment of the loan.

c. the sale of the buildings.

d. the sale of the goods.

4. Nemo pays Office Supply Company $1,500 for a laptop computer. Under the UCC, this is

a. a gift.

b. a lease.

c. a sale.

d. not a gift, a lease, or a sale.

5. In a dispute over a sale involving a bicycle, Dain argues that as to this deal Elle’s Hobby Shop, where Dain bought the bike, is a merchant. A court may determine whether Elle’s is a merchant by assessing whether

a. it has sold any bikes within the last year.

b. it holds itself out by occupation as having knowledge or skill unique to the bike in the transaction.

c. its owner enjoys biking.

d. it subscribes to Bike, a biweekly trade magazine.

6. Cleo sells kitchen appliances, and occasionally cleaning supplies, to persons who come into her store, Discount Appliances. One afternoon, Cleo sells a used display shelf to Earl. Under the UCC, Cleo is a merchant of

a. cleaning supplies and kitchen appliances only.

b. cleaning supplies, display shelves, and kitchen appliances.

c. cleaning supplies only.

d. kitchen appliances only.

7. Rally Corporation enters into a contract to sell ski gear to SnoSportz Company, which sells a pair of the skis to Tyra, a consumer, who later sells them to Uli, another consumer. Article 2 of the UCC applies to the sales transactions between

a. all of the buyers and sellers.

b. Rally and SnoSportz only.

c. SnoSportz and Tyra only.

d. Tyra and Uli only.

8. Curtis enters into a contract with Drive-Away Lease Company for a three-year lease of a car. This contract is subject to

a. Article 2 of UCC.

b. Article 2A of the UCC.

c. Article 11 of the CISG.

d. the common law only.

9. Standard Office Corporation pays Tech Products $1,000 to use a Tech computer for a month. For purposes of the UCC, this is

a. a bailment.

b. a consignment.

c. a lease.

d. a sale.

10. Metro Daily and New City Newsstand enter into a contract under which Metro agrees to deliver a certain quantity of newspapers to New City each day. The contract does not include a price term. In a suit between the parties over the price, a court will

a. determine a reasonable price.

b. impose the lowest market price.

c. refuse to enforce the agreement.

d. return the parties to the positions they held before the contract.

11. Regional Products, Inc., agrees to sell to Quantity Dealers Corporation a certain amount of goods but no mention is made of where the goods are to

be delivered. In general, the UCC requires that the delivery take place at

a. a neutral place of business halfway between the parties’ locations.

b. a UCC-designated warehouse.

c. Regional’s place of business.

d. Quantity’s place of business.

12. Roy’s Chick’n Shack orders chicken from Standard Food Supplier, but Standard does not deliver. Roy’s will probably be unable to enforce the agreement if the parties

a. did not limit the duration of the deal.

b. did not specify a payment term.

c. did not specify a quantity term.

d. have not begun to perform. 

13. Desktop Company offers to sell eRetail, Inc., 1,000 computers for a $500,000, states that the offer will be open for six days, and asks for a response by fax. On the fourth day, eRetail sends an acceptance to Desktop via the mail, which is received on the sixth day. In this deal

a. a contract is formed.

b. no contract is formed, because Desktop asked for a response by fax.

c. no contract is formed, because Desktop received the acceptance late.

d. no contract is formed, because eRetail sent the acceptance late.

14. Retail Music, Inc., offers to buy from Super Products Corporation (SPC) 1,000 blank CDs of a certain brand. Without notifying Retail, SPC timely ships CDs of a different brand. This shipment is

a. an acceptance of the offer and a breach of the parties’ contract.

b. an acceptance of the offer and a fulfillment of the parties’ contract.

c. a refusal of the offer and a breach of the parties’ contract.

d. a refusal of the offer and a fulfillment of the parties’ contract.

15. United Farms offers to sell Valu Bakeries, Inc., fifty bushels of wheat. Valu’s representative Wendy responds, “We agree to buy fifty bushels only if the wheat is Grade A quality.” Wendy’s statement is

a. a breach of the parties’ contract.

b. a counteroffer.

c. a fulfillment of the parties’ contract.

d. an acceptance.

16. Rite Clothiers, Inc., sells t-shirts to Brand Name Stores, Inc., under an existing contract. When textile costs increase, Brand agrees to a price increase, but later wants to cancel the contract. Brand may

a. cancel the contract immediately.

b. cancel the contract only after accepting a final shipment.

c. cancel the contract only on reasonable notice.

d. not cancel the contract.

17. Quinn enters into a series of agreements with Reba involving a sale of a Suite Dreams Motel, including the land, building, furnishings, shares of stock in Suite Dreams Company, and a contract with Trudy to create an ad campaign. Reba suspects that Quinn may be misrepresenting the facts. The UCC Statute of Frauds governs the sale of

a. any of the property evidenced by a writing.

b. any of the property that may involve fraud.

c. the furnishings priced at $500 or more.

d. the land and the building.

18. Tasty Pastries, Inc., and other bakers refer to a “baker’s dozen” as consisting of a collection of thirteen baked goods. This is an example of

a. course of dealing.

b. course of performance.

c. square dealing.

d. usage of trade.

19. Gail enters into a contract with Hi-Price Appliances, Inc. In a suit between the parties over payment under the contract, Gail claims that a certain clause is unconscionable. If the court agrees, it may

a. enforce, limit, or refuse to enforce the contract or the disputed clause.

b. enforce the contract without the disputed clause only.

c. limit the application of the disputed clause only.

d. refuse to enforce the entire contract only.

20. Overseas Corporation (OC), a U.S. firm, orally agrees to sell six freezers to Pisa Pizza, Ltd., in Italy. OC fails to deliver. Under the CISG, Pisa Pizza can

a. enforce the agreement.

b. not enforce the agreement because it is not in writing.

c. not enforce the agreement because the price term is not specified.

d. not enforce the agreement because there is no consideration.


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