Business Law: Text and Cases: Business Law: Text & Cases, Chapter 20 Flashcards


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1

Over the course of a year, Retail Marketers, Inc., sells goods from its inventory and one of its warehouses. In exchange, Retail receives checks and other items that substitute for cash, which Retail uses to repay a loan from Savings Bank. Article 2 of the UCC governs

a. ​the checks.

b. ​the payment of the loan.

c. ​the sale of the buildings.

d. ​the sale of the goods.

d. ​the sale of the goods.

2

Leslie pays Mobile Electronics $600 for a new phone. Under the UCC, this is

a. ​a merchant’s firm offer.

b. ​a lease.

c. ​a sale.

d. ​a requirements contract.

c. ​a sale.

3

Rally Corporation enters into a contract to sell ski gear to Sno-Sports Inc., which sells a pair of the skis to Tyra, a consumer, who later sells them to Upton, another consumer. Article 2 of the UCC applies to the sales transactions between

a. ​all of the buyers and sellers.

b. ​Rally and Sno-Sports only.

c. ​Sno-Sports and Tyra only.

d. ​Tyra and Upton only.

a. ​all of the buyers and sellers.

4

Josefina owns a condominium that she leases to Katrina. Josefina gives her daughter Lucia $450 on her sixteenth birthday. Josefina sells her car to her neighbor Maria for $1,500. UCC Article 2 covers

a. ​the lease with Katrina.

b. ​the gift to Lucia.

c. ​the sale to Maria.

d. ​all of the choices.

c. ​the sale to Maria.

5

Jacob offers to sell Bill a collection of baseball cards. For their transaction to be a sale under the UCC, Bill

a. ​must pay for the cards in cash.

b. ​must pay for the cards with services.

c. ​may pay for the cards with cash, goods, or services.

d. ​must pay the fair market value of the cards.

c. ​may pay for the cards with cash, goods, or services.

6

Sara and Tim enter into a contract for a sale of orchids. With respect to the specific contractual provisions set out in the UCC, these parties may

a. ​agree to different terms only to a reasonable extent.

b. ​agree to different terms unless they “get caught.”

c. ​agree to whatever terms they wish.

d. ​not agree to different terms.

c. ​agree to whatever terms they wish.

7

Medico Inc. enters into a contract to sell medical supplies to New Hospital Corporation, which sells some of the items to Physicians Clinic, which later sells them to Oscar, a patient and consumer. Article 2 of the UCC applies to the sales transactions between

a. ​all buyers and sellers.

b. ​Medico and New Hospital only.

c. ​New Hospital and Physicians Clinic only.

d. ​Physicians Clinic and Oscar only.

a. ​all buyers and sellers.

8

In a dispute over a sale involving a bicycle, Dain argues that as to this deal Ed’s Hobby Shop, where Dain bought the bike, is a merchant. A court may determine whether Ed’s is a merchant by assessing whether

a. ​it has sold any bikes within the last year.

b. ​it holds itself out by occupation as having knowledge or skill unique to the bike in the transaction.

c. ​its owner enjoys biking.

d. ​it subscribes to Bike, a biweekly trade magazine.

b. ​it holds itself out by occupation as having knowledge or skill unique to the bike in the transaction.

9

Stitches Corporation enters into a contract to sell denim clothing to Trend Fashion Company, which in turn sells the clothing to consumers. In contrast to standards that apply to consumers, the UCC imposes on merchants

a. ​less strict legal standards.

b. ​special business standards.

c. ​stricter ethical standards.

d. ​the same overall standards.

b. ​special business standards.

10

Ferris is refinishing his kitchen floor and needs a floor sander to complete the job. Ferris’s neighbor Gena suggests that he call Home Repair Rentals, Inc. Home Repair leases Ferris a floor sander. In this transaction, the lessor is

a. ​Ferris.

b. ​Gena.

c. ​Home Repair.

d. ​none of the parties.

c. ​Home Repair.

11

Brad buys a bulldozer from Construction Equipment Corporation, which he leases to Deep Digg, Inc. In this situation, the lessee is

a. ​Brad.

b. ​Construction Equipment Corporation.

c. ​Deep Digg, Inc.

d. ​none of the choices.

c. ​Deep Digg, Inc.

12

Manufacturing Corporation orders twelve safety videos from Productions, Inc., which delivers the videos. This is most likely

a. ​a gift.

b. ​a lease of goods.

c. ​a sale of goods.

d. ​a service contract.

c. ​a sale of goods.

13

Curt enters into a contract with Drivers Lease Company for a three-year lease of a car. This contract is subject to

a. ​none of the choices.

b. ​Article 2A of the UCC.

c. ​Article 11 of the CISG.

d. ​the common law only.

b. ​Article 2A of the UCC.

14

Marine Expeditions, Inc., pays Nate’s Boats $4,000 to use an oceangoing vessel for a month. For the purposes of the UCC, this is

a. ​a merchant’s firm offer.

b. ​an option contract.

c. ​a lease.

d. ​a sale.

c. ​a lease.

15

Omni Metals Company and Piecework Fabrication, Inc., enter into a contract under which Omni agrees to deliver a certain quantity of sheet metal to Piecework each month. The contract does not include a price term. In a suit between the parties over the price, a court will

a. determine a reasonable price at the time for delivery.

b. impose the lowest market price.

c. impose the highest market price.

d. return the parties to the positions they held before the contract.

a. determine a reasonable price at the time for delivery.

16

Car n’ Truck Body & Paint Company orders custom paint from Diverse Hues Inc., but Diverse does not deliver. Car n’ Truck will probably be unable to enforce the agreement if the parties omitted

a. ​a price term.

b. ​a delivery date.

c. ​a quantity term.

d. ​shipping arrangements.

c. ​a quantity term.

17

Refined Grains, Inc., agrees to sell to Sunny Cereal Company a certain quantity of refined oats each week but no mention is made of where the goods are to be delivered. In general, the UCC requires that the delivery take place at

a. a neutral place of business halfway between the parties’ locations.

b. ​a “reasonable” place of delivery.

c. ​Refined’s place of business.

d. ​Sunny’s place of business.

c. ​Refined’s place of business.

18

Brian, an agent for Clarion Motors, Inc., writes a letter on behalf of Clarion Motors to Dina on November 1 stating that he will sell her a 2016 Subaru Outback for $20,000 between November 1 and December 31. Brian’s letter to Dina is

a. a merchant’s firm offer.

b. an acceptance.

c. an option contract.

d. none of the choices.

a. a merchant’s firm offer.

19

Fresh Dairy, Inc., is the offeror and Gelato Ice Cream Company is the offeree under a unilateral sales contract in which Hector’s Helado Corporation is also interested. Gelato is not notified of Fresh Dairy’s performance within a reasonable time. Gelato

a. ​may treat the offer as having lapsed.

b. ​must assume that Fresh Dairy has started to perform.

c. ​must contact Fresh Dairy.

d. must notify Hector’s.​

a. ​may treat the offer as having lapsed.

20

County Dentists Clinic offers to buy from Dental & Medical Supplies Company a certain quantity of floss and other items for a certain price. Dental & Medical can accept the offer by

a. a material alteration of the terms within a reasonable time.

b. a prompt promise to ship or a prompt or current shipment of the goods.

c. any of the choices.

d. a shipment of nonconforming goods with a notice of accommodation.

b. a prompt promise to ship or a prompt or current shipment of the goods.

21

Talk, Inc., offers to buy from Ultra Corporation 1,000 smartphones. Without notifying Talk, Ultra timely ships phones of a different quality. With respect to the offer and a possible contract, this shipment is an acceptance and

a. ​a breach.

b. ​an accommodation.

c. ​complete performance.

d. ​a counteroffer.

a. ​a breach.

22

Containers, Inc., sends its standard order form to Distribution Corporation to evidence a sale of packing materials. Distribution responds with its own standard purchase order form. Additional terms in the purchase order automatically become part of the contract unless

a. ​the terms materially alter the original contract.

b. ​the original offer expressly required acceptance of its terms.

c. ​the offeror objects to the new terms within a reasonable time.

d. ​any of the choices.

d. ​any of the choices.

23

Rice River Farms offers to sell Sensei Sushi Restaurants, Inc., five hundred bushels of rice. Sensei responds, “We agree to buy five hundred bushels only if the rice is Grade A quality.” This statement is

a. ​a breach.

b. ​a counteroffer.

c. ​a confirmation.

d. ​an acceptance.

b. ​a counteroffer.

24

Downtown Contractors LLC and Equipment Rental Corporation are parties to an oral agreement for a one-year lease of a crane with payments totaling more than $10,000. They may satisfy the Statute of Frauds by

a. ​mutually agreeing not to commit fraud.

b. ​repeating the terms in a phone call.

c. ​setting out the terms in a memo.

d. ​shaking hands on the deal.

c. ​setting out the terms in a memo.

25

Great Harvest Farms offers to sell Hearty Bakeries, Inc., fifty bushels of wheat. Hearty’s representative Ilene responds, “We agree to buy fifty bushels only if the wheat is Grade A quality.” Between Great Harvest and Hearty Bakeries

a. ​a contract is formed.

b. ​a contract is formed only if Great Harvest can deliver the wheat fast.

c. ​Ilene’s statement is not an acceptance.

d. ​Ilene’s statement is an acceptance.

c. ​Ilene’s statement is not an acceptance.

26

Coffee Roasters, Inc., sells whole bean and ground coffee to Delicioso Deli under an existing contract. When the cost of coffee beans increases, Delicioso agrees to a price increase, but later wants to cancel the contract. Delicioso may

a. ​cancel the contract immediately.

b. ​cancel the contract only after accepting a final shipment.

c. ​cancel the contract only on reasonable notice.

d. ​not cancel the contract.

d. ​not cancel the contract.

27

Quinn enters into a series of agreements with Reba involving a sale of a Suite Dreams Motel, including the land, building, furnishings, shares of stock in Suite Dreams Company, and a contract with Trudy to create an ad campaign. Reba suspects that Quinn may be misrepresenting the facts. The UCC Statute of Frauds governs

a. ​the sale of any of the property evidenced by a writing.

b. ​the entire deal, including the marketer’s services.

c. ​the sale of the furnishings priced at $500 or more.

d. ​the sale of the land and the building.

c. ​the sale of the furnishings priced at $500 or more.

28

Jack sells a grand piano to Kyle for $5,000 and a gold ring to Lauren for $999. A writing is required to enforce the sale of

a. ​the piano only.

b. ​the piano and the gold ring.

c. ​neither the piano nor the gold ring.

d. ​the gold ring only.

b. ​the piano and the gold ring.

29

Raul agrees to ship to Ben one hundred ceiling fans for $5,000. Raul initials his notes of the deal, which include the terms, and files the notes in his office. Ben initials his own notes of the deal, which include the terms, and files the notes in his office. Raul fails to ship the fans. Against Raul, as a contract, the deal is​

a. ​enforceable, because under the UCC a contract need not written.

b. ​enforceable, because Raul’s initialed notes are a sufficient writing.

c. ​enforceable, because Ben’s initialed notes are a sufficient writing.

d. ​not enforceable.

b. ​enforceable, because Raul’s initialed notes are a sufficient writing.

30

Farmers Produce, Inc., and Growers Market enter into a contract for the delivery of locally grown fruits and vegetables. The parties use a standard Farmers Produce form that contains some of the terms the parties agree on but not others. Some of the produce spoils before it can be cooked, served, and eaten, or sold. Growers Market refuses to pay for the spoiled goods.

Refer to Fact Pattern 20-1. Farmers Produce responds that it did not waive payment for spoiled goods in the parties’ previous transaction. Farmers Produce is arguing that the court should take into account

a. ​the course of dealing.

b. ​the course of performance.

c. ​the usage of trade.

d. ​none of the choices.

a. ​the course of dealing.

31

Farmers Produce, Inc., and Growers Market enter into a contract for the delivery of locally grown fruits and vegetables. The parties use a standard Farmers Produce form that contains some of the terms the parties agree on but not others. Some of the produce spoils before it can be cooked, served, and eaten, or sold. Growers Market refuses to pay for the spoiled goods.

Refer to Fact Pattern 20-1. Farmers Produce files a suit against Growers Market, claiming that the buyer assumed the risk of the spoilage of the unsold goods. The court may allow evidence of this term if it finds that the parties’ contract is

a. ​fully integrated.

b. ​not fully integrated.

c. ​none of the choices.

d. ​a complete and final statement of their agreement.

b. ​not fully integrated.

32

Farmers Produce, Inc., and Growers Market enter into a contract for the delivery of locally grown fruits and vegetables. The parties use a standard Farmers Produce form that contains some of the terms the parties agree on but not others. Some of the produce spoils before it can be cooked, served, and eaten, or sold. Growers Market refuses to pay for the spoiled goods.

Refer to Fact Pattern 20-1. Growers Market contends that the practice in the trade with respect to payment for spoiled produce justifies its refusal to pay. Growers Market is arguing that the court should take into account

a. ​the course of dealing.

b. ​the course of performance.

c. ​the usage of trade.

d. ​none of the choices.

c. ​the usage of trade.

33

Swift Trucking, Inc., and Trailer Rents Corporation are parties to an oral agreement for a one-year lease of six doublewides with payments totaling more than $40,000. They may satisfy the Statute of Frauds by

a. ​mutually agreeing not to commit fraud.

b. ​repeating the terms in a phone call.

c. ​setting out the terms in a memo.

d. ​shaking hands on the deal.

c. ​setting out the terms in a memo.

34

Global Outfitters Outlet and Holly, a consumer, enter into a contract for a sale of camping gear. If the contract includes a clause that is perceived as grossly unfair to Holly, its enforcement may be challenged under

a. ​the mirror image rule.

b. ​the principle of fair trade.

c. ​the predominant-factor test.

d. ​the doctrine of unconscionability.

d. ​the doctrine of unconscionability.

35

Toro, S.A., which is based in Mexico, enters into a contract for the purchase of portable livestock fencing from United Fencing Company, which is based in the United States. This contract is governed by

a. ​Mexican law.

b. ​the provisions in the laws of both countries that are similar.

c. ​the Uniform Commercial Code.

d. ​the United Nations Convention on Contracts for the International Sale of Goods.

d. ​the United Nations Convention on Contracts for the International Sale of Goods.