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Law 2 > Chapter 15: The Formation of Sales and Lease Contracts > Flashcards

Chapter 15: The Formation of Sales and Lease Contracts Flashcards

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1
Q

What contracts does the UCC cover?

A

Sales and Lease contracts

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2
Q

The UCC attempts to provide a ____________________________ of rules to deal with all phases ordinarily arising in a commercial sales or lease transaction

A

Consistent, integrated framework

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3
Q

A contract for the sale of goods

A

Sales contract

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4
Q

Article 2 of the UCC

A

Sales

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5
Q

Article 3 of UCC

A

Negotiable Instruments

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6
Q

Article 4 of UCC

A

Bank Deposits-Collections

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7
Q

Article 9 of UCC

A

Secured Transactions

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8
Q

Article 2A of UCC

A

Lease Contracts

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9
Q

The passing of a title to property from the seller to the buyer for a price

A

Sale

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10
Q

The item of property must be

A

Tangible and moveable

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11
Q

Property that has physical existence and can be distinguished by the senses of touch and sight

A

Tangible Property

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12
Q

Property that cannot be seen or touched but exists only conceptually, such as corporate stocks (not covered by article 2)

A

Intangible Property

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13
Q

A test courts use to determine whether a contract is primarily for the sale of goods or for the sale of services

A

Predominant Factor Test

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14
Q

If a contract is primarily for goods,

A

UCC applies to all disputes

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15
Q

Goods associated with real estate can fall under the UCC. How?

A

If they can be severed by the seller

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16
Q

A merchant is a person who

A

Deals in goods of the kind involved in the sales contract
By occupation, holds him/herself out as having special knowledge and skill related to the practices or goods involved in the transaction
Employs a merchant as a broker, agent, or other intermediary

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17
Q

A transfer of the right to possess and use goods for a period of time in exchange for payment

A

Lease

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18
Q

An agreement in which one person agrees to transfer the right to the possession and use of property to another person in exchange for rental payments

A

Lease Agreements

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19
Q

A person who transfers the right to the possession and use of goods to another in exchange for rental payments

A

Lessor

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20
Q

A person who acquires the right to the possession and use of another’s goods in exchange for rental payments

A

Lessee

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21
Q

What are the 3 elements to consumer Leases?

A

A lessor who regularly engages in the business of leasing or selling
A lessee who leases the goods primarily for a personal, family, or household purposes
Total lease payments that are less than $25,000

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22
Q

UCC comes into play only when the parties have failed to provide for

A

Contingency that later gives rise to a dispute

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23
Q

The moment a definite offer is met by an unqualified acceptance, what is formed?

A

A Binding Contract

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24
Q

The UCC states that a sales or lease contract will not fail for indefiniteness even if one or more terms are left open as long as

A

Parties intended to make a contract

Reasonably certain basis of the court to grant an appropriate remedy

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25
Q

This must be expressly stated in the contract

A

Quantity of goods

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26
Q

If parties have not agreed on a price, the court will determine a reasonable price when?

A

At the time of delivery

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27
Q

Honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade

A

Good Faith

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28
Q

Unless otherwise agree, payment is due when?

A

On delivery

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29
Q

The buyer agrees to purchase and the seller agrees to sell all or up to a stated amount of what the buyer needs or requires

A

Requirements Contracts

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30
Q

Implicit Consideration in a requirements contract because?

A

The buyer gives up the right to buy goods from any other seller, and this forfeited right creates a legal detriment

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31
Q

Seller agrees to sell and the buyer agrees to buy all or up to a stated amount of what the seller produces

A

Output Contracts

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32
Q

UCC imposes this on requirements and outputs contracts

A

Good Faith Limitation

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33
Q

AN offer by a merchant that is irrevocable without the necessity of consideration for a stated period of time, or, if no definite period is stated, for a reasonable time, neither period to exceed three months

A

Firm Offer

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34
Q

Occurs when a merchant-offeror gives assurances in a signed writing that the offer will remain open

A

Firm Offer

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35
Q

A merchant’s firm offer is irrevocable without this

A

Necessity of consideration

36
Q

Generally made in any reasonable manner and by any reasonable means

A

Acceptance

37
Q

UCC permits acceptance of an offer to buy goods with or by a prompt promise to ship or by the prompt or current shipment of

A

Conforming or Nonconforming goods

38
Q

Accord with the contract’s terms

A

Conforming Goods

39
Q

Do not accord with the contract’s terms

A

Nonconforming Goods

40
Q

Prompt shipment of nonconforming goods constitutes what?

A

An acceptance and a breach of that contract

41
Q

Within a specified time period or, if no period is specified, within a reasonable time

A

Seasonably

42
Q

If the offeror is not notified within a reasonable time that the offeree has accepted the contract by beginning the performance, then the offeror can treat the offer as having

A

Lapsed Before having acceptance

43
Q

The UCC __________ the mirror image rule

A

Dispenses

44
Q

When one party or both are nonmerchants, a contract is formed according to the terms of whom?

A

The original offer submitted by the original offeror

45
Q

When both parties are merchants, additional terms automatically become part of the contract unless

A

Original offer expressly limits acceptance to its terms
New or changed terms materially alter the contract
Offeror objects to the new or changed terms within a reasonable period of time

46
Q

The UCC does not require a contract modification to be supported by this

A

New consideration

47
Q

The statute of frauds applies to sales contracts priced at _____ or more

A

$500

48
Q

The statute of frauds applies to lease contracts requiring payments of _____ or more

A

$1000

49
Q

The writing of consideration will be sufficient as long as it indicates that the parties intended to form a contract and it is signed by the party against whom

A

enforcement is sought

50
Q

What are the three exceptions to the statute of frauds of consideration

A

Specially Manufactured Goods
Admissions
Partial Performance

51
Q

Testimony or other evidence of the parties’ prior negotiations, prior agreements, or contemporaneous oral agreements

A

Parol Evidence

52
Q

The terms of a fully integrated contract cannot be contradicted by evidence of any prior agreements or contemporaneous oral agreements

A

Parol Evidence Rule

53
Q

A sequence of previous actions and communications between the parties to a particular transaction that establishes a common basis for their understanding

A

Course of Dealing

54
Q

Course of dealing is restricted to that previous sequence of

A

Actions and communications

55
Q

Course of dealing is relevant in ascertaining what?

A

The meaning of the parties’ agreement

56
Q

Course of dealing may give particular meaning to

A

specific terms of the agreement

57
Q

Course of dealing may supplement or qualify

A

terms of the agreement

58
Q

Any practice or method of dealing that is so regularly observed in a place, vocation, or trade that the parties justifiably expect or should expect to be observed in their transaction

A

Usage of Trade

59
Q

The conduct that occurs under the terms of a particular agreement

A

Course of Performance

60
Q

Indicates what the parties to that agreement intended it to mean

A

Course of Performance

61
Q

When construction is unreasonable, this order of priority controls

A

Express Terms
Course of Performance
Course of Dealing
Usage of Trade

62
Q

One that is so unfair and one sided that it would be unreasonable to enforce it

A

Unconscionable contract

63
Q

When the contract is unconscionable, the court can

A

Refuse to enforce the contract
Enforce the remainder of the contract without the unconscionable clause
Limit the application of any unconscionable clauses to avoid and unconscionable result

64
Q

The right to ownership

A

Title

65
Q

In a sale of goods, the express designation of the goods provided for in the contract

A

Identification

66
Q

Takes place when specific goods are designated as the subject matter of a sales or lease contract

A

Identification

67
Q

Identification of existing goods takes place when?

A

At the time the contract is made

68
Q

Identification of future goods takes place when?

A

When the goods are shipped, marked, or otherwise designated by the seller or lessor as the goods to which the contract refers

69
Q

Goods that are part of a larger mass are identified when?

A

When the goods are marked, shipped, or somehow designated by the seller or lessor

70
Q

Goods that are alike by physical nature, agreement, or trade usage

A

Fungible Goods

71
Q

In a passage of title, this statement must appear

A

“Unless otherwise explicitly agreed”

72
Q

Without an explicit agreement to the contrary, title passes to the buyer when and where?

A

At the time and place the seller performs by delivering the goods

73
Q

A contract for the sale of goods in which the seller is required or authorized to ship the goods by carrier

A

Shipment Contract

74
Q

With a shipment contract, the seller assumes liability for any losses or damage to the goods until when?

A

They are delivered to the carrier

75
Q

A contract for the sale of goods in which the seller is required or authorized to ship the goods by carrier and tender delivery of the goods at a particular destination

A

Destination Contract

76
Q

With a destination contract, the seller assumes liability for any losses or damage to the goods until when?

A

They are tendered at the destination specified in the contract

77
Q

Title passes in a shipment contract when

A

Goods are shipped

78
Q

Title passes in a destination contract when

A

Goods are tendered at that destination

79
Q

A paper exchange in the regular course of business that evidences the right to possession of goods

A

Document of Title

80
Q

When a document of title is required, title passes to the buyer when?

A

When and where the document is delivered

81
Q

When no documents of title are required and delivery is made without moving the goods, title passes when?

A

When and where the sales contract is made

82
Q

If the goods have not been identified, title does not pass until when?

A

Identification occurs

83
Q

If the seller is a thief, the seller’s title is

A

Void

84
Q

If the seller is a thief, the real owner can do what?

A

Reclaim the goods from the buyer

85
Q

Titles are voidable if the goods that he or she is selling were obtained by

A

Fraud
Dishonored check
From a minor
On credit when the seller was insolvent

86
Q

A condition in which a person cannot pay his or her debts as they become due or ceases to pay debts in the ordinary course of business

A

Insolvent

Law 2 (22 decks)

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