Quiz #1

Question 1

Buyer and Seller, who have never done business with each other before, enter into an installment contract in which Seller agrees to ship to Buyer a series of 10 installments of 100 widgets in each installment. The contract says that Seller will deliver each installment at Seller’s expense to Buyer’s place of business. Immediately prior to the date for performance of the ninth installment of widgets, Buyer calls Seller and insists that Seller deliver the widgets to Buyer’s place of business. Which of the following statements is most accurate?

A. Buyer might have to pick up the widgets, because course of performance is relevant to showing waiver of an express term
B. Seller must deliver the widgets, because express terms of the contract control course of performance
C. Seller must deliver the widgets, because express terms of the contract control usage of trade
D. Buyer must pick up the widgets, because course of performance controls express terms
E. Seller must deliver the widgets, because express terms of the contract control course of dealing

Answer 1

A

Question 2

Which of the following contract is least likely to be governed by UCC Art 2?

A. A contract with an artist to buy one of his o.g. sculptures
B. A contract for the sale of a raffle ticket in which the winning prize is a computer
C. A contract between a retail buyer and a retail bookstore for the sale of a book
D. A contract to buy the o.g Mona Lisa painting from a seller who has not even acquired it yet from the museum that owns the painting
E. A contract for the sale of natural gas

Answer 2

B

Question 3

Caterer agrees to cook, deliver, and serve a fancy steak dinner for Charity Corp’s annual fundraising event for 200 people. The dinner takes place as planned, but several dozen of the steak dinner served by Caterer that night contained meat that is spoiled. A number of Charity Corp’s guests get sick as a result, and Charity Corp suffers significant financial and reputational damage. If Charity Corp sues Caterer for breach of contract damages, will the contract to provide that night’s dinner for Charity Corp be covered by UCC Art. 2?

A. Yes, if the Court uses the predominant purpose test, but not if the court uses the gravamen of the action test
B. Yes, if the court uses the gravamen of the action test, but not if the court uses the predominant purpose test
C. Yes, whether the court uses the gravamen of the action test or the predominant purpose test
D. No, whether the court uses the gravamen of the action test or the predominate purpose test
E. No, because UCC Art 2 does not apply to the sale or serving of food products

Answer 3

C

Question 4

In a famous article written over 50 years ago, Professor Stewart Macaulay reported the results of his empirical study involving dozens of interviews with business people concerning the role that commercial law played in their day-to-day business dealings. Professor Macaulay concluded in his article that the law has less to do with the daily decisions that business people make than do other non-legal factors such as a company’s reputation in an industry. Which of the following describes a way that sales law is nevertheless relevant in business practice?

A. Litigation can serve as a last resort for an aggrieved party when the two sides cannot work out their differences informally
B. During settlement negotiations, the law provides a background against which parties negotiate so that such negotiations take place “in the shadow of the law.”
C. Business people regularly consult the relevant law to re-write the other side’s contract forms before agreeing to a deal
D. Both A and B
E. A, B, and C

Answer 4

D

Question 5

Car dealership decides to repaint its building for the first time in five years. Because Car Dealership does not repaint very often, it mistakenly ends up buying about twice as much paint as it needs for the job. Car Dealership then decides to sell the excess paint to a furniture warehouse down the street. Which of the following statements concerning this sale of excess paint is most accurate?

A. Car Dealership makes an implied warranty of merchantability regarding the paint, because Car Dealership is a merchant by virtue of its knowledge of business practices generally.
B. Car Dealership makes an implied warranty of merchantability regarding the paint, because Car Dealership is not a consumer
C. Car Dealership makes no implied warranty of merchantability regarding the paint, because although Car Dealership is a merchant generally, in selling the paint Car Dealership is not acting in its mercantile capacity,
D. Car Dealership makes no implied warranty of merchantability regarding the paint, because Car Dealership is not a merchant
E. Car Dealership makes no implied warranty of merchantability regarding the paint, because this is an isolated sale of paint for Car Dealership

Answer 5

E

Question 6

Lessor and Lessee agree to lease of used automobile that has, at he time of the leases inception, a remaining useful life of 12 years. The car is currently worth 16,000 and Lessee has not option to terminate the lease. The lease is for four years at 400 per month and Lessee is responsible for maintenance and insurance. At the end of the lease period, Lessee has an option to purchase the car for an amount equal to its fair market value at the time of the purchase option. Which of the following statements about the lease is most accurate?

A. This is probably a true lease, since there appears to be a reasonable likelihood that Lessor will receive the car back at a time when it still has a meaningful residual value
B. This is probably not a true lease, since a fair-market value purchase option is so attractive that Lessee is almost certain to exercise it and thus will almost certainly because the owners of the car at the end of the lease period
C. This is probably not a true lease, since Lessee will end up paying lease payments that exceed the value of the car and thus would be unlikely to walk away from the lease at the end of its term after investing that much money in lease payments
D. This is probably not a trye lease, since Lessee has no right to terminate the lease and therefore this case fits within one of 1-203’s categories of “definite disguised sales”
E. This is probably not a true lease, since it is inconsistent with the nature of a true lease that Lessee, rather than Lessor, should be responsible for maintenance and insurance

Answer 6

A

Question 7

Same facts as used automobile, except that the lease provides that Lessee has a purchase option of 100 at the end of the four-year lease, and one year into the lease the car is destroyed when a tree falls on top of it. The lease contract provides that Lessee has risk of loss, and Lessee has failed to get insurance. Which of the following statements about the lease is most accurate?

A. This contract is probably a disguised sale, since the destruction of the car guarantees that Lessor will never get the car back at a time when the car has a meaningful residual value
B. This contract is probably a disguised sale, since this lease now fits within one of 1-203’s definite disguised sale categories
C. This contract is probably a true lease, since we need to measure at the inception of the contract the Lessor’s likelihood of ever getting the car back, and a the inception of the contract nobody knew that the car was going to be destroyed
D. This contract is probably a true lease, since risk of loss principle dictate that Lessor rather than Lessee should have had the risk of loss
E. This contract is probably a true lease, since used goods can never be the subject of a disguised sale since some of their residual value has already been spent even prior to the making of the contract

Answer 7

B

Question 8

In a true lease transaction, Lessor leases a pinball machine to Lessee for 5 years at 3,000 per year. Just to be safe, Lessor files a UCC Article 9 financing statement in the appropriate place to give notice of its interest in the machine. One year into the lease, Lessee sells the machine to Buyer, a good-faith purchaser, for 25,000. Lessor learns about the sale and sues Buyer for return of the machine. When Lessor sues Buyer, Lessor will

A. Win, because lessors in true leases generally defeat even the rights of subsequent good-faith purchases for value
B. Win, because Lessor was smart enough to give notice to the world of its ownership interest by filing the financing statement and thus cured the apparent ownership problem
C. Lose, because the lease agreement did not include a provision in the lease that prohibited Lessee from selling the pinball machine
D. Lose, because by filing the financing statement, Lessor is indicating to anyone who searches the UCC Art 9 files that this transaction is actually a secured sale rather than a true lease
E. Lose, because a paramount policy of the UCC is that we must protect good-faith purchasers in the ordinary course of business

Answer 8

A

Question 9

Music Store, which both sells and leases new and used musical instruments, enters into a transaction with Musician involving a new violin owned by Music Store. The violin is worth 10,000 and has a predicated useful life of 20 years. The written contract between the Music Store and Musician is called a lease and involves Musician playing Music Store 200 per month for 60 months for use of the violin. Musician has no right to terminate this lease during the 4-year term. At the end of the lease, which is signed by both parties, includes a bold-faced clause that says, “Both Music Store and Musician acknowledge and intend that this transaction is a true lease rather than a secured sale, and this transaction is a true lease rather than a secured sale, and this transaction shall be treated as a true lease for all legal, tax, and business purposes.” Is this transaction a true lease or a disguised sale?

A. A true lease, because the default terms of UCC Art 2A, like all UCC default terms, can be changed as long as both parties agree.
B. A disguised sale, because Musician is obligated to pay a total amount of lease payments that is equal to or greater than the value of the violin
C. A disguised sale, because the test of UCC 1-203 looks to the actual facts of the transaction rather than the intent of the parties
D. A disguised sale, because this transaction fits within the “certain disguised sale” test found in UCC 1-203(b)(4)
E. Both C and D

Answer 9

E

Question 10

Evaluate the accuracy of the following statement: “If a particular lease transaction gives the lessee the option to terminate the lease at any time, then we can be confident that such a transaction is necessarily a true lease rather than a disguised sale.” The statement is

A. True, because all of the four options under 1-203(b) for a “certain disguised sale” require that the lease not be subject to termination by the lessee
B. True, because if the lessee has an option to terminate the lease at nay time, that means that there is necessarily a reasonable likelihood that the lessor will get the leased goods back at a time when they still have a reasonable residual value in them
C true, because both a and b
D. False, because the terms of the lease could be such that it would make no economic sense for the lessee to exercise its termination right and the lease terms might otherwise make it highly unlikely that the lessor will ever get the leased goods back at a time when they still have a reasonable residual value in them
E. False, because some true leases give the lessee no option to terminate the lease

Answer 10

D

Question 11

Canadian Seller, whose sole place of business is in Toronto, custom-designs computers and makes a contract with Buyer, a Detroit lawyer, for the sale of a 10,000 computer. Seller believes that the computer is for Buyer’s law practice, but in fact it’s for Buyer’s son, who loves computer games and needs a high-end computer to play the latest games. Seller has no reason to know this. Buyer has no reason to know that he is dealing with a seller whose place of business is Canada. The sales contract says nothing about choice of law. This contract

A. Will not be governed by the CISG, since the CISG does not cover sales to consumers, even if the seller has no reason to know that the sale is for a consumer purpose
B. Will not be governed by the CISG, since Buyer has no reason to know from the circumstances that he is dealing with a Seller whose place of business is Canada
C. Will be governed by the CISG, since Seller thinks that is selling the computer for Buyer’s business and has no reason to know otherwise
D. will be governed by the CISG because Buyer and Seller have places of business in different Contracting States
E. will not be governed by the CISG as both A and B are true

Answer 11

B

Question 12

Which of the following sales would not be covered by Art 2 of the UCC?

A. Six bushels of pears from the seller’s orchard to be picked by the seller
B. Six bushels of pears from the seller’s orchard to be picked by the buyer
C. A house (but not the land on which it sits) to be severed by the buyer and moved to the buyer’s land
D. A house (but not the land on which it sits) to be severed by the seller and moved to the buyer’s land
E. Both c and d would not be covered

Answer 12

C

Question 13

Merchant Buyer sends a purchase order to Merchant Seller for two dozen widgets at Seller’s standard price to be delivered in one month to Buyer’s place of business. Buyer’s purchase order says that all of the UCC remedies, including consequential damages, will be available to Buyer in the event of a breach by Seller. Seller sends a timely acknowledgement form that purports to accept Buyer’s offer. However, Seller’s form conspicuously disclaims any consequential damages, adds a term saying that all disputes will be subject to arbitration, and then closes with a boldface clause that says that “Seller acceptance of Buyer’s offer is expressly made conditional on Buyer’s assent to any different or additional terms contained in this acceptance.” Neither Buyer nor Seller reads the other side’s form closely, and Seller ships the two dozen widgets to Buyer the next month. Buyer accepts and pays for the widgets. Do Buyer and Seller have a contract at this point?

A. Yes, the contract was formed at the point when Seller send Buyer the acknowledgement form, despite the different and additional terms that were included in Seller’s form
B. Yes, and the contract was formed at the point when Seller shipped the widgets, since the act by Seller served as a clear acceptance (through conduct) of Buyer’s offer to purchase the widgets
C. Yes, but the contract was not formed until Buyer accepted and paid for the widgets
D. No, because Seller’s form was clear that Buyer had to assent to Seller’s different and additional terms, and Buyer did not in fact assent
E. No, because if we enforce this contract, we are simply returning to the common law’s last-shot doctrine

Answer 13

C

Question 14

Same facts as widgets being delivered, If there is a problem with the widgets, will Buyer be eligible to recover from Seller for consequential damages?

A. No, because Seller made it clear that its acceptance of Buyer’s offer was expressly conditional on Buyer’s assent to any different or additional terms in Seller’s offer, and Seller’s consequential damages disclaimer was clearly a different term
B. No, because even though Buyer and Seller are both merchants, Seller’s disclaimer of consequential damages is a material alteration of Buyer’s offer and therefore does not become part of the contract
C. No, because after knocking out both Buyer’s and Seller’s terms on remedies, we are left with the UCC gap-filler term, which does not allow Buyer to recover consequential damages
D. Yes, because Seller’s conduct in shipping the widgets was an implicit acceptance of all the terms of Buyer’s offer, including Buyer’s right to recover consequential damages
E. Yes, because Buyer’s and Seller’s forms do not agree on remedies, and therefore we go with the UCC gap filler on remedies, which does not allow consequential damages for Buyer.

Answer 14

E

Question 15

Same facts as widgets being delivered, If there is a problem with the widgets, with Seller’s arbitration clause be effective?

A. No, because Buyer’s form did not have an arbitration clause, and the UCC gap filler for dispute resolution does not restrict the aggrieved party to arbitration
B. No, because this was a contract between merchants, and Seller’s additional term of arbitration was a material alteration of Buyer’s offer
C. Yes, because when Buyer accepted and paid for the widgets, Buyer was thereby accepting all of the terms in Seller’s acknowledgement form, including the arbitration clause.
D. Yes, because Seller’s form could not have been more clear that Seller was conditioning its acceptance on Buyer’s assent to any additional or different terms in Seller’s form, and the arbitration clause was an additional term in Seller’s form
E. Yes, because even though Buyer’s form did not include an arbitration clause, UCC gap filler for dispute resolution says that an aggrieved buyer must arbitrate its claims against a breaching seller.

Answer 15

A

Question 16

Merchant Buyer and Merchant Seller make an oral agreement (with witnesses present) for the purchase and sale of 20 widgets for a total cost of 40,000. The two parties agree as part of the oral contract that Seller will not be responsible for any consequential damages that Buyer may incur due to problems with the widgets. The day after the oral agreement, each side sends a signed written confirmation to the other side. The written confirmations agree on the quality, quantity, price, and delivery terms that were all part of the oral contract. However, Seller’s confirmation specifically says that Seller is not responsible for consequential damages (consistent with the oral agreement) whereas Buyer’s confirmation says that Seller is responsible for consequential damages (contrary to the oral agreement). Neither party reads the other party’s confirmation closely, and the two parties perform their respective sides of the contract during the following week. Three months later, one of the widgets malfunctions in Buyer’s factory and causes consequential damages that Buyer would now like to recover from Seller. In a suit by Buyer against Seller for consequential damages, will Buyer’s consequential damages term in its confirmation be enforceable by Buyer?

A. Yes, because under 2-207(1) and 2-207(2), Buyer’s confirmation term on consequential damages and Seller’s confirmation term on consequential damages cancel each other out, leaving the UCC gap filler on consequential damages
B. Yes, because this is a situation where we have a contract by conduct, and therefore 2-207(3) tells us that we must use the terms on which the two writings agree then use the UCC gap fillers for the other terms, which here would include consequential damages
C. Yes, because Seller’s consequential damages disclaimer in the oral contract will be unenforceable due to the Statute of Frauds
D. No, because once the conflicting terms in the two confirmations get knocked out, the terms in the oral contract, including Seller’s consequential damages disclaimer, will prevail
E. No, because Buyer’s consequential damages terms in its written confirmation is a material alteration of damages term in the oral contract.

Answer 16

D

Question 17

Same facts as sale for 20 widgets, except this time, Seller (but not Buyer) sends a written confirmation. In Seller’s written confirmation, nothing is said about consequential damages, but Seller’s confirmation does not include a term requiring that all disputes in this contract will be settled by arbitration. The mode of dispute resolution was not mentioned at all in the oral contract. When Buyer brings a lawsuit for damages against Seller, will Seller be able to enforce the arbitration clause in its written confirmation?

A. No, because this is a contract by conduct and under 2-207(3), the contract consists of terms on which the written confirmation agrees with the oral contract plus UCC gap fillers
B. No, because the additional terms in Seller’s confirmation are mere proposals, and this proposal by Seller was not specifically accepted by Buyer
C. Yes, but only if arbitration is not a material alteration of the oral contract
D. Yes, whether or not arbitration is a material alteration of the contract, because materiality is irrelevant here
E. A and B are true

Answer 17

C

Question 18

Merchant Buyer sends a purchase order to Merchant Seller, who is located in a different country. Both countries are CISG signatories. Buyer’s purchase order requests three dozen widgets for a specific price, states that all remedies for breach will be available to Buyer (including consequential damages), and says nothing about the modes of dispute resolution. Seller responds with an acknowledgement form that agrees on price, quantity, and delivery terms, but purports to disclaim consequential damages and, in addition, requires arbitration as the modes of dispute resolution. At this point, Seller has not shipped the widgets and Buyer has not paid for them. Which of the following statements best describes the legal state of affairs at this point under the CISG?

A. There is a contract, and Seller’s terms will control since the CISG follows the common law’s last shot doctrine
B. There is a contract, but Seller’s consequential damages disclaimer and arbitration clause will not become part of the contract since both terms would be considered by the CISG to be “material alterations” of Buyer’s offer
C. There is a contract, but whether Seller’s additional and different terms will control will depend on whether Buyer makes a timely objection to those terms
D. There is no contract, even though there would be one at this point if this case were not handled under UCC 2-207
E. There is no contract, just as there would be no contract if this case were handled under UCC 2-207

Answer 18

D

Question 19

Same facts 3 dozen widgets between two countries, except that after receiving Seller’s acknowledgement form, Buyer sends full payment in advance to Seller for the widgets without objecting to any of Seller’s terms in the acknowledgement form. Seller has not yet shipped the goods. Which of the following statements best describes the legal state of affairs at this point under the CISG?

A. There is no contract yet, because the Seller still has not shipped the goods and we need conduct by both sides in order to have a contract here under the CISG
B. There is a contract, and Buyer’s terms will control since Buyer’s payment was the last shot in this battle of forms and conduct
C. There is a contract, and Seller’s terms will control since Seller’s acknowledgement form constituted an acceptance of Buyer’s offer that will bind Buyer as to any additional or different terms that appeared in Seller’s form
D. There is a contract, and whether Seller’s terms will control will depend on whether Buyer objects to Seller’s additional and different terms prior to Seller shipping the goods to Buyer
E. There is a contract, but not for the reasons given in either C or D

Answer 19

E

Question 20

Residential Home Buyer and Home Seller enter into a standard written home sales agreement for a price of 200,000. The sales contract includes a home inspection clause that reads as follows: “This agreement is conditional upon the inspection of the property (as long as such inspection takes place within 14 days of this contract’s signing) by a home inspector of the purchaser’s choice and expense, and receipt of a report satisfactory to him or her, in his or her sole and absolute discretion.” Buyer immediately hires Home Inspector, who inspects the home within the specified time frame and prepares a report that indicates that the house’s roof needs replacing. Buyer then learns that a new roof for this would cost 25,000. Which of the following statements accurately describes Buyer’s rights with respect to this contract after Buyer learns all of the above?

A. Buyer can require the Seller to replace the house’s roof and then complete the house sale for 200,000
B. Buyer can require the Seller to reduce the house’s sale price to 175,000 if Seller will not replace the roof
C. Both A and B
D. Buyer can require the Seller to repair the roof if Seller will neither replace the house’s roof nor lower the purchase price to reflect the faulty roof
E. Although Buyer cannot require Seller to replace the roof, Buyer can choose to avoid the contract if Seller refuses to replace the roof

Answer 20

E

Question 21

Merchant Buyer and Merchant Seller enter into a oral contract (with witnesses present) for the sale of six red widgets for 10,000 each, delivery to take place in two months. Tow days following that oral agreement, Buyer sends Seller a signed confirmation letter that constrains all of the terms of the oral agreement, including price and quantity, but says that the widgets are to be blue. Seller reads the confirmation letter two days after it is received and remembers that the oral agreement required red widgets. At this point in time, which of the following statements accurately describes the legal state of affairs?

A. Neither side can enforce the contract because of the Statute of Frauds
B. Seller can enforce the contract, but not Buyer
C. Buyer can enforce the contract, but not the Seller
D. Both sides can enforce the contract
E. Neither side can enforce the contract because the terms in Buyer’s confirmation are not completely correct

Answer 21

B

Question 22

Same facts as six red widgets question, except that two weeks after receiving Buyer’s signed confirmation, Seller sends Buyer a signed writing in which Seller says, “I object to your confirmation because the terms you included are not consistent with what we had talked about.” Buyer receives Seller’s signed writing and read its. At this point in time, which of the following statements accurately describes the legal state of affairs?

A. Neither side can enforce the contract because of the statute of frauds
B. Seller can enforce the contract, but not Buyer
C. Buyer can enforce the contract, but not Seller
D. Both sides can enforce the contract
E. Neither side can enforce the contract because following Seller’s written objection, it is clear that there was no meeting of the minds

Answer 22

D

Question 23

Same facts as six red widgets, except that Buyer’s written confirmation to Seller differs from the oral contract not only as to color (blue instead of red) but also as to number of widgets (two instead of six). As soon as Seller receives and read Buyer’s signed confirmation, Seller objects in writing to Buyer as to both the color and the quantity state in Buyer’s confirmation. Buyer immediately writes back that the oral contract was indeed for two blue widgets and not six red widgets. If seller wishes to enforce the oral contract at this point, on what terms can Seller enforce the contract?

A. For two blue widgets
B. For two red widgets
C. For six blue widgets
D. For six red widgets
E. Buyer cannot enforce this oral contract at all

Answer 23

B

Question 24

Merchant Buyer and Merchant Seller make and oral contract for the sale of an industrial-size drill press machine for use in Buyer’s manufacturing facility. The terms agreed upon in the oral contract include price, delivery terms, warranties, and a promise from Seller to Buyer that for two years Seller will service the machine at Buyer’s facility once each month for no extra charge. Prior to shipping the machine, Seller sends Buyer a signed written confirmation of their oral agreement for sale of the machine. The confirmation includes price, delivery terms, and warranties, but is silent on Seller’s oral promises to service the machine monthly for no extra charge. Buyer receives the confirmation and files it away without reading it. Seller ships the machine and Buyer pays for it. When Buyer asks Seller to come out and service the machine, Seller says that this was not part of their contract. In a lawsuit against Seller, will Buyer be allowed to introduce evidence of Seller’s promise to service the machine of no extra charge?

A. No, because that is the kind of term that if agreed upon would certainly have been included in Seller’s written confirmation
B. NO, unless a court determines that this is a consistent additional term
C. Yes, unless the confirmation contained a conspicuous merger clause
D. Yes, but only if this terms is a usage of trade in this industry
E. Yes, even if the confirmation did contain a conspicuous merger clause and even if this term is not a usage of trade in this industry

Answer 24

E

Question 25

Sane facts as industrial sized drill press with the oral agreement, except that instead of sending the signed confirmation, Seller has Buyer sign a written contract along with Seller that includes the very same terms that were in the confirmation described. Assume for this question that the written contract did not include a merger clause. In a lawsuit against Seller, will Buyer be allowed to introduce evidence of Seller’s promise to service the machine for no extra charge?

A. Yes, as long as a court determines that this is a consistent additional terms
B. Yes, but only if this is the kind of term that is agreed upon would certainty have been included in the written contract
C. Yes, but only if this term is a usage of trade in this industry
D. No, even if this term is a usage of trade in this industry
E. No, because this term was only an oral promise by Seller and therefore is unenforceable under the statue of frauds

Answer 25

A

Question 26

Same facts as industrial sized drill press with oral agreement, except that instead of sending the signed confirmation, Seller has Buyer sign a written contract along with Seller that includes the very same terms that were in the confirmation described. Assume for this question that in this industry, the custom is that seller will always provide tow years of free monthly servicing of the drill-press machine at no extra charge to the buyer. In a lawsuit against Seller, will Buyer be allowed to introduce evidence of Seller’s separate promise to service the machine for no extra charge (as distinct from introducing evidence of the relevant usage of trade to the same effect)?

A. Yes, and Buyer will also be able to introduce evidence of the relevant usage of trade to the same effect
B. Yes, but Buyer will not be able to introduce evidence of the relevant usage of trade to the same effect
C. No, but Buyer will at least be able to introduce evidence of the relevant usage of trade to the same effect
D. No, and nor will Buyer be able to introduce evidence of the relevant usage of trade to the same effect
E. yes, but only if Buyer is also allowed by the court to introduce evidence of the relevant usage of trade to the same effect

Answer 26

C

Question 27

Merchant Buyer and Merchant Seller agree orally to the sale of a dozen widgets at a price of 20,000 and with stated delivery terms. Buyer is located in Chicago, and seller is located in Montreal. Buyer and Seller agree orally that Illinois law and not the CISG will apply to their contract. After concluding the oral agreement, Buyer sends Seller a written and signed confirmation which repeats all of the terms of their oral contract, but states that the CISG will apply rather than Illinois law. Seller comes to you and says that he does not want to perform the contract unless Illinois law rather than the CISG will apply to the contract. Can Seller enforce the oral contract as originally agreed to, including the application of Illinois law?

A. No, because Illinois law would prohibit introduction of the parol evidence concerning the orally agreed-to choice of law provision
B. No, because the CISG would prohibit introduction of the parol evidence concerning the orally agreed-to choice of law provision
C. No, because Illinois law’s statute of frauds would require Seller to rely on the confirmation as its writing to satisfy the statue of frauds, and that confirmation says that CISG will apply
D. Yes, because neither the CISG’s nor Illinois’ parol evidence rule would bar introduction of that oral term on choice of law, nor would either law’s statute of frauds rule prohibit the enforcement of this oral contract by Seller
E. Both A and B

Answer 27

D

Question 28

Same facts as the sale of a dozen widgets at 20,000 with an issue with controlling law, except now assume that Seller has decided that he does not wish to perform the contract no matter which law will apply. Three weeks pass after Seller’s receives Buyer’s confirmation, but Seller fails to object to the terms of the confirmation. If Buyer wishes to enforce this oral contract and Seller denies its existence, will Buyer be able to enforce the contract?

A. No, because Buyer will not be able to satisfy Illinois law’s statue of frauds since Buyer lacks a writing signed by Seller
B. No, because Buyer will not be able to satisfy the CISG’s statue of Frauds since Buyer lacks a writing signed by Seller
C. Yes, because the CISG does not require the sales of goods contract to be in writing
D. Yes, because under Illinois law’s statue of frauds, Buyer will be able to satisfy the “merchant’s exception” under UCC 2-201(2) due to Seller’s lack of timely objection to Buyer’s written confirmation
E. Yes, for the reasons stated in both C and D

Answer 28

C

Question 29

Lessor and Lessee enter into a 5-year oral lease agreement of a residential house in which Lessee agrees to pay rent of 2,000 a month to occupy the house. The terms of this oral lease are that Lessee is responsible for all maintenance of the house during the course of the lease period, reflecting the below-market monthly lease payment of 2,000 for this house. Lessor also grants Lessee as part of this oral lease an option to purchase the house no sooner than 3 years into the lease and no later than by the end of the 5 year lease period. The purchase price of this oral option is an amount that is equal to the then fair-market value of the home (as determined by third party appraiser) minus the total of any lease payments made by Lessee up to that point. After four years of occupying the house, making lease payments, and maintaining the home, Lessee seeks to exercise the option to purchase. Lessor has changed his mind and denies ever having offered the purchase option as part of the oral lease agreement. Will Lessee likely prevail if Lessee seeks to enforce the purchase option?

A. No, because the common law statue of frauds would require Lessee get such a promise in writing in order to enforce it
B. No, because the common law parol evidence rule would prevent Lessee from introducing evidence of the purchase option
C. No, for both A and B
D. Yes, because in this case Lessee’s payments of 2,000 each month were in fact payments towards the purchase price and therefore constituted part performance of the purchase option
E. Yes, because in this case Lessee’s maintenance of the property was detrimental reliance that creates an exception to the common law statute of frauds

Answer 29

A