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TJ_Comp 20_TB_Ch23

TJ_Comp 20_TB_Ch23 - Chapter 23NATURE AND FORM OF SALES...

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Chapter 23—NATURE AND FORM OF SALES TRUE/FALSE 1. The transferor of goods is the buyer or vendee, while the transferee of goods is the seller or vendor. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 2. The subject matter of a sale of goods may be anything that is movable at the time that it is identified as the subject of the transaction. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 3. Goods physically existing and owned by a seller at the time of a transaction are called existing goods. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 4. A bailment is a special form of sale in which possession is transferred to a bailee. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 5. A gift is a free transfer of the title of property. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 6. A contract that has elements of both goods and services is always classified as a contract for the sale of goods. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 7. When a patient receives a filling at a dentist, there is a sale of goods. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 8. A firm offer is effective only if the merchant receives consideration to keep the offer open. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 9. Sales law has special rules that apply to merchants. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 10. An offer to buy or sell goods may be accepted in any manner that is reasonable under the circum- stances. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 11. When a term of an acceptance conflicts with a term of an offer to buy goods, the conflicting terms are canceled out and ignored when it is clear that the parties intended to be bound by a contract. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic
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12. In most situations, the timing rules of common law that determine when a contract has been formed are identical to those used under Article 2. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 13. A contract for the sale of goods is not enforceable unless the contract clearly expresses the price. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 14. An output or requirement contract is not enforceable unless the parties include an estimate of prospect- ive amounts. ANS: F TOP: AICPA BB-Legal MSC: AACSBAnalytic 15. A contract of indefinite duration may be terminated on notice by either party. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 16. Any modification of a sales contract must be supported by some form of consideration. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 17. The parol evidence rule does not apply to the sale of goods. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 18. Patterns of doing business in a sales transaction may be used to indicate intent of the parties when ex- press terms are unclear or missing. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 19. Defenses raised in a suit based on a sales contract differ greatly from defenses used in regard to any other contract type.
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