Chapter 20

Question 1

Article 2 and 2a

Answer 1

Article 2- sales (of goods, not real property or stocks and bonds)
2a- leases

Question 2

Sales contracts

Answer 2

A contract for the sale of good under which the ownership of goods is transferred from a seller to a buyer for a price

Question 3

Sale

Answer 3

The passing of title (evidence of ownership rights) from the seller to the buyer for a price

Question 4

Tangible property

Answer 4

Property that has physical existence and can be distinguished by touch, sight, etc. a car is tangible

Question 5

Intangible property

Answer 5

Property that is incapable of being apprehended by the senses

• intellectual property
• patent

Question 6

Predominant factor test

Answer 6

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

Question 7

Merchant

Answer 7

A person who is engaged in the purchase and sale of goods. Under the UCC, a person who deals in goods of the kind involved in the sales contract

Question 8

Lease agreement

Answer 8

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

Question 9

Lessor

Answer 9

One who transfers the right to the possession and use of the goods

Question 10

Lessee

Answer 10

One who acquires the right to the possession and use of goods

Question 11

Consumer lease

Answer 11

1. The lessor regularly engages in the business of leasing or selling
2. The lessee leases the good for personal, family or, household purpose
3. Certain provisions of 2a apply only to consumer leases

Question 12

Finance leases

Answer 12

Involved a lessor, lessee and a supplier.

- the lessee’s obligations are irrevocable and independent from the financer’s obligations

Question 13

Open terms

Answer 13

Terms can be left open and the contract will not fail for indefiniteness if the parties intended to make a contract and there is a reasonably certain basis for the court to grant an appropriate remedy

Question 14

Requirement contract

Answer 14

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
- normally enforceable

Question 15

If the buyer promises to purchase only what he or she wishes then the promise is illusory and

Answer 15

Unenforcebale

Question 16

Output contract

Answer 16

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

Question 17

Firm offer

Answer 17

An offer (by a merchant) that is irrevocable without consideration for a period of time (no longer than 3 months). A firm offer by a merchant must be in writing and must be signed by the offeror

Question 18

Seasonably

Answer 18

Within a specified time period. If no period is specified, within a reasonable time

Question 19

An unilateral can be accepted by beginning performance in common law but under UCC,

Answer 19

They require notification of acceptance

Question 20

Electronic writing or an email is sufficient if

Answer 20

1. It indicates the parties intended to form a contract

2. Is signed by the party against whom enforcement is sought.

Question 21

Exceptions to writing requirements

Answer 21

1. The goods are specially manufactured
2. The goods are not suitable for resale or lease to others
3. The seller or lessor has substantially started to manufacture the goods

Question 22

Sale of lease and goods is more based on

Answer 22

State statutory law

Question 23

Fully integrated contract

Answer 23

A written contract that constitutes the final expression of the parties agreement. If a contract is integrated, evidence extraneous to the contract that contradicts or alters the meaning of the contract in any way is inadmissible

Question 24

Course of dealing

Answer 24

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

Question 25

Usage of trade

Answer 25

Any practice or method of dealing having such regularity of observance in a place, vocation or trade as to justify an expectation that it will be observed with respect to the transaction in question

Question 26

Course of performance

Answer 26

The conduct that occurs under the terms of a particular agreement; such conduct indicates what the parties to an agreement intended it to mean

Question 27

Rules of construction

Answer 27

1. Express terms
2. Course of performance
3. Course of dealing
4. Usage of trade

Question 28

Choice of language clause

Answer 28

A clause in a contract designating the official language by which the contract will be interpreted in the event of a future disagreement over the contracts terms

Question 29

Choice of law clause

Answer 29

A clause in a contract designating the law (of a particular state or nation) that will govern the contract

Question 30

Force majeure clause

Answer 30

A provision in a contract stipulating that certain unforeseen events such as war, political upheavals, acts of God or other events will excuse a party from liability for nonperformance of contractual obligations