UCC Flashcards
Under the UCC Sales Article, which of the following conditions will prevent the formation of an enforceable sale of goods contract
Open Acceptance
oral modification is valid
If less than $500, no need writing
Under the UCC when a buyer orders (offers to buy) goods to be shipped by a seller, a seller can accept that offer by (1) shipment of conforming goods, (2) by a prompt promise to ship conforming goods, or (3) by the shipment of nonconforming goods without notice of accommodation.
If Ram had notified Handy that the shipment was sent only as an accommodation, the shipment would constitute a counter offer.
When do title and risk of loss for conforming goods pass to the buyer under a shipment contract covered by the Sales Article of the UCC?
When the goods are given to a common carrier.
On September 10, Bell Corp. entered into a contract to purchase 50 lamps from Glow Manufacturing to be used in Bell Corp’s executive company offices. Bell prepaid 40% of the purchase price. Glow became insolvent on September 19 before segregating, in its inventory, the lamps to be delivered to Bell. Bell will not be able to recover the lamps because
The lamps were not identified to the contract.
The contract required Union to ship the typewriters to Quick by common carrier, “F.O.B. Union Suppliers, Inc. Loading Dock.”
Which of the parties bears the risk of loss during shipment?
Quick, because the risk of loss passes when the typewriters are delivered to the carrier
Under the Sales Article of the UCC, which of the following events will release the buyer from all its obligations under a sales contract?
Refusal of the seller to give written assurance of performance when reasonably demanded by the buyer.
Under a contract governed by the UCC Sales Article, seller may be excused from performance if the goods are accidentally destroyed before the risk of loss passes to the buyer
If the goods were identified to the contract at the time of contract formation, and the goods are destroyed before risk of loss has passed to the buyer, if the loss is total the seller is excused form liability due to nonperformance.
Green pays ABC the purchase price and starts using the stationery. Green, two days later, on inspection discovers the delivered stationery is slightly below quality. Which of the following is correct?
Failure of Green to reject after inspection would constitute acceptance
Sky had completed a 200,000 unit run of parts similar to those under contract for Eagle and various other customers. Sky had not identified the parts to specific contracts. on June 1, Sky refused to deliver claiming the contract price was too low. Eagle was unable to cover in a reasonable time. Its production lines were in danger of shutdown because the parts were not delivered.
Eagle would probably
Have as its only remedy the right to recover dollar damages.
The remedies of replevin and specific performance are not available here because the units were not identified to the contract, nor are the units unique (200,000 run included units for various other customers).
Under the UCC Sales Article, an action for breach of the implied warranty of merchantability by a party who sustains personal injuries may be successful against the seller of the product only when
The seller is a merchant of the product involved.
implied warranty of merchantability can be disclaimed orally or in writing.
warranty arises as a matter of law when the seller ordinarily sells the goods purchased.
promissory note & CD is a promise made between only two parties
A draft is an instrument with three parties.
Under the Negotiable Instruments Article of the UCC, an instrument will be precluded from being negotiable if the instrument
Is made subject to another agreement.
Failure of a holder to give a general blank indorser proper notice of a maker’s dishonor of a note is a complete discharge of the indorser’s contract signature liability to the holder.
True
There are no time limits for presentment of a check
False
A seller and buyer enter into an international contract for the sale of goods involving a large amount of money. They agree to finance the sale by a letter of credit. Which of the following is correct?
Domestic letters of credit are revocable, but, unless agreed, international letters of credit are irrevocable.
Under a nonnegotiable bill of lading, a carrier who accepts goods for shipment must deliver the goods to
consignee of the bill of lading.
When a seller places goods with a common carrier for delivery, a bill of lading is issued which represents title to the goods and the right of the holder to take possession of the goods. The seller who is issued a bill of lading is the consignor and does not get the right to receive the shipment. That right goes to the consignee, the party to whom the carrier has promised to deliver the goods in the bill of lading.
Under the Documents of Title Article of the UCC, which of the following statements is(are) correct regarding a common carrier’s duty to deliver goods subject to a negotiable, bearer bill of lading?
I. The carrier may deliver the goods to any party designated by the holder of the bill of lading.
II. A carrier who, without court order, delivers goods to a party claiming the goods under a missing negotiable bill of lading is liable to any person injured by the misdelivery.
Both I and II.
Because, if the bill of lading is a bearer document, the carrier can deliver the goods to any holder of the document or to any person whom the holder designates to receive the goods. The holder, however, must surrender the document to the carrier. If the bill of lading is negotiable and the document is not surrendered, in this case it is missing, the carrier is liable for any misdelivery (to someone other than the legal holder of the document) to any person injured thereby.
Which of the following statements is correct concerning a bill of lading in the possession of Major Corp. that was issued by a common carrier and provides that the goods are to be delivered “to bearer”?
The bill of lading can be negotiated by Major by delivery alone and without endorsement.
To the extent that a holder of a negotiable promissory note is a holder in due course, the holder takes the note free of which of the following defenses?
Nonperformance of a condition precedent.
Under the Secured Transactions Article of the UCC, which of the following statements is correct regarding a security interest that has not attached?
It is not effective against either the debtor or third parties
For a security interest to attach, the following must be present:
Underlying debt/obligation;
Either a security agreement or possession of the collateral by the creditor; and
Debtor must have interest in the property
Jones lives in Oklahoma and is the owner of a large number of valuable antiques. Treasures Delight, located in Arkansas, is a seller of antiques. Treasures Delight is owned by Sally Delight. Delight offers to purchase all of the antiques owned by Jones paying 60% of the agreed price and, by agreement, signs a security agreement for the balance putting up her entire inventory as security. The security agreement provides for monthly payments. Which of the following is correct?
Although this is a purchase money security interest, Jones must file to have a perfected security interest in debtor’s state.
The antiques are classified as inventory (collateral to be held for resell). Thus, although a purchase money security interest was created, being inventory, a filing is required for perfection.
Under the Secured Transactions Article of the UCC, which of the following items can usually be excluded from a filed original financing statement?
The amount of the obligation secured
The location for filing a financing statement on fixtures is the same as perfection filing for inventory.
False
