Chapter 17 Vocabulary

Question 1

A contract for the sale of goods.

Answer 1

Sales Contract

Question 2

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

Answer 2

Sale

Question 3

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

Answer 3

Tangible Property

Question 4

Property that cannot be seen or touched but exists only conceptually, such as corporate stocks. Such property is not governed by Article 2 of the UCC.

Answer 4

Intangible Property

Question 5

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

Answer 5

Predominant-Factor Test

Question 6

Under the UCC, a person who deals in goods of the kind involved in the sales contract or who holds herself or himself out as having skill or knowledge peculiar to the practices or goods being purchased or sold.

Answer 6

Merchant

Question 7

Under Article 2A of the UCC, a transfer of the right to possess and use goods for a period of time in exchange for payment.

Answer 7

Lease

Question 8

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

Answer 8

Lease Agreement

Question 9

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

Answer 9

Lessor

Question 10

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

Answer 10

Lessee

Question 11

An agreement in which a buyer agrees to purchase and the seller agrees to sell all or up to a stated amount of what the buyer needs or requires.

Answer 11

Requirements Contract

Question 12

An agreement in which a seller agrees to sell and a buyer agrees to buy all or up to a stated amount of what the seller produces.

Answer 12

Output Contract

Question 13

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).

Answer 13

Firm Offer

Question 14

Within a specified time period or, if no period os specified, within a reasonable time.

Answer 14

Seasonably

Question 15

Prior conduct between the parties to a contract that establishes a common basis for their understanding.

Answer 15

Course of Dealing

Question 16

Any practice or method of dealing that is so regularly observed in a place, vocation, or trade that parties justifiably expect it will be observed in their transaction.

Answer 16

Usage of Trade

Question 17

The conduct that occurs under the terms of a particular agreement, which indicates what the parties to that agreement intended the agreement to mean.

Answer 17

Course of Performance

Question 18

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

Answer 18

Identification

Question 19

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

Answer 19

Fungible Goods

Question 20

A contract for the sale of goods in which the seller is required or authorized to ship the goods by carrier. The seller assumes liability for any losses or damage to the goods until they are delivered to the carrier.

Answer 20

Shipment Contract

Question 21

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 specified in the contract.

Answer 21

Destination Contract

Question 22

A paper exchanged in the regular course of business that evidences the right to possession of goods (for example a bill of lading or a warehouse receipt).

Answer 22

Document of Title

Question 23

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.

Answer 23

Insolvent

Question 24

A purchaser who buys without notice of any circumstance that would cause a person of ordinary prudence to inquire as to whether the seller has valid title to the goods being sold.

Answer 24

Good Faith Purchaser

Question 25

The rule that entrusting goods to a merchant who deals in goods of that kind gives that merchant the power to transfer those goods and all rights to them to a buyer in the ordinary course of business.

Answer 25

Entrustment Rule

Question 26

A buyer who, in good faith and without knowledge that the sale violates the ownership rights or security interest of a third party in the goods, purchases goods in the ordinary course of business from a person in the business of selling goods of that kind.

Answer 26

Buyer in the Ordinary Course of Business

Question 27

A situation in which the person property of one person (a bailor) is entrusted to another (a bailee), who is obligated to return the bailed property to the bailor or dispose of it as directed.

Answer 27

Bailment

Question 28

The right of a party who tenders nonconforming performance to correct his or her performance within the contract period.

Answer 28

Cure

Question 29

A property interest in goods being sold or leased that is sufficiently substantial to permit a party to insure against damage to the goods.

Answer 29

Insurable Interest