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Exam 21: Introduction to Sales and Lease Contracts

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Question 21

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Which of the following statements is true regarding merchants under the UCC?

A) The UCC has different rules for transactions involving merchants and transactions involving nonmerchants, however merchants and non-merchants are generally held to the same standard of care and behavior.
B) Although the UCC applies the same rules for transactions involving merchants and transactions involving nonmerchants, merchants are generally held to a high standard of care and behavior than nonmerchants.
C) Under the UCC, merchants and nonmerchants are sometimes treated differently, however, they are both held to the same standard of care and behavior.
D) The UCC has different rules for transactions involving merchants and transactions involving nonmerchants, and merchants are generally held to a high standard of care and behavior than nonmerchants.
E) There is no distinction between merchants and nonmerchants under the UCC.

F) A) and E)
G) None of the above

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Question 22

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The UCC was designed to include items such as software and information.

A) True
B) False

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Question 23

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The UCC is divided into sections known as rules of law.

[Lucky Morton] Morton, who owns 500 acres of land in east Texas, has just discovered oil under his property. He calls OilEx, who wants to buy all of the oil from Morton's property. Morton is thrilled about the money he will make from selling the oil and he signs a contract allowing OilEx to set up a drilling station on his property. Thinking he can get more money off his land, Morton cuts down all of his trees with a chainsaw and then sells them to PaperCo to be made into paper. Meanwhile, Morton's neighbor offers to buy Morton's wheat crop after it is harvested in the Fall, and Morton agrees. -Is Morton's contract for PaperCo to purchase his trees covered by the UCC?

Under the UCC, almost any kind of documentation is usually sufficient to satisfy the writing requirement of the statute of frauds.

Describe a finance lease and explain how it is different from a regular lease contract.

[Lucky Morton] Morton, who owns 500 acres of land in east Texas, has just discovered oil under his property. He calls OilEx, who wants to buy all of the oil from Morton's property. Morton is thrilled about the money he will make from selling the oil and he signs a contract allowing OilEx to set up a drilling station on his property. Thinking he can get more money off his land, Morton cuts down all of his trees with a chainsaw and then sells them to PaperCo to be made into paper. Meanwhile, Morton's neighbor offers to buy Morton's wheat crop after it is harvested in the Fall, and Morton agrees. -Is Morton's contract with OilEx likely covered by the UCC?

The UCC is divided into sections known as ________.

Unconscionability is a concept recognized by the UCC.

In a finance lease, the lessor does not select, manufacture, or supply the goods. Rather, the lessor ________.

Which of the following is true when Article 2 is silent on issues of sales contract formation or interpretation?

[Carpet Woes] Joaquin went shopping at ABC Carpet. He saw some carpet he liked but could not make up his mind. The manager at ABC Carpet wrote down the proposed purchase price for him along with a statement that the price would be good for three months. Two months later, Joaquin went back to ABC Carpet to purchase the carpet. Unfortunately, the price had gone up. Joaquin showed the manager his writing and guaranteed price, but the manager said that the offer was no longer good. Frustrated with ABC Carpet, Joaquin decided to purchase his carpet from XYZ Carpet, and he also contracted with XYZ to do the installation. Unfortunately, Joaquin almost immediately started to have problems with the carpet. Joaquin told the sales manager for XYZ Carpet that he was planning on bringing a suit for breach of warranty. The sales manager, however, told him that breach of warranty provisions only applied to sales of goods and that the carpet purchase was for installation, a service. -What kind of offer did the manager at ABC Carpet make to Joaquin?

Which article of the UCC governs sales contracts?

[Carpet Woes] Joaquin went shopping at ABC Carpet. He saw some carpet he liked but could not make up his mind. The manager at ABC Carpet wrote down the proposed purchase price for him along with a statement that the price would be good for three months. Two months later, Joaquin went back to ABC Carpet to purchase the carpet. Unfortunately, the price had gone up. Joaquin showed the manager his writing and guaranteed price, but the manager said that the offer was no longer good. Frustrated with ABC Carpet, Joaquin decided to purchase his carpet from XYZ Carpet, and he also contracted with XYZ to do the installation. Unfortunately, Joaquin almost immediately started to have problems with the carpet. Joaquin told the sales manager for XYZ Carpet that he was planning on bringing a suit for breach of warranty. The sales manager, however, told him that breach of warranty provisions only applied to sales of goods and that the carpet purchase was for installation, a service. -Which of the following is true in most states regarding whether the UCC applies to the contract Joaquin had with XYZ Carpet?

Which of the following was offered as a treaty that countries could sign in order to indicate their willingness to allow this treaty to govern international business-to-business sales contracts?

Which of the following is true regarding what meets the UCC definition of a good?

Under the UCC, if a court discovers that a contract or lease provision or the contract or lease as a whole is unconscionable, the court can ________.

[Cookware Crisis] Aranda owns Aranda's Cooking, a cooking supply company which sells high quality cookware to restaurants and specialty stores. Aranda stopped at a potential customer, Rita's Restaurant, to show Rita a new, elite line of copper cookware, bakeware, and utensils. Rita told Aranda she wanted to buy the entire cookware line for the stated price of $5,000, but needed time to think about the other items. The following day, Rita called Aranda and told her to add the line of bakeware Rita had quoted for $5,000 and the line of utensils. The next week, Aranda delivered the entire cookware line, and said she would return the next day to drop off the bakeware and utensils and pick up a check for $12,000 which included $5,000 for the bakeware and $2,000 for the utensils. Rita was outraged at the price of the utensils and told Aranda not to deliver the utensils because there was no agreement about them. Aranda tells Rita that she agreed to buy the utensils and there is a valid contract, and that she expects full payment when she returns the next day. Rita responds that the addition of the utensils was only a counteroffer, which was not accepted by Rita and there is nothing in writing, and therefore there is no contract. Aranda delivers the bakeware and utensils the following day. -Is Rita correct that her statement to add the utensils did not constitute acceptance?

What is required in order for an offer to be considered a firm offer under the UCC? If a firm offer is silent as to time, what is the effect? Compare this effect with the result of silence as to time under the common law.

[Cookware Crisis] Aranda owns Aranda's Cooking, a cooking supply company which sells high quality cookware to restaurants and specialty stores. Aranda stopped at a potential customer, Rita's Restaurant, to show Rita a new, elite line of copper cookware, bakeware, and utensils. Rita told Aranda she wanted to buy the entire cookware line for the stated price of $5,000, but needed time to think about the other items. The following day, Rita called Aranda and told her to add the line of bakeware Rita had quoted for $5,000 and the line of utensils. The next week, Aranda delivered the entire cookware line, and said she would return the next day to drop off the bakeware and utensils and pick up a check for $12,000 which included $5,000 for the bakeware and $2,000 for the utensils. Rita was outraged at the price of the utensils and told Aranda not to deliver the utensils because there was no agreement about them. Aranda tells Rita that she agreed to buy the utensils and there is a valid contract, and that she expects full payment when she returns the next day. Rita responds that the addition of the utensils was only a counteroffer, which was not accepted by Rita and there is nothing in writing, and therefore there is no contract. Aranda delivers the bakeware and utensils the following day. -Is Rita correct that there is no contract because there is nothing at all in writing?