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Ebook Cengage Advantage Books Fundamentals of Business Law Excerpted Cases 3Rd Edition Roger Leroy Miller Test Bank Full Chapter PDF
Ebook Cengage Advantage Books Fundamentals of Business Law Excerpted Cases 3Rd Edition Roger Leroy Miller Test Bank Full Chapter PDF
Student: ___________________________________________________________________________
2. Stocks are an example of property that does not come under UCC Article 2.
True False
5. The UCC imposes the same rules of conduct on all parties in all circumstances.
True False
7. A lessee is a party who transfers a right to the possession and use of goods under a lease.
True False
8. A lessor is a party who acquires a right to the possession and use of goods under a lease.
True False
9. Under the UCC, the validity of a contract depends on its price term.
True False
10. Under the UCC, a contract for a sale of goods that includes open terms is void.
True False
11. If a contract for a sale of goods does not include a price term, a reasonable price can be determined by
looking at the market for the goods.
True False
12. If a contract for a sale of goods does not include a quantity term, it is a requirements contract.
True False
15. Under the UCC, an oral contract for a sale of goods is enforceable unless payment has been made and
accepted.
True False
16. An unconscionable contract is a contract so one-sided and unfair at the time it is made that enforcing it
would be unreasonable.
True False
17. Title is one concept that the UCC has substituted for the common law concept of risk of loss.
True False
18. The UCC has replaced the common law concept of title in part with the concept of identification.
True False
19. Identification takes place when specific goods are designated as the subject matter of a sales or lease
contract.
True False
20. Fungible goods are goods that cannot be delivered by physical transport.
True False
21. "Unless otherwise explicitly agreed," title passes to the buyer at the time and place at which the seller
physically delivers the goods.
True False
24. A receipt issued by a warehouser for goods stored in a warehouse is a bill of lading.
True False
25. A seller with void title can transfer good title to a good faith purchaser for value.
True False
26. A seller with voidable title can transfer good title to a good faith purchaser for value.
True False
27. Under a destination contract, if a lessor is a merchant, the risk of loss passes to a lessee when the lessee
takes physical possession of the goods.
True False
28. If a seller is a merchant, and the seller holds the goods, the risk of loss passes to a buyer when the buyer
takes physical possession of the goods.
True False
30. If a seller is not a merchant, and the seller holds the goods, the risk of loss cannot pass to a buyer.
True False
31. If a seller is a merchant, and the seller holds the goods, the risk of loss cannot pass to a buyer.
True False
32. When a buyer breaches a contract, the risk of loss immediately shifts to the buyer.
True False
34. A contract between parties residing in different countries is subject to United Nations Convention on
Contracts for the International Sale of Goods.
True False
35. A contract between parties residing in different countries is subject to Article 2A of the UCC.
True False
36. Bild-Rite, Inc., is a Colorado-based firm that does business with clients throughout North America.
Bild-Rite oversees construction projects, and buys and sells commercial buildings, undeveloped land, and
construction supplies and other goods. Bild-Rite has had to deal with work-site theft and vandalism. With
respect to these circumstances, the Uniform Commercial Code (UCC) provides a framework for
A. commercial transactions for the sale of and payment for goods.
B. international construction contracts.
C. domestic and foreign transactions in real estate.
D. prosecuting crimes against business interests.
37. Omni Corporation is a Pennsylvania-based firm that does business throughout the United States. With
respect to this circumstance, the UCC has been adopted by, and applies in,
A. a few of the states.
B. all of the states, in whole or in part.
C. half of the states.
D. none of the states, to date.
38. 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.
39. Over the course of a year, Real Deal Corporation sells appliances to customers to whom it extends credit.
Real Deal orders the appliances from Superior Appliance Company's warehouse, from which the items are
shipped via common carrier to Real Deal's customers. Article 2 of the UCC governs
A. all of the parties' sales of the goods.
B. Real Deal's extension of credit.
C. Superior's storage of the goods.
D. the common carrier's delivery of the goods.
40. Rally Corporation enters into a contract to sell ski gear to SnoSportz Company, which sells a pair of the skis
to Tyra, a consumer, who later sells them to Uli, another consumer. Article 2 of the UCC applies to the sales
transactions between
A. all of the buyers and sellers.
B. Rally and SnoSportz only.
C. SnoSportz and Tyra only.
D. Tyra and Uli only.
41. In a dispute over a sale involving a bicycle, Dain argues that as to this deal Elle's Hobby Shop, where Dain
bought the bike, is a merchant. A court may determine whether Elle'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.
42. Expert Stitching Corporation enters into a contract to sell denim clothing to Fine Fashion Company, which
in turn sells a pair of jeans to Grady, a consumer. 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.
43. Curtis enters into a contract with Drive-Away Lease Company for a three-year lease of a car. This contract
is subject to
A. Article 2 of UCC.
B. Article 2A of the UCC.
C. Article 11 of the CISG.
D. the common law only.
44. Rikki and Sid enter into a sales contract. With respect to the specific contractual provisions set out in the
UCC, Rikki and Sid 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.
45. Metro Daily and New City Newsstand enter into a contract under which Metro agrees to deliver a certain
quantity of newspapers to New City each day. 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.
B. impose the lowest market price.
C. refuse to enforce the agreement.
D. return the parties to the positions they held before the contract.
46. VuTech Company agrees to sell digital video equipment to Home & Business Stores, Inc., for Home &
Business to market to its customers. Their contract will not be enforceable unless it includes
A. the duration of the deal.
B. the price of the goods.
C. the quantity of the goods.
D. the requirements of Home & Business's customers.
47. Doctors Medical Clinic orders 1,000 bandages from Emergency Supplies Company but fails to specify the
sizes. The bandages are delivered in an assortment of sizes. Doctors Medical Clinic may
A. accept the bandages "as is" only.
B. accept the bandages "as is" or reject the entire shipment only.
C. accept only the bandages that it wants and reject the rest.
D. reject the entire shipment only.
48. 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.
49. Tasty Pastries, Inc., and other bakers refer to a "baker's dozen" as consisting of a collection of thirteen baked
goods. This is an example of
A. course of dealing.
B. course of performance.
C. square dealing.
D. usage of trade.
50. Timber Products, Inc., and Walt, a consumer, enter into a contract for a sale of plywood. If the contract
includes a clause that is perceived as grossly unfair to Walt, its enforcement may be challenged under the
doctrine of
A. good faith.
B. square dealing.
C. the mere image rule.
D. unconscionability.
51. Uri sells 100 cases of vitamins to Wanda, but before she takes physical possession, the cases are lost. Under
the UCC, the parties' rights and obligations with respect to the loss depend on the concept of
A. physical possession.
B. product liability.
C. risk of loss.
D. title.
52. Office Equipment Leasing, Inc. (OEL), agrees to lease five computer workstations to Product Promotion
Corporation (PPC). Before any interest in the workstations can pass from OEL to PPC, they must be
A. in existence and identified as the goods in the contract.
B. in existence only.
C. identified as the specific goods designated in the contract only.
D. none of the choices.
53. A specific grade of corn that fills BioFuel Cooperative's silo is fungible. This means that the corn is
A. alike naturally or by agreement or trade usage.
B. fundamentally different.
C. fundamentally edible.
D. perishable.
54. On behalf of Premier Shipbuilding Corporation (PSC), Rita orders 1,000 cases of 1/4-inch nuts from Steel
Parts Company's 10,000-case lot. Steel Parts separates 1,000 cases from the lot. Title and risk of loss
A. remain with Steel Parts until PSC acknowledges tender of delivery.
B. remain with Steel Parts until PSC accepts 1,000 cases.
C. shift to PSC after it accepts the nuts and inspects them for defects.
D. shift to PSC when Steel Parts separates the cases.
55. Alaskan salmon that fill the hold of Bill and Carla's fishing boat are fungible if the salmon are
A. alike naturally or by agreement or trade usage.
B. fundamentally different.
C. fun, good, and edible.
D. liable to deteriorate over time.
56. Kip, a representative for Lite-Weight Shipping Company, delivers a bill of lading to Meg, the owner of
Capacity Storage Warehouse. A bill of lading is
A. an invoice for payment for loading and carting.
B. an order to ship goods by carrier to a certain destination.
C. a receipt for goods signed by a carrier.
D. a receipt issued by a warehouser for goods in a warehouse.
57. Lewey's Bicycle Store contracts to buy fifty bicycles from Mountain Bikes, Inc. Unless the contract states
otherwise, this is
A. a bill of lading.
B. a destination contract.
C. a shipment contract.
D. a warehouse receipt.
58. Raw Material, Inc., and Sewn Fabric Corporation enter into a contract for a sale of muslin. The terms do not
clearly indicate whether it is a destination or shipment contract. A court would most likely presume that it is
A. a bailment contract.
B. a destination contract.
C. a shipment contract.
D. a transportation contract.
59. EZ Equipment Corporation leases six forklifts to Fresco Refining Company, but as the forklifts are
delivered, they are lost in an explosion. Under the UCC, the parties' rights and obligations with respect to the
loss depend on the concept of
A. physical possession.
B. product liability.
C. risk of loss.
D. title.
60. Ideal Gadgets, Inc., and Jolly Outlets Corporation enter into a contract for a sale of kitchenware. The
contract requires Ideal to deliver the goods to Ladle Carrier Company for transport to Jolly's warehouse in
Metro City. Risk of loss passes to Jolly when
A. Ideal delivers the goods to Ladle.
B. Ideal identifies the goods to the contract.
C. Ladle transports the goods to Jolly's warehouse.
D. the goods arrive in Metro City.
61. Silky Material Corporation in New Jersey sells fifty tons of fabric to Tattered Clothing, Inc., in Ohio,
"F.O.B. New Jersey." The cost of transporting the fabric to Ohio will be paid by
A. Silky Material.
B. Tattered Clothing.
C. New Jersey.
D. Ohio.
62. Fits Like A Glove Shoes, Inc., and Retail Footwear Stores enter into a contract for a sale of shoes. The
contract indicates that the price includes transportation costs to a specific destination by including the term
A. C.I.F.
B. delivery ex-ship.
C. F.A.S.
D. F.O.B.
63. Aromatic Tea Company and Savory Stores, Inc., enter into a contract for a sale of tea. The contract includes
the term "F.O.B. Upriver City," which is Savory's location. This means that the contract is
A. a bailment contract.
B. a destination contract.
C. a shipment contract.
D. a transportation contract.
64. Home Products Store buys furniture from Relax Furniture, Inc. The parties agree that the furniture will be
shipped "F.O.B. Relax's warehouse" to Home Products via Swifty Shipping Corporation. The furniture is lost in
transit. The loss is suffered by
A. Home Products and Relax Furniture, but not Swifty Shipping.
B. Home Products, Relax Furniture, and Swifty Shipping.
C. Home Products only.
D. Relax Furniture only.
65. Diners Café orders five gallons of transfat-free cooking oil from Restaurant Supply, Inc. The seller
mistakenly ships the wrong oil, which the buyer keeps, despite the nonconformity. The oil is destroyed in a
kitchen fire. The loss is suffered by
A. Diners and Restaurant Supply, but not Diners's customers.
B. Diners, Restaurant Supply, and Diners's customers.
C. Diners only.
D. Restaurant Supply only.
66. Twyla buys a bicycle from U-Pik-It Bike Store, which agrees to keep the bike for Twyla until she picks it
up. Before Twyla gets the bike, a fire destroys the store and the bike. The loss is suffered by
A. neither Twyla nor U-Pik-It
B. Twyla and U-Pik-It.
C. Twyla only.
D. U-Pik-It only.
67. With a bill of lading, Cartage Common Carrier Company acknowledges possession of certain goods and
contracts to deliver them. Cartage is
A. a bailee.
B. a buyer in the ordinary course of business.
C. a good faith purchaser for value.
D. an F.O.B.
68. Rodeo, S.A., which is based in Spain, enters into a contract for the sale of seven hydraulic lifts to Tonnage
Shipping Company, which is based in the United States. This contract is governed by
A. Spanish law.
B. the provisions in the laws of both countries that are similar.
C. Article 2 of the UCC.
D. the United Nations Convention on Contracts for the International Sale of Goods.
69. Quik Sales Corporation orders goods from Re Stock Company. Re plans to market the goods to consumers
generally. Re identifies the goods. Before they are shipped to Quik, an insurable interest in the goods exists in
A. Quik and Re, but not consumers generally.
B. Quik only.
C. Quik, Re, and consumers generally.
D. Re only.
70. Thermal Appliances Corporation, a U.S. firm, orally agrees to sell six freezers to Pisa Pizza, Ltd., in Italy.
Thermal fails to deliver. Under the United Nations Convention on Contracts for the International Sale of Goods
(CISG), Pisa Pizza can
A. enforce the agreement.
B. not enforce the agreement because it is not in writing.
C. not enforce the agreement because the CISG does not apply.
D. not enforce the agreement because Thermal is a U.S. firm.
71. Clean Machines Company makes washing machines. Over the phone, Clean offers to sell Dealers Appliance
Outlet one hundred model EZ2000 washers at a price of $150 per unit. Clean says that it will keep the offer
open for ninety days. Dealers responds that within two or three weeks it will decide whether to accept. One
week later, Clean faxes, and Dealer receives, notice that the offer is withdrawn. Dealer immediately phones
Clean to accept the $150-per-unit offer. When Clean refuses to deliver at that price, Dealer files a suit. Clean
asserts, first, that there is no contract and, second, that if there is a contract, it is unenforceable. Discuss Clean's
assertions.
72. Tune Products, Inc., offers to sell to Unlimited Sales Company one hundred MP3 players at $50 a piece,
subject to certain specific delivery dates. Unlimited replies with a signed purchase order that reads, "Accept
your offer for 100 I-appliances at $50 each. Must be delivered to our warehouse." Tune does not respond or
deliver the goods. Unlimited files a suit for breach of contract, to which Tune answers that there is no contract
because Unlimited's purchase order contained additional terms and is not signed by Tune. Can Unlimited
recover? Explain.
Chapter 13--The Formation of Sales and Lease Contracts Key
2. Stocks are an example of property that does not come under UCC Article 2.
TRUE
5. The UCC imposes the same rules of conduct on all parties in all circumstances.
FALSE
7. A lessee is a party who transfers a right to the possession and use of goods under a lease.
FALSE
8. A lessor is a party who acquires a right to the possession and use of goods under a lease.
FALSE
9. Under the UCC, the validity of a contract depends on its price term.
FALSE
10. Under the UCC, a contract for a sale of goods that includes open terms is void.
FALSE
11. If a contract for a sale of goods does not include a price term, a reasonable price can be determined by
looking at the market for the goods.
TRUE
12. If a contract for a sale of goods does not include a quantity term, it is a requirements contract.
FALSE
15. Under the UCC, an oral contract for a sale of goods is enforceable unless payment has been made and
accepted.
FALSE
16. An unconscionable contract is a contract so one-sided and unfair at the time it is made that enforcing it
would be unreasonable.
TRUE
17. Title is one concept that the UCC has substituted for the common law concept of risk of loss.
FALSE
18. The UCC has replaced the common law concept of title in part with the concept of identification.
TRUE
19. Identification takes place when specific goods are designated as the subject matter of a sales or lease
contract.
TRUE
20. Fungible goods are goods that cannot be delivered by physical transport.
FALSE
21. "Unless otherwise explicitly agreed," title passes to the buyer at the time and place at which the seller
physically delivers the goods.
TRUE
24. A receipt issued by a warehouser for goods stored in a warehouse is a bill of lading.
FALSE
25. A seller with void title can transfer good title to a good faith purchaser for value.
FALSE
26. A seller with voidable title can transfer good title to a good faith purchaser for value.
TRUE
27. Under a destination contract, if a lessor is a merchant, the risk of loss passes to a lessee when the lessee
takes physical possession of the goods.
TRUE
28. If a seller is a merchant, and the seller holds the goods, the risk of loss passes to a buyer when the buyer
takes physical possession of the goods.
TRUE
30. If a seller is not a merchant, and the seller holds the goods, the risk of loss cannot pass to a buyer.
FALSE
31. If a seller is a merchant, and the seller holds the goods, the risk of loss cannot pass to a buyer.
FALSE
32. When a buyer breaches a contract, the risk of loss immediately shifts to the buyer.
TRUE
34. A contract between parties residing in different countries is subject to United Nations Convention on
Contracts for the International Sale of Goods.
TRUE
35. A contract between parties residing in different countries is subject to Article 2A of the UCC.
FALSE
36. Bild-Rite, Inc., is a Colorado-based firm that does business with clients throughout North America.
Bild-Rite oversees construction projects, and buys and sells commercial buildings, undeveloped land, and
construction supplies and other goods. Bild-Rite has had to deal with work-site theft and vandalism. With
respect to these circumstances, the Uniform Commercial Code (UCC) provides a framework for
A. commercial transactions for the sale of and payment for goods.
B. international construction contracts.
C. domestic and foreign transactions in real estate.
D. prosecuting crimes against business interests.
37. Omni Corporation is a Pennsylvania-based firm that does business throughout the United States. With
respect to this circumstance, the UCC has been adopted by, and applies in,
A. a few of the states.
B. all of the states, in whole or in part.
C. half of the states.
D. none of the states, to date.
38. 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.
39. Over the course of a year, Real Deal Corporation sells appliances to customers to whom it extends credit.
Real Deal orders the appliances from Superior Appliance Company's warehouse, from which the items are
shipped via common carrier to Real Deal's customers. Article 2 of the UCC governs
A. all of the parties' sales of the goods.
B. Real Deal's extension of credit.
C. Superior's storage of the goods.
D. the common carrier's delivery of the goods.
40. Rally Corporation enters into a contract to sell ski gear to SnoSportz Company, which sells a pair of the skis
to Tyra, a consumer, who later sells them to Uli, another consumer. Article 2 of the UCC applies to the sales
transactions between
A. all of the buyers and sellers.
B. Rally and SnoSportz only.
C. SnoSportz and Tyra only.
D. Tyra and Uli only.
41. In a dispute over a sale involving a bicycle, Dain argues that as to this deal Elle's Hobby Shop, where Dain
bought the bike, is a merchant. A court may determine whether Elle'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.
42. Expert Stitching Corporation enters into a contract to sell denim clothing to Fine Fashion Company, which
in turn sells a pair of jeans to Grady, a consumer. 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.
43. Curtis enters into a contract with Drive-Away Lease Company for a three-year lease of a car. This contract
is subject to
A. Article 2 of UCC.
B. Article 2A of the UCC.
C. Article 11 of the CISG.
D. the common law only.
44. Rikki and Sid enter into a sales contract. With respect to the specific contractual provisions set out in the
UCC, Rikki and Sid 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.
45. Metro Daily and New City Newsstand enter into a contract under which Metro agrees to deliver a certain
quantity of newspapers to New City each day. 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.
B. impose the lowest market price.
C. refuse to enforce the agreement.
D. return the parties to the positions they held before the contract.
46. VuTech Company agrees to sell digital video equipment to Home & Business Stores, Inc., for Home &
Business to market to its customers. Their contract will not be enforceable unless it includes
A. the duration of the deal.
B. the price of the goods.
C. the quantity of the goods.
D. the requirements of Home & Business's customers.
47. Doctors Medical Clinic orders 1,000 bandages from Emergency Supplies Company but fails to specify the
sizes. The bandages are delivered in an assortment of sizes. Doctors Medical Clinic may
A. accept the bandages "as is" only.
B. accept the bandages "as is" or reject the entire shipment only.
C. accept only the bandages that it wants and reject the rest.
D. reject the entire shipment only.
48. 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.
49. Tasty Pastries, Inc., and other bakers refer to a "baker's dozen" as consisting of a collection of thirteen baked
goods. This is an example of
A. course of dealing.
B. course of performance.
C. square dealing.
D. usage of trade.
50. Timber Products, Inc., and Walt, a consumer, enter into a contract for a sale of plywood. If the contract
includes a clause that is perceived as grossly unfair to Walt, its enforcement may be challenged under the
doctrine of
A. good faith.
B. square dealing.
C. the mere image rule.
D. unconscionability.
51. Uri sells 100 cases of vitamins to Wanda, but before she takes physical possession, the cases are lost. Under
the UCC, the parties' rights and obligations with respect to the loss depend on the concept of
A. physical possession.
B. product liability.
C. risk of loss.
D. title.
52. Office Equipment Leasing, Inc. (OEL), agrees to lease five computer workstations to Product Promotion
Corporation (PPC). Before any interest in the workstations can pass from OEL to PPC, they must be
A. in existence and identified as the goods in the contract.
B. in existence only.
C. identified as the specific goods designated in the contract only.
D. none of the choices.
53. A specific grade of corn that fills BioFuel Cooperative's silo is fungible. This means that the corn is
A. alike naturally or by agreement or trade usage.
B. fundamentally different.
C. fundamentally edible.
D. perishable.
54. On behalf of Premier Shipbuilding Corporation (PSC), Rita orders 1,000 cases of 1/4-inch nuts from Steel
Parts Company's 10,000-case lot. Steel Parts separates 1,000 cases from the lot. Title and risk of loss
A. remain with Steel Parts until PSC acknowledges tender of delivery.
B. remain with Steel Parts until PSC accepts 1,000 cases.
C. shift to PSC after it accepts the nuts and inspects them for defects.
D. shift to PSC when Steel Parts separates the cases.
55. Alaskan salmon that fill the hold of Bill and Carla's fishing boat are fungible if the salmon are
A. alike naturally or by agreement or trade usage.
B. fundamentally different.
C. fun, good, and edible.
D. liable to deteriorate over time.
56. Kip, a representative for Lite-Weight Shipping Company, delivers a bill of lading to Meg, the owner of
Capacity Storage Warehouse. A bill of lading is
A. an invoice for payment for loading and carting.
B. an order to ship goods by carrier to a certain destination.
C. a receipt for goods signed by a carrier.
D. a receipt issued by a warehouser for goods in a warehouse.
57. Lewey's Bicycle Store contracts to buy fifty bicycles from Mountain Bikes, Inc. Unless the contract states
otherwise, this is
A. a bill of lading.
B. a destination contract.
C. a shipment contract.
D. a warehouse receipt.
58. Raw Material, Inc., and Sewn Fabric Corporation enter into a contract for a sale of muslin. The terms do not
clearly indicate whether it is a destination or shipment contract. A court would most likely presume that it is
A. a bailment contract.
B. a destination contract.
C. a shipment contract.
D. a transportation contract.
59. EZ Equipment Corporation leases six forklifts to Fresco Refining Company, but as the forklifts are
delivered, they are lost in an explosion. Under the UCC, the parties' rights and obligations with respect to the
loss depend on the concept of
A. physical possession.
B. product liability.
C. risk of loss.
D. title.
60. Ideal Gadgets, Inc., and Jolly Outlets Corporation enter into a contract for a sale of kitchenware. The
contract requires Ideal to deliver the goods to Ladle Carrier Company for transport to Jolly's warehouse in
Metro City. Risk of loss passes to Jolly when
A. Ideal delivers the goods to Ladle.
B. Ideal identifies the goods to the contract.
C. Ladle transports the goods to Jolly's warehouse.
D. the goods arrive in Metro City.
61. Silky Material Corporation in New Jersey sells fifty tons of fabric to Tattered Clothing, Inc., in Ohio,
"F.O.B. New Jersey." The cost of transporting the fabric to Ohio will be paid by
A. Silky Material.
B. Tattered Clothing.
C. New Jersey.
D. Ohio.
62. Fits Like A Glove Shoes, Inc., and Retail Footwear Stores enter into a contract for a sale of shoes. The
contract indicates that the price includes transportation costs to a specific destination by including the term
A. C.I.F.
B. delivery ex-ship.
C. F.A.S.
D. F.O.B.
63. Aromatic Tea Company and Savory Stores, Inc., enter into a contract for a sale of tea. The contract includes
the term "F.O.B. Upriver City," which is Savory's location. This means that the contract is
A. a bailment contract.
B. a destination contract.
C. a shipment contract.
D. a transportation contract.
64. Home Products Store buys furniture from Relax Furniture, Inc. The parties agree that the furniture will be
shipped "F.O.B. Relax's warehouse" to Home Products via Swifty Shipping Corporation. The furniture is lost in
transit. The loss is suffered by
A. Home Products and Relax Furniture, but not Swifty Shipping.
B. Home Products, Relax Furniture, and Swifty Shipping.
C. Home Products only.
D. Relax Furniture only.
65. Diners Café orders five gallons of transfat-free cooking oil from Restaurant Supply, Inc. The seller
mistakenly ships the wrong oil, which the buyer keeps, despite the nonconformity. The oil is destroyed in a
kitchen fire. The loss is suffered by
A. Diners and Restaurant Supply, but not Diners's customers.
B. Diners, Restaurant Supply, and Diners's customers.
C. Diners only.
D. Restaurant Supply only.
66. Twyla buys a bicycle from U-Pik-It Bike Store, which agrees to keep the bike for Twyla until she picks it
up. Before Twyla gets the bike, a fire destroys the store and the bike. The loss is suffered by
A. neither Twyla nor U-Pik-It
B. Twyla and U-Pik-It.
C. Twyla only.
D. U-Pik-It only.
67. With a bill of lading, Cartage Common Carrier Company acknowledges possession of certain goods and
contracts to deliver them. Cartage is
A. a bailee.
B. a buyer in the ordinary course of business.
C. a good faith purchaser for value.
D. an F.O.B.
68. Rodeo, S.A., which is based in Spain, enters into a contract for the sale of seven hydraulic lifts to Tonnage
Shipping Company, which is based in the United States. This contract is governed by
A. Spanish law.
B. the provisions in the laws of both countries that are similar.
C. Article 2 of the UCC.
D. the United Nations Convention on Contracts for the International Sale of Goods.
69. Quik Sales Corporation orders goods from Re Stock Company. Re plans to market the goods to consumers
generally. Re identifies the goods. Before they are shipped to Quik, an insurable interest in the goods exists in
A. Quik and Re, but not consumers generally.
B. Quik only.
C. Quik, Re, and consumers generally.
D. Re only.
70. Thermal Appliances Corporation, a U.S. firm, orally agrees to sell six freezers to Pisa Pizza, Ltd., in Italy.
Thermal fails to deliver. Under the United Nations Convention on Contracts for the International Sale of Goods
(CISG), Pisa Pizza can
A. enforce the agreement.
B. not enforce the agreement because it is not in writing.
C. not enforce the agreement because the CISG does not apply.
D. not enforce the agreement because Thermal is a U.S. firm.
71. Clean Machines Company makes washing machines. Over the phone, Clean offers to sell Dealers Appliance
Outlet one hundred model EZ2000 washers at a price of $150 per unit. Clean says that it will keep the offer
open for ninety days. Dealers responds that within two or three weeks it will decide whether to accept. One
week later, Clean faxes, and Dealer receives, notice that the offer is withdrawn. Dealer immediately phones
Clean to accept the $150-per-unit offer. When Clean refuses to deliver at that price, Dealer files a suit. Clean
asserts, first, that there is no contract and, second, that if there is a contract, it is unenforceable. Discuss Clean's
assertions.
Clean's contention that there is no contract between it and Dealer is correct. An offeror can revoke an offer at
any time before acceptance without liability unless the offer is irrevocable. For this offer to be considered
irrevocable, Dealer would have to prove that it had an option, which requires consideration, or that the offer was
irrevocable under UCC 2-205. Neither of these applies. Dealer gave no consideration for the offer to be kept
open, and thus no option was created. And, for the offer to be irrevocable under the UCC without consideration,
Clean¾a merchant¾would have had to give assurance that the offer would remain open for ninety days in a
signed writing. Because the assurance was made orally, the offer was revocable. Thus, Dealer's receipt of
Clean's revocation (withdrawal) of the offer before Dealer's acceptance terminated the offer, and no contract
was formed.
Clean's contention that even if a contract was created, the contract is unenforceable is also correct. Under UCC
2-201, any contract for the sale of goods priced at $500 or more must be in writing, be supported by written
evidence such as a memorandum, or be the object of an applicable exception (such as written confirmation
between merchants, specially ordered or manufactured goods, admission under oath, or partial performance
completed) to be enforceable. The contract in the case presented here is for the sale of goods (washing
machines) priced at $500 or more ($15,000). It was not in writing; nor is there a writing signed by Clean that an
oral contract was formed. Also, none of the exceptions apply. Thus, even if Dealer could prove that an oral
contract had been made, the contract could not be enforced against Clean's defense of the Statute of Frauds.
72. Tune Products, Inc., offers to sell to Unlimited Sales Company one hundred MP3 players at $50 a piece,
subject to certain specific delivery dates. Unlimited replies with a signed purchase order that reads, "Accept
your offer for 100 I-appliances at $50 each. Must be delivered to our warehouse." Tune does not respond or
deliver the goods. Unlimited files a suit for breach of contract, to which Tune answers that there is no contract
because Unlimited's purchase order contained additional terms and is not signed by Tune. Can Unlimited
recover? Explain.
Yes. Additional or different terms in an unconditional acceptance, which is otherwise definite and timely, are
interpreted as proposals for additional terms to a contract, unless the contract is between merchants. In that
situation, the terms become part of the contract unless (1) the offer expressly limits acceptance to its terms, (2)
the additional terms materially alter the contract, or (3) the offeree objects to the additional terms within a
reasonable time. Here, the offer did not expressly limit the acceptance, the extra terms did not materially change
the contract, and Tune did not object within a reasonable time. If either or both of the parties is not a merchant,
a contract is formed according to the terms of the original offer. Thus, here, the additional term (delivery to
Unlimited's warehouse) would have become part of the contract even if one or both parties had not been
merchants. Tune's Statute of Frauds claim (that the purchase order was not signed by Tune) also fails. For a
contract for a sale of goods between merchants, when one party sends a written confirmation within a
reasonable time after terms have been reached orally, the confirmation is binding unless the recipient objects
within ten days of receipt. The merchant receiving the communication must have reason to know its contents,
but it needs to be signed only by the party who sends it. Here, Tune received the signed writing, but did not
object within the ten days.
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stems of the water-palm which was growing at hand in great
profusion, and answered the purpose excellently. It was, however,
partly destroyed by fire, and required great care in crossing. We
could not trust the animals on it, so we had to fall back on our rope,
and haul them across a little higher up the river, where the water was
deeper and the current consequently less violent.
Just below the bridge were a series of magnificent cascades,
which filled the air for a long distance round with their stupendous
roar. As we intended making another march that day, we went on
again after a short halt. The men had had no food for three days,
except the remains of the insignificant quantity of meat I shot a few
days before. We were therefore anxious to reach the cultivated
country in order to buy fresh supplies for them.
After a weary walk from eleven in the morning to four in the
afternoon, we were relieved to find ourselves among the shambas of
the natives. We camped beside a small stream close to a village,
and immediately opened a market, and when the natives appeared
we bought a small supply of maize and sweet potatoes, which were
at once served out to our hungry men.
CHAPTER III.
FROM THE TANA TO M’BU.