bl 15-17
13 Pages

bl 15-17

Course Number: BUSINESS L 100, Spring 2010

College/University: Oklahoma City Community...

Word Count: 3778

Rating:

Document Preview

chapter 15 1. Adam pays Beta Corporation $1,500 for a notebook computer. Under the UCC, this is A) a bailment. B) a consignment. C) a lease. D) a sale. Feedback: Points Earned: 1.0/1.0 Correct Answer(s): D 2. Alpha Electronics, Inc., sells computers and computer accessories to persons who order them. Alpha is a merchant with respect to A) computers only. B) computer accessories only. C) computers and computer...

Unformatted Document Excerpt
Coursehero >> Oklahoma >> Oklahoma City Community College >> BUSINESS L 100

Course Hero has millions of student submitted documents similar to the one
below including study guides, practice problems, reference materials, practice exams, textbook help and tutor support.

Course Hero has millions of student submitted documents similar to the one below including study guides, practice problems, reference materials, practice exams, textbook help and tutor support.

15 chapter 1. Adam pays Beta Corporation $1,500 for a notebook computer. Under the UCC, this is A) a bailment. B) a consignment. C) a lease. D) a sale. Feedback: Points Earned: 1.0/1.0 Correct Answer(s): D 2. Alpha Electronics, Inc., sells computers and computer accessories to persons who order them. Alpha is a merchant with respect to A) computers only. B) computer accessories only. C) computers and computer accessories. Feedback: D) none of these. Points Earned: 1.0/1.0 Correct Answer(s): C 3. A-One Products Corporation and Best Manufacturing, Inc., enter into a contract for a sale of goods that does not include a price term. In a suit between A-One and Best over the price, a court will A) determine a reasonable price. Feedback: B) impose the lowest market price for the goods. C) refuse to enforce the agreement. D) return the parties to the positions they held before the contract. Points Earned: 1.0/1.0 Correct Answer(s): A 4. Coastal Sales Corporation sends its purchase order form to Delta Products, Inc., for sixty display stands. Delta responds with its own form. Additional terms in Deltas form automatically become part of the contract unless A) Coastal objects to the new terms within a reasonable period of time. B) Coastals form expressly required acceptance of its terms. C) the additional terms materially alter the original contract. D) any of these. Feedback: Points Earned: 1.0/1.0 Correct Answer(s): D 5. Mountain Boots, Inc., and National Shoe Company orally agree to a sale of 100 pair of hiking boots for $5,000. National gives Mountain a check for $500 as a down payment. At this point, the contract is A) enforceable to at least the extent of $500. Feedback: B) fully enforceable because it is for specially made goods. C) fully enforceable because it is oral. D) none of these. Points Earned: 1.0/1.0 Correct Answer(s): A 6. Apex Corporation sells two construction cranes to Baker Company, which leases one crane to Construction, Inc., and gives the other crane to Equipment, Inc. Article 2A of the UCC applies to A) the gift only. B) the lease only. Feedback: C) the sale only. D) the gift, the lease, and the sale. Points Earned: 1.0/1.0 Correct Answer(s): B 7. Britney and Carl dispute the interpretation of an ambiguous clause in their contract. In a suit to determine the meaning of the clause, the court may accept evidence of A) consistent additional terms only. Feedback: B) consistent additional terms and contradictory terms. C) contradictory terms only. D) anything extrinsic to the contract. Points Earned: 1.0/1.0 Correct Answer(s): A 8. Eve enters a contract with Fancy Furniture, Inc. In a later suit, Eve claims that a clause in the contract is unconscionable. If the court agrees, it may A) enforce, limit, or refuse to enforce the contract or the disputed clause. Feedback: B) enforce the contract without the disputed clause only. C) limit the application of the disputed clause only. D) refuse to enforce the contract only. Points Earned: 1.0/1.0 Correct Answer(s): A 9. Digital Products, Inc., agrees to buy an unspecified quantity of microchips from Excel Corporation. Excel breaches the contract. Digital can probably A) enforce the agreement to the amount of a reasonable quantity. B) enforce the agreement to the amount of Digitals requirements. C) enforce the agreement to the amount of Excels output. D) not enforce the agreement. Feedback: Points Earned: 1.0/1.0 Correct Answer(s): D 10. Lyle in Great Britain orally agrees to sell 100 VCRs at $100 each to Maria in Mexico. Britain and Mexico have adopted the CISG. Lyle fails to deliver. With respect to the deal, Maria can A) enforce it. Feedback: B) not enforce it because it is not in writing. C) not enforce it because it is not supported by consideration. D) not enforce it because the price term is not specified. Points Earned: 1.0/1.0 Correct Answer(s): A 1. Article 2 of the UCC governs sales of goods. A) True B) False Points Earned: 1.0/1.0 Correct Answer(s): True 2. Under the UCC, a sale occurs when title passes from a seller to a buyer for a price. A) True B) False Points Earned: 0.0/1.0 Correct Answer(s): True 3. The UCC governs sales of services and real estate. A) True B) False Feedback: If a transaction involves only a service, the common law usually applies (one exception is the serving of food or drink, which is governed by the UCC). When goods and services are combined, courts have disagreed over whether a particular transaction involves a sale of goods or a rendering of service. Usually, a court will apply the law that applies to whichever feature is dominant. Article 2 does not cover sales of real estate, although sales of goods associated with real estate, including crops, may be covered. A contract for a sale of minerals, for example, is considered a contract for a sale of goods if the severance is to be made by the seller. Points Earned: 1.0/1.0 Correct Answer(s): False 4. Under the UCC, an agreement modifying a contract needs new consideration to be binding. A) True B) False Feedback: Unlike the common law rule that a contract modification must be supported by new consideration, the UCC requires no consideration for an agreement modifying a contract. Points Earned: 0.0/1.0 Correct Answer(s): False 5. If a contract for a sale of goods is missing a term, it will not be enforceable. A) True B) False Feedback: A contract will be enforceable, and a writing will be sufficient under the UCC?s Statute of Frauds, if it indicates that a contract was intended, if it includes a quantity term, and?except for transactions between merchants?if it is signed by the party against whom enforcement is sought. Most terms can be proved by oral testimony or be supplied by the UCC?s open term provisions (for example, price, delivery, and payment terms). A contract is not enforceable beyond the quantity of goods shown in the writing, however, except for output and requirements contracts. Points Earned: 0.0/1.0 Correct Answer(s): False 6. An unconscionable contract is a contract so one-sided and unfair, at the time it is made, that enforcing it would be unreasonable. A) True B) False Points Earned: 0.0/1.0 Correct Answer(s): True 7. In effect, the CISG is to international sales contracts what Article 2 of the UCC is to domestic sales contracts. A) True B) False Points Earned: 1.0/1.0 Correct Answer(s): True 8. Under the UCC, an offer to buy goods can be accepted only by a prompt shipment of the goods. A) True B) False Feedback: A seller can accept an offer to buy goods for current or prompt shipment by promptly shipping the goods or by promptly promising to ship the goods. Of course, under the mirror image rule, an offer must be accepted in its entirety without modification, or there is no contract. Under the UCC, additional terms may become part of the contract if both parties are merchants (though not if at least one party is a nonmerchant). Points Earned: 1.0/1.0 Correct Answer(s): False 9. A lease agreement is the lessor and lessees bargain. A) True B) False Points Earned: 1.0/1.0 Correct Answer(s): True 10. No oral contract is enforceable under the UCC. A) True B) False Feedback: Under the UCC, oral contracts for specially manufactured goods may be enforceable. Also, an oral contract for a sale or lease of goods may be enforceable if the party against whom enforcement is sought admits in court pleadings or proceedings that a contract was made. Partial performance of a contract for a sale or lease of goods may also support the enforcement of an oral contract, at least to the extent of that performance. Points Earned: 0.0/1.0 Correct Answer(s): False chapter 16 1. First Financial Corporation (FFC) orders 100 computers from E-Electronics, Inc. For E-Electronics to tender delivery of the goods, the seller must A) only give notice to enable FFC to take delivery. B) only hold conforming goods at FFCs disposal . Feedback: The parties to a contract can stipulate the time, place, and manner of delivery. In the absence of specific details, however, the seller or lessor?s obligation is to tender delivery at a reasonable hour and in a reasonable manner. The buyer must be notified, and the goods must be kept available for a reasonable time. C) give notice to FFC and hold conforming goods at FFCs disposal. D) none of these. Points Earned: 0.0/1.0 Correct Answer(s): C 2. Engineering, Inc. (EI), agrees to sell specially made parts to Precision Manufacturing Company. EI does not deliver. Due to a market shortage, Precision cannot obtain cover. The buyers right to recover the parts from EI is A) novation. Feedback: Replevin is an action to recover specific goods in the possession of a party who is wrongfully withholding them. When a seller (or lessor) refuses to deliver (or repudiates the contract), the buyer or lessee may maintain an action to replevy the goods. The buyer or lessee must show, however, an inability to cover. B) replevin. C) rescission. D) specific performance. Points Earned: 0.0/1.0 Correct Answer(s): B 3. Kay contracts to sell five laser printers to Lora under a shipment contract. Kay must A) only make a reasonable contract for the transport of the goods. B) only tender to Lora the documents needed to obtain possession of the goods. C) make a reasonable contract for the transport of the goods and tender the documents needed to obtain the goods. Feedback: D) none of these. Points Earned: 1.0/1.0 Correct Answer(s): C 4. Alpha Stores, Inc., refuses to buy 1,000 DVD players for $80 each from Beta Products Company under their contract, due to a drop in the market price for the players, which can be bought for $40 each. As damages, Beta can recover A) $120,000. B) $80,000. C) $40,000. Feedback: D) $0. Points Earned: 1.0/1.0 Correct Answer(s): C 5. Delta Grocers, Inc., agrees to buy 10,000 potatoes from Eagle Farms. Only half of the shipment conforms to the contract, but conforming potatoes are in short supply in the market. Deltas best course is to A) accept the entire shipment. B) accept the conforming goods and sue Eagle for the difference between the contract price and the cost of cover. Feedback: C) reject the entire shipment and sue Eagle for specific performance. D) suspend payment and wait to see if Eagle will tender conforming goods. Points Earned: 1.0/1.0 Correct Answer(s): B 6. Excel Corporation agrees to sell the latest version of its Go! computer game to National Retail Company. Excel delivers an outdated version of Go! (nonconforming goods). Nationals possible remedies may include A) recovering damages only. B) rejecting part or all of the goods, or revoking acceptance only. C) recovering damages, rejecting goods, or revoking acceptance. Feedback: D) none of these. Points Earned: 1.0/1.0 Correct Answer(s): C 7. Adam contracts to buy goods from Beth. Beth wrongfully fails to deliver the goods. Adam can recover damages equal to the difference between the contract price and the market price A) at the time the contract was made. B) at the time and place of tender. Feedback: A buyer (or lessee) can sue for damages when a seller (or lessor) repudiates the contract or fails to deliver the goods, or when the buyer has rightfully rejected or revoked acceptance of the goods. The place for determining the price is the place at which the seller was to deliver the goods. The buyer may also recover incidental and consequential damages, less expenses saved due to the breach. C) when Adam of learned the breach. D) when Adam filed a suit against Beth. Points Earned: 0.0/1.0 Correct Answer(s): C 8. Fine Poultry Corporation agrees to sell 600 frozen chickens to Fast Food, Inc., in three equal installments. In the first installment, 100 chickens are spoiled. Fast Food can A) cancel the contract. B) recover from Fine Poultry for breach of the entire contract. C) reject the first installment only. Feedback: D) use the unspoiled chickens without payment. Points Earned: 1.0/1.0 Correct Answer(s): C 9. Apple Farms contracts for a sale of fruit to Best Groceries, Inc. Apple can enforce its right to payment A) only after Best has inspected the goods. B) only after Best has had an opportunity to inspect the goods. C) only before Best has inspected the goods. Feedback: Unless the contract provides otherwise, a buyer (or lessee) has an absolute right to inspect tendered goods before making payment, to verify that they are as ordered. If they are not as ordered, the buyer has no duty to pay, and the seller cannot enforce any right to payment. D) whether or not Best has had the opportunity to inspect the goods. Points Earned: 0.0/1.0 Correct Answer(s): B 10. Athletic Goods, Inc. (AGI), agrees to sell sports equipment to Bobs Sports Store. Before the time for performance, AGI tells Bob that it will not deliver. This is A) anticipatory repudiation. B) perfect tender. C) rejection of performance. D) revocation of acceptance. Feedback: If, before the time of performance, a party to a contract informs the other party that he or she will not perform, the nonbreaching party can treat the repudiation as a final breach and seek a remedy or wait, for a commercially reasonable time, hoping that the breaching party will decide to honor the contract. In either case, the nonbreaching party can suspend his or her performance. Points Earned: 0.0/1.0 Correct Answer(s): A 1. The duties and obligations of the parties to a contract include those specified in the agreement. A) True B) False Points Earned: 1.0/1.0 Correct Answer(s): True 2. Generally, under a sales or lease contract, all goods must be tendered in a single delivery. A) True B) False Points Earned: 1.0/1.0 Correct Answer(s): True 3. If goods fail to conform to a contract in any way, a buyer or lessee can accept or reject the goods. A) True B) False Points Earned: 0.0/1.0 Correct Answer(s): True 4. Unless the parties agree otherwise, a buyer or lessee must pay for goods in advance. A) True B) False Feedback: If the parties do not agree otherwise, the buyer or lessee must pay for the goods at the time and place of their receipt (subject, in most cases, to the buyer or lessee?s right to inspect). When a sale is on credit, a buyer must pay according to credit terms, not when the goods are received. Credit terms may provide for payment within thirty days, for example. A credit period usually begins on the date of shipment. Points Earned: 0.0/1.0 Correct Answer(s): False 5. If a contract does not specify otherwise, the place for delivery of goods is the buyers place of business. A) True B) False Feedback: If a contract does not state where goods are to be delivered, and the buyer is to pick them up, the place for delivery is the seller?s place of business (unless the parties know that the goods are elsewhere, in which case the place of their delivery is their location). Shipment and destination contracts are subject to different rules that depend on their terms. Points Earned: 1.0/1.0 Correct Answer(s): False 6. A buyer or lessee who accepts a delivery of goods cannot withdraw the acceptance. A) True B) False Feedback: A buyer or lessee who accepts nonconforming goods can revoke the acceptance, but only by notifying the seller or lessor, which must occur within a reasonable time and before goods have, for example, spoiled. If the goods are perishable, the buyer or lessee must follow any reasonable instructions of the seller or lessor regarding the goods. (This is also the case when the buyer or lessee rejects the goods.) Points Earned: 1.0/1.0 Correct Answer(s): False 7. A seller or lessor cannot consider a buyer or lessee in breach until the time for performance has past. A) True B) False Feedback: Before the time for performance, if a buyer or lessee clearly communicates his or her intent not to perform, the seller or lessor can suspend performance and wait to see if the other will perform, or the seller or lessor can treat the anticipatory repudiation as a breach, suspend performance, and pursue a remedy. Points Earned: 0.0/1.0 Correct Answer(s): False 8. In an installment contract, a buyer can reject any installment for any reason. A) True B) False Feedback: A buyer can reject an installment only if its nonconformity substantially impairs the value of the installment and it cannot be cured (in which case, the seller has breached the contract). Points Earned: 1.0/1.0 Correct Answer(s): False 9. If a buyer or lessee wrongfully refuses to accept or pay for conforming goods, the seller or lessor can cancel the contract and recover damages. A) True B) False Points Earned: 0.0/1.0 Correct Answer(s): True 10. If a seller or lessor wrongfully refuses to deliver conforming goods, the buyer or lessee can cancel the contract and recover damages. A) True B) False Points Earned: 1.0/1.0 Correct Answer(s): True chapter 17 1. City Car Company and Dave's Autos enter into a contract for a sale of motor vehicles. City assures Dave's that it has valid title to the vehicles. Under the UCC, a warranty of title arises A) automatically in most sales contracts. B) only if the buyer asks for such a warranty. C) only if the seller expresses such a warranty. D) only in conjunction with lease contracts, not sales contracts. Points Earned: 1.0/1.0 Correct Answer(s): A 2. Parker, a salesperson for Quality Textiles, Inc., shows Rosa, a fabric buyer for Style Clothing Company, samples of cloth, stating that any shipment will match the samples. This statement is A) an express warranty. B) an implied warranty. C) a warranty of title. D) puffing. Points Earned: 1.0/1.0 Correct Answer(s): A 3. Good Tire Company and Hiway Auto Service enter into a contract for a sale of tires. Good Tire is a merchant who deals in goods of the kind sold. Under the UCC, an implied warranty of merchantability arises A) automatically in sales contracts. B) only if the buyer asks for it. C) only if the seller does not expressly disclaim it. D) only in conjunction with lease contracts, not sales contracts. Points Earned: 1.0/1.0 Correct Answer(s): A 4. Imported Carpets Store and Jill enter into a contract for a sale of an Oriental rug. Imported Carpets, a merchant who deals in goods of the kind sold, generally describes the goods, details technical specifications, and shows a sample. Under the UCC, if these are inconsistent A) the general description displaces the sample. B) the general description displaces the technical specifications. C) the sample takes precedence over the general description. D) the sample takes precedence over the technical specifications. Points Earned: 1.0/1.0 Correct Answer(s): C 5. Fact Pattern 17-1 Bret, a representative of Concrete Products, Inc. assures Dependable Construction Company (DCC) that Concrete's cement will not crack within a certain range of temperatures. DCC uses the product. When cracks develop within the stated temperature range, DCC files a suit against Concrete. Refer to Fact Pattern 17-1. The court is most likely to rule in favor of A) Concrete, because Bret's statement was an expression of opinion. B) Concrete, because DCC chose Concrete's product voluntarily. C) DCC, because Bret's statement was an express warranty. D) DCC, because Concrete's product is not fit for its purpose. Points Earned: 1.0/1.0 Correct Answer(s): C 6. Farm Equip, Inc., makes farming machinery. Gail discovers that her Farm Equip tractor is defective and sues the maker for product liability based on negligence. To win, Gail must show that A) Farm Equip sold the tractor to Gail. B) Gail knew and appreciated the risk caused by the defect. C) Gail suffered an injury caused by the defect. D) the "defect" was a commonly known danger. Points Earned: 1.0/1.0 Correct Answer(s): C 7. Forest & Field Company makes and leases a backhoe to Zach. Due to a defect attributable to Forest & Field's negligence, Zach is injured in an accident in which his neighbor Aron is also hurt. In a product liability suit based on negligence, Forest & Field may be liable to A) Aron only. B) no one. C) Zach and Aron. D) Zach only. Points Earned: 1.0/1.0 Correct Answer(s): C 8. Fun Toyz Corporation makes skateboards, which it sells to consumers, including Holly and Ira. Due to a defect, Holly is injured while using her new board. Ira's board has the same defect, but he is not injured. In a product liability suit based on strict product liability, Fun Toyz may be liable to A) Holly and Ira. B) Holly only. C) Ira only. D) no one. Points Earned: 1.0/1.0 Correct Answer(s): B 9. Cold Stuf, Inc., makes snowboards, which it sells to Deep Freeze Sports Store (DFS). DFS sells Cold Stuf boards to consumers, including Ed. Ed is injured while using the board. In a product liability suit based on strict liability, Ed may recover from A) Cold Stuf only. B) Cold Stuf or DFS. C) DFS only. D) no one. Points Earned: 1.0/1.0 Correct Answer(s): B 10. Pharma Company, Oral Meds Corporation, and Narco, Inc., are drug makers. Medico Company and Lab Source, Inc., are drug distributors. In a suit against all of these parties in which market- share liability is imposed, most likely to be liable are A) neither the distributors nor the manufacturers. B) the distributors and the manufacturers. C) the distributors only. D) the manufacturers only. Points Earned: 1.0/1.0 Correct Answer(s): B 1. Advertisements can include express warranties. A) True B) False Points Earned: 0.0/1.0 Correct Answer(s): A 2. A seller must use words such as "warrant" to make an express warranty. A) True B) False Points Earned: 0.0/1.0 Correct Answer(s): B 3. A product is unmerchantable if an accident could arise in connection with the goods. A) True B) False Points Earned: 1.0/1.0 Correct Answer(s): B 4. Merchants are required to warrant that the goods they sell are fit for their ordinary purpose. A) True B) False Points Earned: 1.0/1.0 Correct Answer(s): A 5. A seller must provide a written warranty for consumer goods. A) True B) False Points Earned: 1.0/1.0 Correct Answer(s): B 6. A merchant can disclaim an implied warranty of merchantability. A) True B) False Points Earned: 0.0/1.0 Correct Answer(s): A 7. To succeed in a strict product liability suit, an injured plaintiff must show that a product's defect was the proximate cause of the injury. A) True B) False Points Earned: 1.0/1.0 Correct Answer(s): A 8. A design defect is not the sort of product defect that will support the imposition of liability on a strict product liability basis. A) True B) False Points Earned: 0.0/1.0 Correct Answer(s): B 9. An inadequate warning is not a product defect that will support the imposition of liability on a strict product liability basis. A) True B) False Points Earned: 1.0/1.0 Correct Answer(s): B 10. In many states, the plaintiff's negligence is a defense that may be raised in a product liability suit based on strict liability. A) True B) False Points Earned: 1.0/1.0 Correct Answer(s): A
MOST POPULAR MATERIALS FROM Oklahoma City Community College