UCC Sales Contract

Question 1

An express warranty can be created by

Answer 1

affirmation, promise, description, sample, or model. An express warranty is usually created by written or oral communication and becomes part of the sales contract.

Question 2

Implied warranty of fitness for a particular purpose

Answer 2

usually relies on a seller’s expertise and is implied by law

Question 3

Title passes from the seller to the buyer only if

Answer 3

the goods are identified in the sales contract

Question 4

In a situation where the seller does not comply with the provision of a contract

Answer 4

the buyer has several remedies, including the right to obtain specific performance

Question 5

Replevin

Answer 5

is a creditor’s right to recover secured property

Question 6

what is the most important factor in determining which of the two parties bears the risk of loss

Answer 6

“shipment terms” (such as “FOB shipping point”)

Question 7

The U.C.C. stipulates that a seller is under an obligation to

Answer 7

“put and hold conforming goods at the buyer’s disposition and give the buyer any notification reasonably necessary to enable him to take delivery.”

Question 8

Where the sales contract is C.O.D. (cash on delivery), the buyer

Answer 8

has The right to reject nonconforming goods

Question 9

Under the U.C.C. Sales Article, the warranty of title may be excluded by

Answer 9

the seller’s statement that it is selling only such right or title that it has

Question 10

“Sales on approval” under Article 2 of the U.C.C

Answer 10

allows the buyer a trial period in which to sample, temporarily use, and inspect the goods

Question 11

An output contract

Answer 11

is where the buyer agrees to buy (and the seller agrees to sell) all of the output or production

Question 12

The common law requires that the insurable interest in property

Answer 12

exist at the time the loss occurs.

Question 13

“With reserve” means

Answer 13

the auctioneer can actually withdraw the item at any time before the gavel falls, or via an announcement to that effect

Question 14

“without reserve” means

Answer 14

the goods cannot be withdrawn and must be sold to the highest bidder (notice this accordingly requires an actual bid)

Question 15

Under Article 2 of the Uniform Commercial Code, when either the seller or the buyer has reasonable grounds for insecurity with regards to the performance of the contract that party may demand an “adequate assurance of performance.” Failure of the other party to provide such an assurance

Answer 15

within a reasonable time (not exceeding 30 days) constitutes a repudiation of the contract, and releases the other party from his or her obligations under the contract

Question 16

If there is a warehouse receipt, the risk of loss passes

Answer 16

when the buyer receives this receipt. See UCC 2-509(2)

Question 17

Risk of loss difference between merchant and non merchant

Answer 17

Non Merchant - risk of loss passes to the buyer upon tender of delivery

Merchant -

Question 18

A buyer has an insurable interest

Answer 18

from the time the goods are identified in the contract.