Commercial Law

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1. The Uniform Commercial Code would be applied in which of the following situations?

d. A contract to buy living room furniture

2. Lee has been declared incompetent by the court and is under the care of his sister. Without his sister's knowledge, Lee rents the 30,000-seat civic center for his birthday party. Lee's contract to rent the civic center is best described as a:

c. void contract.

3. A contract in which both parties exchange promises is a:

b. bilateral contract.

4. Article 2 of the Uniform Commercial Code deals with what type of property?

b. Personal

5. Steven intentionally makes a material misrepresentation of fact regarding his motorcycle to Thelma who agrees to buy the motorcycle based upon the misrepresentation. This contract is:

b. voidable.

6. Which of the following contracts is covered by Article 2 of the Uniform Commercial Code?

b. The sale of a new car

7. A person who makes a promise is a(n):

a. promisor.

8. Sarah offers to pay Allison $150 if Allison will paint her apartment while she is out of town on vacation for two weeks. Allison makes no promise but tells Sarah that she will think about it. While Sarah is out of town, Allison paints the apartment. This is best described as a(n):

a. unilateral contract.

9. Which of the following is not generally required in order to have a valid contract?

c. Fairness of the bargain

10. Ken promises not to foreclose on a mortgage that he holds on an office complex that Christopher owns. In reliance on this promise, Christopher expends $200,000 to remodel the complex. Which of the following is correct with regard to Ken's promise?

c. Ken's promise will be enforced against him based upon the doctrine of promissory estoppel.

11. Contract law:

c. today usually recognizes contractual obligations whenever the parties manifest an intent to be bound.

13. Any property other than an interest in real property is:

b. personal property.

14. Promissory estoppel is a contractual doctrine that includes the following considerations:

a. The courts use the doctrine of promissory estoppel to enforce noncontractual promises.
b. Under this doctrine the promisor reasonably expects that the promisee, in reliance on the promise, will be induced by the nature of the promise to take action or refrain from taking action and the promisee does so.
d. Both (a) and (b).

15. Brian makes a material misrepresentation of fact regarding his horse to Rosalind while out riding one day. Later that day, Rosalind makes an offer to buy the horse. Brain accepts without correcting his earlier misrepresentation of fact.

b. Rosalind may avoid the contract.

16. According to the UCC, an enforceable agreement involving the transfer of title of goods from a seller to a buyer for a price is called a(n):

d. sale.

17. Contracts that are implied in law:

a. are obligations imposed by law on grounds of justice and equity.
b. are intended to prevent unjust enrichment.
c. do not rest upon the assent of the contracting parties.
d. All of the above.

18. Express contracts and implied contracts are:

a. both genuine contracts.
b. equally enforceable.
d. Both (a) and (b).

19. A(n) ____ contract is one in which the parties have manifested their agreement by oral or written language, or both.

a. express

20. Abe is involved in an automobile accident and is injured. While he is unconscious, the police call an ambulance which takes him to

a hospital. Abe is treated at the hospital and released a day later. The hospital sends him a bill for $2,400, which Abe refuses to pay, claiming it is too high and he never consented to the treatment because he was unconscious.
b. This is a quasi-contractual agreement.

21. A valid contract may be unenforceable for which reason(s)?

b. Running of the Statute of Limitations

22. Anna by mistake delivers to Bob a plain, unaddressed envelope containing $50 intended for Cora.

c. Bob's obligation to return the money is quasi contractual.

23. An agreement of a seller to supply a buyer with all of the buyer's requirements for certain goods is known as:

b. a requirements contract.

24. An offer under Article 2 of the UCC that is irrevocable even though no consideration is given to keep it open is known as a(n):

b. firm offer.

25. Maxine offered to sell her video camera to Tom for $200 and also stated to Tom, "I will give you two weeks to accept my offer." One week later Tom learned that Maxine had sold the video camera to Cindy.

a. Maxine has revoked her offer to Tom.

26. Alice offers to sell her computer, monitor, and printer to Bradley for $300. Bradley says he will accept provided that Alice includes her word processing software. What is the status of their discussions?

b. There is no contract, because Bradley has made a counteroffer.

27. A ____ is an offeree's refusal to accept an offer.

c. rejection

28. Wes, who is an art collector, offered to buy a print from Le Monde Gallery. Le Monde balked at the price, sending Wes a letter of rejection. That day it discovered that the print was not as highly valued as originally thought. Le Monde immediately telephoned Wes to accept his offer. Is there a contract?

a. Yes, since the acceptance was received before the rejection

29. Gail sent a letter of acceptance to an offer that has expired. Gail has made:

d. an offer.

30. An ad in a newspaper or a circular describing goods and stating prices would generally be considered a(n):

d. invitation to buyers to make an offer to buy goods.

31. The UCC provides that a merchant is bound to keep a written offer open for a stated period but no longer than:

c. three months.

32. Lynn offers to sell his house to Dennis for $95,000. Dennis responds, "I will pay you $95,000 if you will paint the second floor." This response could best be described as:

b. a counteroffer.

33. Assume an offeree mails a rejection to the offeror on November 1. This rejection arrives at the offeror's place of business on November 5. In the meantime, on November 4, the offeree sends the offeror an acceptance that arrives November 6. Which of the following statements correctly describes the situation?

a. There was no contract because when an acceptance follows a prior rejection, the first communication to be received by the offeror is the effective one.

34. The way parties usually show mutual assent is by:

a. an offer by words or conduct and an acceptance by words or conduct.

35. Leonard offers to sell his diamond ring to Emily. Diane overhears the offer and says, "I accept the offer."

a. Diane cannot accept the offer, because it wasn't made to her.

36. Jack has been in the business of selling carpeting for 20 years. He calls Bob, who is opening another branch of his furniture stores, and offers to sell him 100 yards of carpet at $20 per yard. Bob agrees and sends back the following letter confirming the deal:
Dear Jack:
As we discussed on the phone January 3, we accept your offer of 100 yards of Saxony "heather blue" carpeting at the price of $20 per yard. We also reserve the right to purchase any additional yardage we need to carpet our other showroom facilities at the same rate for one year from that date.
Very truly yours,
Bob
Which of the following is true?

c. There is no contract since Bob made a counteroffer.

37. Which of the following would NOT be a merchant under Article 2 of the UCC?

c. A person who inherits three speedboats and wants to sell them to buy a car

38. Which of the following would most probably be considered a valid offer?

d. "$100 reward for return of lost white-gold, men's wedding band inscribed with initials 'TEA' to Tony Adams, 350 Main Street, Peoria."

39. Eliza was an antique expert. She went to a tea party at Grandma Jones' house and saw a magnificent Queen Anne table out on the back porch. She asked Grandma about it and was told it was in the way so they were going to store it in the barn. Eliza offered to buy it from her for $200. The next week, Grandma saw it in Eliza's store on sale for $3,000. Which of the following is true?

c. She cannot rescind the contract because Eliza did not have a duty to tell her the value of the table.

40. Which of the following results in a void, rather than voidable, agreement?

b. Fraud in the execution

41. Tom tries to sell his classic car to Victoria for $12,000. Tom tells Victoria, "I paid $12,000 for the car in 1978 and it's worth twice that today." Tom really paid $8,000 for the car in 1978. If Victoria buys the car, basing her decision on Tom's statement, which of the following correctly states the situation?

c. Tom's statements are actionable only if intentional.

42. A fiduciary is a:

b. person who owes a duty of trust, confidence, and loyalty to another.

43. When both parties misunderstand the same set of facts relating to a basic assumption on which a contract is made, it is termed:

d. mutual mistake.

44. Which of the following is NOT an element of fraud?

b. Competent parties

45. If untrue, which of the following would probably be considered a misrepresentation of a material fact?

c. "This car has new brakes."

46. A misrepresentation is material if:

a. it would likely induce a reasonable person to enter into a transaction.
b. the maker knows it would likely induce the other party to enter into the transaction.
d. Both (a) and (b).

47. Albert found a stone in his yard and took it to Bob, a jeweler, for evaluation. Although Bob knew what the stone was, he told Albert that he wasn't sure as to the nature of the stone, but that he thought it was a topaz. Bob then offered to buy the stone for $25 and Albert agreed. Later Albert found out the stone was an uncut diamond worth about $700.

c. This contract can be voided based upon fraud in the inducement.

48. Fred is a concert violinist who is scheduled to perform at Carnegie Hall for the first time. He buys what he is told is a Stradivarius violin from a well-known, reputable dealer in quality violins, and he pays the going rate for a Stradivarius. He later learns the violin is an imitation, although it is such a good imitation that even the dealer thought it was authentic.

c. The sale is voidable by the purchaser for mutual mistake.

49. Aunt Ellie promises her 21-year-old nephew, Robbie, that she will pay him $100 if he quits smoking for a month. If Robbie does, is there a binding contract?

d. Yes, because Robbie gave up a legal right

50. Janet promises Eli $4,000 for one of his original paintings on the condition that she receive $1 million from her mother's will.

b. Janet's promise is legally sufficient unless Janet knew at the time she made the promise that she could not inherit the $1 million.

51. Mary agrees to sew Georgia's prom dress for $50 plus costs. Georgia decides that she wants ruffles around the neck and calls Mary who says it will now cost $60. When Mary finishes the dress (with ruffles), Georgia must pay:

c. $60, since the modified agreement is supported by additional consideration.

52. Wayne helped Hank study all night for an important exam. After Hank got an A on the exam, he told Wayne, "I will give you $10 for helping me get a good grade." Wayne said, "Thanks, I'll take it."

d. There is a contract with sufficient consideration.

53. A purchaser's agreement to buy from a particular seller all the materials of a particular kind he needs is a(n) ____ contract.

b. requirements

54. A bank robbery has occurred, and the banker's association has offered a $1,000 reward for information leading to the arrest and conviction of the robber. Several people are claiming to be entitled to the money. Which of them is eligible?

c. An off-duty deputy sheriff from a county other than the one where the arrest occurred

55. William agrees to drill a well up to 200 feet deep for John's rural cabin. The contract price is $3,000. After drilling 100 feet, William strikes solid granite rock. He talks to John and explains that this is highly unusual for the area and could not have been anticipated at the time of entering into the contract. He offers to get a special drill, but says it will cost him more money, so that he will be unable to complete the project for the agreed price. Because John is anxious to have the well, he agrees to pay William an additional $1,000 to complete the job. However, once the well is finished, he changes his mind and now says he will pay only the originally agreed-upon amount.

a. The parties have agreed to a substitute contract which discharges the original contract. John is obligated to pay the additional $1,000.

56. Barbara, a wealthy widow, promises the pastor of her church that she will donate $20,000 to the church to help pay off its mortgage if the stewardship committee can obtain enough pledges for the balance of the $80,000 mortgage. Other pledges are obtained to pay off the mortgage, but now Barbara has changed her mind and plans to take an around-the-world cruise instead.

a. The doctrine of promissory estoppel can be applied to this case.
c. Under the Restatement, Barbara's promise is enforceable.
d. Both (a) and (c).

57. Tyler contracts to build a garage for Wilbur for a price of $6,000. Because of an increase in the cost of labor and materials, Tyler refuses to perform. Wilbur wants the garage, so he agrees to pay an additional $500.

b. Tyler has given no additional consideration, and under the common law must perform at the agreed upon original price.

58. The requirement of legally sufficient consideration:

d. is the same as the requirement of adequacy of consideration.

59. Claudia sells her highly successful hair salon to Carl. In the sales contract, Claudia agrees never to open a hair salon in the state. Which of the following best describes this contract clause?

c. An unenforceable restraint of trade contrary to public policy

60. Which of the following is true with regard to an exculpatory clause?

a. An exculpatory clause excuses one party from liability for her own tortious conduct.
b. Where one party has a superior bargaining position that has enabled him to impose an exculpatory clause upon the other, the courts are inclined to nullify the provision.
c. An exculpatory clause may be unenforceable for unconscionability.
d. All of the above are true.

61. A(n) ____ is a measure designed to protect the public from unqualified practitioners.

c. regulatory license

62. John operates a small repair business and is in desperate need of a certain type of building material. He obtains the material from a large corporation, but is charged a grossly unreasonable price and is forced to buy other material he does not need. In view of the buyer's unequal bargaining power and unreasonable terms of the contract, this may be a case of:

c. substantive unconscionability.

63. Andrew owns a store in Polk County. His trade extends throughout River City, but not beyond the county limits. He sells his store to Betty and, as part of the transaction, agrees not to engage in the same business anywhere in River City for a period of five years.

a. The geographic restraint is reasonable.

64. Sarah is working hard on the mayoral campaign of Timothy. She thinks that just a few more votes could win the election, so she promises to pay her friend Violet $50 to register and vote. Violet does so, but Timothy loses the election, and Sarah now refuses to pay.

b. This agreement is unenforceable and opposed to public policy.

65. Which of the following is correct with regard to an enforceable restraint of trade?

a. The restraint should be no more extensive than is required to protect a specified property interest.
b. Restraints typically arise in connection with the sale of a business.
c. A typical restraint is a covenant not to compete.
d. All of the above.

66. Which of the following would be considered a valid and legally enforceable agreement?

d. An agreement by a car salesman not to sell automobiles or automobile parts in Marin County for a period of one year after terminating his employment

67. Todd, a minor, rents an automobile from Rosa, an adult. Todd damages the vehicle when he negligently backs into a pole. Under the majority view, can Rosa recover damages from Todd?

d. No, his contractual immunity protects him from legal action by Rosa.

68. Randy, a minor, buys a new four-wheel drive truck from the Jones Dealership. Randy sells this truck to his cousin, Steve, who is an adult. Steve conveys this vehicle to Arthur Smith. Arthur does not personally know Steve or Randy. Which of the following expresses the status of this situation?

b. Randy may not recover the vehicle from Mr. Smith.

69. Which of the following is not true regarding the contracts of intoxicated persons?

c. Slight intoxication will destroy one's contractual capacity.

70. In which of the following situations would a minor be unable to disaffirm a contract which he had made?

b. Where the minor wishes to affirm part of a contract and disaffirm another part of the same contract

71. Percy, age 17, purchased a used mobile home from a mobile home dealer for $20,000. This price, however, was twice the reasonable value of the mobile home. One month later, Percy wishes to disaffirm the contract. If the mobile home is considered a necessary, then:

c. Percy may keep the mobile home but is only liable for the reasonable value of the mobile home.

72. Cheryl, age 16, ordered a new dress to wear to the school prom. She has contracted to pay $500 when the dress arrives. Before the dress arrives, Cheryl decides that the dress is too expensive and now wishes to cancel the order.

c. Cheryl may disaffirm this executory contract.

73. Donald, a minor, makes a contract with Albert, an adult, to buy a computer. One week later, Donald has his eighteenth birthday and shortly thereafter tells Albert he will pick up the computer next week.

a. Donald has expressly ratified the contract.

74. A contract by which of the following is void?

b. A thirty-six-year-old man under a court-ordered guardianship for mental incompetency.

75. In most states, whether the time within which a minor disaffirms a contract constitutes a reasonable time is determined by:

c. the facts and circumstances of the case.

76. Which of the following promises does not have to be evidenced by writing in order to be enforceable?

d. Mindy's agreement with Susan to buy her bike for $400

77. Which of the following is an exception to the suretyship provision requirement under the statute of frauds?

b. A promise, the leading object of which is to obtain an economic benefit for oneself

78. Under the UCC, ____ refers to the manner and extent to which the respective parties to a contract have accepted successive tenders of performance by the other party without objection.

c. course of performance

79. Under the UCC, a(n) ____ is a practice or method of dealing, regularly observed and followed in a place or vocation or trade

b. usage of trade

80. In determining the meaning of a contract under the UCC, which of the following will have first priority?

d. Express terms

81. Which of the following would NOT require a writing under the statute of frauds?

d. Where a landscaper agrees to landscape the lot surrounding an office building

82. Which of the following need NOT be contained in a memorandum, which satisfies the general statute of frauds writing requirement?

c. The signature of the party suing

83. On March 1, Sara, a student, received a telephone call from ComputerChip, Inc. offering her a job for one year beginning on June 15, after completion of the school year. According to the personnel manager, she will have to move to California and be ready to start work at 8:00 a.m. on June 15. Should Sara ask for a letter confirming the telephone conversation if she accepts the offer immediately?

c. Yes, because the job offer is for longer than one year from March 1

84. Barry's Sport Shop calls Champs Tee Shirt Company to order 200 designer tee shirts at $2 per shirt. The next day, Barry decides he can easily sell 100 more. Before the order is filled, he calls to change the order to 300 tee shirts. Champs sends 200. Can Barry force Champs to send the additional 100?

b. No, because Barry does not have a writing signed by Champs Tee Shirts

85. Which of the following is untrue with regard to the interpretation of contracts?

b. Technical terms will always be given technical meaning even where a different intent is manifested by the parties.

86. The parol evidence rule does not apply to:

d.The parol evidence rule applies to both (a) and (b).

87. A contract contains a provision that states it will be effective for a "year." The plaintiff in a lawsuit claims that a "year" is obviously 12 months. The defendant claims that the contract meant a 10-month school year.

c. The term "year" in the contract is ambiguous, and the parties can bring in parol evidence to clarify their intent.

88. A(n) ____ is an intended beneficiary of a contract who receives the benefits of the contract as a gift.

d. donee beneficiary

89. Anita owes Brad $75,000. Brad signs a written statement granting Glen a gratuitous assignment of his rights from Anita. Brad delivers the signed statement to Glen before Brad dies.

a. The delivery of the statement makes the assignment irrevocable.

90. Which of the following duties would not be delegable?

d. Arthur has a duty to teach an accounting class at a community college during the fall semester.

91. Professor Dought has a life insurance policy on his own life that provides that in the event of his death, his mother will receive the proceeds. Professor Dought's mother is a(n):

c. donee beneficiary.

92. Bill wants to buy a new car. He goes to the bank to get a loan for the purchase, and signs an agreement to pay $10.00 per month in premiums on a term life insurance policy which names the bank as the recipient of the policy proceeds in the event of his death before the loan is repaid. The bank is a(n):

b. creditor beneficiary.

93. Courts will enforce contracts for the benefit of all but which of the following?

c. Incidental beneficiaries

94. Stark enters into a contract with a contractor to build a large shopping mall in River City. Donner will benefit from this contract since his restaurant is adjacent to the planned mall. Donner in this instance is a(n):

d. incidental beneficiary.

95. Mr. Homayer hired Blake Painters to paint his house. Blake decides it has too many jobs and delegates the duties to the Andrews Company. Andrews does a poor job, and drips paint on the Homayers' flowers and windows.

a. Mr. Homayer can sue both Blake and Andrews.

96. Brice owns a parcel of land that is encumbered by a mortgage held by the First National Bank. Brice agrees to sell the land to Paul for $50,000. Brice and Paul together go to the First National Bank to discuss the sale and purchase with the banker. Brice, Paul, and the banker sign an agreement stating that Paul will assume the mortgage and that Brice will be discharged from all further liability on the mortgage.

d. The agreement among the three is a novation.

97. Odessa owes Kevin $2,000. On July 1, Kevin assigns the right to the $2,000 to Troy. Thereafter, on July 15, Kevin assigns the same right to Donna, who in good faith gives value for it and knows nothing about the first assignee.

d. The rule differs in different states. Depending on which rule a state follows, the answer will vary.

98. Under Section 2-210 of the Code, unless circumstances indicate to the contrary, a contract that prohibits an assignment:

b. prohibits only a delegation of the delegator's duty of performance and not the assignment of rights.

99. Notice of an assignment:

b. cuts off any defenses based on subsequent agreements between the obligor and assignor.
c. precludes subsequent setoffs and counterclaims of the obligor that arise out of entirely separate matters.
e. Only (b) and (c).

100. A contract contains the provision, "Walter Hamilton promises to pay Faye Weeks $1,200 for a 2003 V-6 motor provided that Phelps' Garage approves the quality of the motor." This provision:

b. creates an express condition which must be met before Walter's duty to pay arises.

101. A(n) ____ is a substituted contract that involves an agreement among three parties to substitute a new promisee in place of an existing promisee, or to replace an existing promisor with a new one.

c. novation

102. A(n) ____ is a contract between a promisee and a promisor by which the promisee agrees to accept and the promisor agrees to render a substituted performance in satisfaction of an existing contractual duty.

a. accord

103. Bill recently borrowed $50 from Ricardo for a couple of weeks. Bill, still short of cash, tells Ricardo, "I will wash and wax your car in exchange for the $50 I owe you." Ricardo tells Bill, "OK, that's great!" Ricardo's performance of his new duty will be a(n):

d. satisfaction.

104. On November 1, Paula and Roberta enter into a contract where both parties are obligated to perform on December 31. On December 1, Paula tells Roberta, "I can, in no way, perform my duties in our contract." This statement is a(n):

b. anticipatory repudiation.

105. Unless one of the parties contractually assumes the risk, the ____ discharges a contract if supervening circumstances make fulfillment of the purpose which both parties had in mind impossible.

b. frustration of purpose doctrine

106. Refusal of a tender of performance by one party to a bilateral contract will:

a. be treated as a repudiation, excusing the tendering party from further duty of performance under the contract.

107. Fred contracts to sell a certain tract of land to Maria for $20,000, but the contract is silent as to the time of delivery of the deed and payment of the price.

c. The payment of the $20,000 and the delivery of the deed are mutually dependent and, in the absence of an agreement to the contrary, are concurrent conditions.

108. Phil, the tax accountant, promises to do Marge's individual federal, state, local, and gift taxes for the year. He completes all but the gift taxes. Under the substantial performance doctrine:

c. Marge will have to pay Phil for all but the gift taxes.

109. Henry hires Ace Roofing to put a new roof on his house. When Ace comes, Henry refuses to let them on the roof, saying that he has a headache and doesn't want to listen to pounding. The next day, Henry still has a headache and he refuses to allow them on the roof. The day after, the baby is sleeping and Henry refuses to allow them to work. After four weeks of this, Ace:

a. may be discharged, but Henry is not.

110. Jim contracted with Kevin to serve as a guide for Kevin on his three-week fishing trip to Canada. The contract was made on April 1 with the trip to begin on June 1. On May 1, Kevin notified Jim that he had changed his mind and would be unable to make the trip. He also refused to pay Jim any compensation.

b. Kevin has anticipatorily repudiated the contract and is liable to Jim for damages.
c. Jim is discharged from his duty to serve as guide, and he may bring suit immediately against Kevin.
d. Both (b) and (c) above are correct.

111. Miller has a contract to sell 1,000 bushels of wheat to a bakery. The wheat is stored in a grain elevator and has become infested with insects. What is the consequence?

c. Miller is not discharged, but must substitute wheat or pay damages to the bakery for breach of contract.

112. If Jana, a minor, transfers property to Scott and Scott sells the property to a good faith purchaser for value before Jana avoids the transfer:

a. Jana loses the right to recover the property if the transfer involved goods.

113. Miller made a contract to sell his condominium to Jefferson for $80,000. Two days later Miller changed his mind after discovering that he could have sold the property to another buyer for an additional $20,000. Jefferson sues and asks the court to have the property conveyed to him at the price of $80,000. Jefferson is seeking:

c. specific performance.

114. The return to the aggrieved party of the consideration, or its value, which he gave to the other party is:

b. restitution.

115. The process whereby a court "rewrites" or "corrects" a written contract to make it conform to the true intentions of the parties is:

b. reformation.

116. Equitable remedies will not be granted where:

d. the contract is tainted with fraud, duress, undue influence, mistake, or unfair practices.

117. Damages for reliance include expenses for:

c. preparing to perform.

118. In the case of Hadley v. Baxendale, the plaintiff was seeking damages for:

b. lost profits.

119. Which of the following is correct with respect to election of remedies?

a. The Code rejects any doctrine of election of remedies; its remedies are cumulative.b. The remedy of specific performance is inconsistent with that of restitution.c. A person who seeks an injunction may also seek incidental damages for the breach.d. All of the above are correct.

120. In which of the following situations will a court grant specific performance?

a. In a case involving breach of contract for the sale of real property.c. Where goods are unique or rare.d. Both (a) and (c).

121. Contract damages that put the injured party in as good a position as if the other party had performed are:

a. compensatory damages.

122. A small damage amount fixed without regard to the amount of loss is known as:

c. nominal damages.

123. Harry said to Marge, "I have a ring once owned by Marilyn Monroe. Would you like to buy it for $500?" Marge pays for the ring, but the next day a friend tells her that Harry had recently purchased the ring at a local department store. Marge enjoys wearing the ring and wears it constantly for twelve months. Finally, she goes to Harry and says, "Here is the ring you lied about. Give me my $500." Most likely:

b. Marge will not get her money back since she should have investigated the facts about the ring more carefully.

124. Which of the following transactions is governed by Article 2 of the UCC?

d. A contract to receive medical services in a hospital

125. Richard owns and operates a small business at an outdoor market where he sells fruits and vegetables. What does the UCC specifically require of Richard with respect to his customers?

a. Observance of reasonable commercial standards of fair dealingb. Honesty in factc. Both (a) and (b).

126. Under Article 2 of the UCC, which of the following would be considered a sale?

a. Bill trades his car for a motorcycle.

127. Shannon orally agrees to buy 500 telephone answering machines from Thomas for $25,000. Thomas delivers 300 answering machines to Shannon, who receives and accepts them. Which of the following is correct with regard to this transaction?

b. The contract is enforceable to the extent of the 300 machines that have been received and accepted.

128. Which of the following is not a requirement of the statute of frauds provision of Article 2 of the UCC?

d. Terms specifying price

129. A sequence of previous conduct between a buyer and a seller, which may be regarded as establishing an understanding for interpreting an agreement between the two parties, is known as:

b. a course of dealing.

130. A contract which does not satisfy the writing requirement of the Article 2 statute of frauds, but which is otherwise valid, is enforceable in which of the following situations?

d. All of the above are situations where the contract would be enforceable.

131. With regard to uncertainty in a contract that falls within the scope of Article 2, which of the following is true?

c. Uncertainty as to incidental matters will seldom be fatal as long as the parties intend to form a contract.

132. The most important element in determining whether a sales contract has been made is the:

d. intention of the parties to make a contract.

134. For $100 each, Helen agrees with Troy Tech to knit 14 sweaters for the soccer team in their school colors with their names on the front and "Go Tech" on the back. After Helen has almost finished the last sweater, Troy Tech decides it should spend the money on repairs to the locker room instead of on the sweaters. Does Helen's contract have to be in writing for her to enforce it?

b. No, because they are specially manufactured sweaters

135. If no definite time for delivery is fixed by the terms of the contract, delivery:

d. and acceptance must happen within a reasonable amount of time.

136. A buyer in Atlanta enters into a sales contract with a seller in Chicago. If the contract does not mention the place for delivery of the goods, the place of delivery will be:

a. at the seller's business or residence in Chicago.

137. If destruction or casualty to goods, total or partial, occurs after risk of loss has passed to the buyer, who is responsible for losses?

b. The buyer, who must pay the entire contract price of the goods

138. Willingness by the buyer to become the owner of the goods tendered or delivered to him by the seller is:

b. acceptance.

139. Under the ____, a buyer may reject goods for even the slightest defect.

b. perfect tender rule

140. In which of the following situations does the seller have the right to cure?

a. Where the time for performance under the contract has not yet expiredb. After the time for performance has expired if the seller had reasonable grounds for believing the buyer would accept a nonconforming tender with or without monetary adjustmentd. Both (a) and (b)

141. If Mary allows the seller, Baymore Co., four weeks to repair the defects in her kitchen set. They have tried, but have not done a good job at it. She may revoke her acceptance as long as she:

a. notifies Baymore of the revocation.

142. On June 1, Supertread Tire Company entered into a contract to provide 100 tires per month to ZYX Cycle Company at $30 per tire for the next two years. The October shipment consisted of 100 badly defective tires. ZYX Cycle Company:

b. can reject the October shipment if it cannot be cured in a timely manner by Supertread.

143. Howard stole a word processor and then sold it to his friend Ivan for $100.

c. Ivan has a void title to the word processor.

144. Although he knows the ring is really valuable, Alex tells Mona her ring contains artificial gems, but he would be willing to buy it for $50. Mona agrees. Alex quickly takes the ring to Hanna's Antique Jewelry Shop and sells it for $1,000. A month later, Mona sees her ring on sale for $2,000 at the shop. Is Mona entitled to get the ring back?

c. No, since Alex had voidable title to the ring and Hanna was a good faith purchaser.

145. Alex tells Mona that he thinks her ring is very valuable and that he would like to take it to be appraised. She gives him the ring, and he quickly sells it to unsuspecting Hanna's Antique Jewelry Shop for $2,000. A week later, Mona discovers her ring on sale at Hanna's and uncovers the story. Can Mona get the ring back?

b. Yes, since Alex had no title to the ring

146. Jack is a guest in Harry's home. While there, he goes into the library and picks up a music box that is part of Harry's collection. Jack overwinds the stem and it breaks. Hoping Harry won't notice, Jack takes the music box for repair to a jeweler who sells similar ones. The jeweler fixes it, but forgets to tag it and an unsuspecting clerk sells it to Robert. Jack is frantic. Can Harry get the music box from Robert?

d. Yes, Robert has assumed only Jack's title, which is no title at all

147. Growingreen, a gourmet fresh food store, orders 100 lbs. of peaches from Western Fruits "on approval." Growingreen has never dealt with Western before this transaction. Since it only sells the highest quality fruits, Growingreen asked for and received these special terms. The peaches arrived on Saturday, but the owners of Growingreen were too busy to open the crates. Sunday they are closed. Monday at 4 p.m., they opened the boxes and inspected the peaches. They did not meet the high standards of Growingreen, so they nailed the crates shut and ordered a truck to return them the next day. They arrived at Western on Thursday, totally spoiled, a week after they were sent. This is the first time Western knew they were not being accepted. Who is responsible for the damages to the peaches?

a. Growingreen, since it did not, within a reasonable time, notify Western of its election to return the peaches

148. The seller and buyer of goods agree that identification will be made by the seller when it manufactures and separates those particular goods out for the buyer. Identification will actually occur:

a. at the time and in the manner agreed upon by the parties.

149. Brett contracts to purchase a particular Chevrolet from Johnson's car lot. At what point does Brett obtain a special property interest that enables him to insure the car?

b. When the contract is made

150. In a sale on approval:

a. possession but not title is transferred to the buyer for a stated period of time.

151. According to the Code, a good faith purchaser for value obtains valid title from one possessing voidable title even if that person obtained voidable title by:

a. fraud as to her identity.b. criminal fraud.c.an agreement that the transaction was to be a cash sale, and the price has not been paid.d. All of the above

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