Intro to Sales

Question 1

True/False: Lorene, an artist, orally agrees to sell Sabrina a painting for $600. While Lorene is busy talking on the phone, Sabrina writes her a note on the back of an envelope she finds in her purse. The signed note states that she will stop by the studio to pick up the painting within the week. Sabrina changes her mind about the painting, and when Lorene sues to enforce the contract, Sabrina defends on the basis of the statute of frauds. Sabrina will succeed with this defense.

Answer 1

False

Question 2

True/False: Uncle Brandon promises to give his motorcycle to you at the end of the month. This transaction is governed by UCC, Article 2, because a motorcycle is within the definition of “goods.”

Answer 2

False

Question 3

True/False: The UCC has abolished the common law requirement of consideration in all contracts involving the sale of goods.

Answer 3

False

Question 4

True/False: Elizabeth worked as a salesperson in a carpet store. She was in the process of divorcing her husband and needed some money. Elizabeth sold her wedding ring. Elizabeth is considered a merchant with regard to the sale of the ring.

Answer 4

False

Question 5

True/False: The UCC does not apply to contracts for the sale of goods if the value of the goods is less than $500.

Answer 5

False

Question 6

True/False: If the seller has made a substantial beginning in manufacturing custom-ordered goods, then an oral contract may be enforceable regardless of the amount of money involved in the contract.

Answer 6

True

Question 7

True/False: Rachel Retailer sends a preprinted purchase order offering to buy goods from Snidley Supplier. Snidley acknowledges Rachel’s offer with a preprinted acceptance form. The terms of the two forms do not mirror each other. To analyze whether an enforceable contract exists, one must first determine whether the new language in the acceptance is an additional term or a different term.

Answer 7

True

Question 8

True/False: The UCC is federal legislation enacted by Congress.

Answer 8

False

Question 9

True/False: Megan agrees to sell Neff her quartz watch but they do not specify a price. In such a case, the court would not enforce the agreement because all of the essential terms are not present.

Answer 9

False

Question 10

True/False: Leasing goods is an insignificant part of business, so its rules are governed by extensions of the UCC Article related to sales rather than having a separate article of the Code to cover leasing.

Answer 10

False

Question 11

True/False: Under the UCC, a merchant is frequently held to a higher standard of conduct than a non-merchant.

Answer 11

True

Question 12

True/False: Lian contracted for financial services from E-wise. This contract is governed by Article 2 of the UCC.

Answer 12

False

Question 13

True/False: Zubair, Inc. leased the 34th floor in an office building in downtown Pittsburgh. This contract is governed by Article 2A of the UCC.

Answer 13

False

Question 14

True/False: In a mixed contract involving goods and services, Article 2 of the UCC will govern if the predominant purpose is the sale of goods.

Answer 14

True

Question 15

True/False: The UCC imposes a duty of good faith in the performance of all contracts.

Answer 15

True

Question 16

In which of the following situations is the seller a merchant under Article 2 of the UCC?

Answer 16

ZOMPA INC. A TOY MANUFACTURER, CONTRACTED TO SELL DOLLS TO TONTON DEPARTMENT STORE

Question 17

Office Plus, an office supply store, ordered 600 blank CDs from Curtis Co., a manufacturer of computer products. Office Plus placed the order using a preprinted purchase order form; Curtis acknowledged the order by sending a preprinted acceptance form back to Office Plus. Unlike Office Plus’ form which says nothing about packaging, Curtis’s form specifies that the CDs will be packaged in cases of 10 CDs per box, 10 boxes per case. Which statement is correct?

Answer 17

CURTIS’S PACKAGING TERM IS AN ADDITIONAL TERM AND THEREFORE A PART OF THE CONTRACT UNLESS OFFICE PLUS PROMPTLY OBJECTS TO THE TERM

Question 18

Stanziano Construction needs a backhoe to complete a project. If it pays Hofmann Rentals for temporary use of the equipment, the transaction will be governed by:

Answer 18

ARTICLE 2A OF THE UCC

Question 19

Tri, a full-time college student, sold his car to Don, another student. In the performance of this contract, Tri:

Answer 19

HAS A DUTY OF GOOD FAITH WHICH MEANS HONESTY IN FACT

Question 20

Which of the following types of property would be classified as “goods” under Article 2 of the UCC?

Answer 20

A COMPUTER

Question 21

In a “mixed contract,” one involving a sale of both goods and services, the court will:

Answer 21

FIRST DETERMINE THE DOMINANT PURPOSE OF THE CONTRACT

Question 22

Which of the following contracts requires a writing under the UCC, Article 2?

Answer 22

A TOY MANUFACTURER CONTRACTED TO SELL DOLLS VALUED AT 10 G’S TO A DPMT STORE

Question 23

Newt, a gun dealer, offers to sell a rare civil war musket to Rush, another dealer, for “$15,000, insurance and shipping paid by buyer.” Rush responds, “I accept. Insurance and shipping costs divided equally between seller and buyer.” The parties:

Answer 23

HAVE A CONTRACT AND, IN THE MAJORITY OF STATES, THE DIFFERENT TERMS WILL CANCEL EACH OTHER OUT

Question 24

Which of the following contracts is most likely to be declared unconscionable?

Answer 24

A CONSUMER SALES CONTRACT WHICH CHARGES 300 TIMES THE FAIR MARKET VALUE OF THE GOODS

Question 25

If Edmund and Kaylin have a writing mistakenly showing a sale and purchase of goods for $10,000 when the price should have been $1,000, a court will:

Answer 25

ENFORCE THE AGREEMENT, RELYING ON ORAL TESTIMONY TO DETERMINE THE CORRECT PRICE

Question 26

The difference between the UCC requirement of good faith and doctrine of unconscionability is that:

Answer 26

GOOD FAITH FOCUSES ON THE PARTIES’ BEHAVIOR AS THEY PERFORM THE CONTRACT

Question 27

Which of the following is true regarding an open price term?

Answer 27

THE PRICE IS THE’REASONABLE’ PRICE AT THE TIME OF DELIVERY

Question 28

To simplify, clarify, and modernize the law governing commercial transactions, the UCC permits the use of "open terms" in sales contracts. In the use of "open terms," which of the following is true?

Answer 28

ALL OF THE ABOVE ARE TRUE

Question 29

Harriett raises and sells hippos. In order to keep her hippos happy and healthy, she feeds them Hippo Chow, which she buys from the local pet store. Under the UCC, Harriett is:

Answer 29

A MERCHANT OF HIPPOS, BUT NOT OF HIPPO CHOW

Question 30

Dean Builders agrees to purchase all of its sump pump requirements for the new houses it builds from Satisfactory Sump Pump, Inc. These two business have had similar agreements the last three years and Dean's requirements have averaged 100 sump pumps per year. This year there was an unusually wet spring and Dean's requirements doubled to 200 sump pumps. Because of the high demand of sump pumps, the market price of the pumps tripled. Satisfactory Sump Pump, Inc. delivers 100 pumps at $75, the contract price. Satisfactory has exhausted its inventory and cannot deliver any more, so Dean buys the other 100 pumps from other suppliers at $225 each. Dean sues Satisfactory Sump Pump, Inc. for the additional expense. What is the most likely result?

Answer 30

SATISFACTORY SUMP PUMP INC WINS REQUIREMENTS CONTRACTS ARE GOVERNED BY A GOOD FAITH STANDARD AND IT WAS UNREASONABLE FOR DEAN TO DEMAND SO MANY ADDITIONAL PUMPS

Question 31

Under the UCC statute of frauds, the writing for a sale of goods must:

Answer 31

STATE QUANTITY

Question 32

A requirements contract is a contract:

Answer 32

IN WHICH THE SELLER PROVIDES ALL OF THE GOODS THAT THE BUYER NEEDS

Question 33

Betty's BBQ orally contracts with Denny's Design House for 10,000 matchbooks at the price of 10 cents per matchbook. The matchbooks are to be embossed with a logo to be designed by Denny's Design promoting Betty's BBQ. Price, payment terms, delivery terms are agreed upon between the parties. Denny's Design creates the logo, gets Betty's BBQ's approval of the design and begins applying the logo on the matchbook covers. Denny's Design has almost finished the order when Betty's BBQ calls to say it has decided to make the eatery a smoke-free restaurant and cancels the order. Denny's Design sues, but Betty's BBQ states that the agreement is unenforceable under the statute of frauds. Who wins?

Answer 33

DENNY’S DESIGN HOUSE WINS. THIS SITUATION FALLS UNDER AN EXCEPTION TO THE STATUTE OF FRAUDS

Question 34

Price’s Department Store contracted to buy 1,000 drop-waist velour dresses in heather gray from TriColor. Subsequently, TriColor called and asked to ship mink-colored dresses instead of heather gray. Price agreed, in writing, to the change. Which statement is correct?

Answer 34

THE MODIFICATION IS ENFORCEABLE

Question 35

The stated purpose(s) of Article 2 of the UCC is/are:

Answer 35

ALL OF THE ABOVE ARE CORRECT

Question 36

By definition, a sale under Article 2 of the UCC requires:

Answer 36

THAT TITLE TO THE GOODS PASS BETWEEN THE SELLER AND THE BUYER AND THAT A PRICE BE PAID FOR THE GOODS

Question 37

UCC Section 2-204 provides three important rules that enable parties to make a contract quickly and informally. These include all but which of the following?

Answer 37

1. A WRITING SUFFICIENT UNDER THE STATUTE OF FRAUDS MAY BE A SIMPLE MEMO, LETTER…

Question 38

Wayne agrees over the phone to sell L.J. Cartwright 1,000 yards of 1-inch diameter rope. Wayne honestly believes that L.J. Cartwright offered to pay $1.00 per yard whereas L.J.Cartwright actually offered to pay 75 cents per yard. If the parties subsequently take their dispute to court, the fact that L.J.Cartwright admits on the stand that he offered to pay Wayne 75 cents per yard will:

Answer 38

BOTH A AND C ARE CORRECT (L.J. CARTWRIGHT & WAYNE 1000)

Question 39

During the development of commercial law centuries ago, businessmen throughout England and Europe:

Answer 39

ALL OF THE ABOVE

Question 40

ABC Siding, Inc. manufactures aluminum siding. ABC enters into a contract to deliver siding to Slippery Siding, Ltd., a retailer of aluminum siding. The written agreement insists that all modifications to the agreement be in writing and signed by both parties. This prohibition against oral modifications is:

Answer 40

VALID REGARDLESS OF WHETHER THE CLAUSE IS SIGNED SEPARATELY