Business Law Practice Questions Essay Example

list that CH had sent four months earlier. JHC's purchase order stated the price, quantity and terms of payment for $5,000 of hardware goods. On the back of JHC's purchase order form there were 16 numbered clauses. None of these clauses dealt with how to resolve a dispute, should one later arise. CH received the purchase order and responded with communication that had the heading "Order Confirmation". CH's order confirmation stated the same prices, quantities, and terms of payment as those contained in JHC's form. However, on the back of CH's form there was a clause that stated that if a dispute should arise over this transaction, the dispute would be resolved through arbitration. A dispute later arose.

How should it be resolved? By litigation, because CH proposed an additional term that was not incorporated into the contract. b. By litigation, because CH proposed a different term that was not incorporated into the contract. c. By arbitration, because CH proposed an additional term, that was incorporated into the contract. d. By arbitration, because CH proposed a different term, that was incorporated into the contract.

4. The most important element in determining whether a UCC sales contract has been formed is the: a. presence or absence of a price term. b. issue of whether the terms of the offer and acceptance are exactly alike. c. issue of whether the contract can be fully performed in six months or less. d. the intention of the parties to enter into a contract.

5. You enter into negotiations to buy a car from Ace Cars (AC). After extensive negotiations you and the AC salesman agree on a price of $23,000 for a

specific car on the lot. However, you explain to the salesman that you do not have the money now, but expect to get it within a week. The salesman then promises to hold that offer open for 5 days, to buy that car at that price. You ask for and receive that promise in writing, signed by the sales manager. Is AC's promise to hold its offer open for 5 days legally binding? a. No, because it is a "gift promise", made without consideration. b. No, because it fails to satisfy the requirements of an option contract. c. Yes, because that promise is a UCC firm offer that does not require consideration to be binding. d. Yes, because whenever a seller makes such a promise it is binding for a "reasonable" period of time.

6. If a seller has delivered non-conforming goods that have been rejected by the buyer, the seller has a right to cure: a. Only if the time for performance of the contract has not yet expired. b. Under some circumstances, even if the time for performance of the contract has expired. c. Only if the contract specifically allows for cure. d. Only if the seller can do so within ten days.

7. Under a shipment contract, the seller is required to do all but which of the following? a. Deliver the goods to the city of the buyer. b. Make a contract for the transportation of the goods that is reasonable given the nature of the goods and other circumstances. c. Promptly notify the buyer of the shipment.

Obtain and promptly deliver or tender to the buyer any document necessary to enable the buyer

to obtain possession of the goods from the carrier.

8. When is a buyer considered to have accepted performance regarding goods that are delivered pursuant to a contract? a. After a failure to reject following a reasonable opportunity to inspect the goods. b. After delivery of the goods. c. Only after conduct that shows the buyer's willingness to become owner of the goods. d. Only after making an express acceptance.

9. Revocation of acceptance by the buyer: a. Can occur at any time. b. Can occur without notification to the seller. . Requires a substantial nonconformity in the goods. d. Is forbidden by UCC Article 2.

10. When does risk of loss pass in a sale of goods that does not involve a common carrier or a bailment? a. Upon tender of delivery for both merchant sellers and nonmerchant sellers. b. Upon tender of delivery for merchant sellers and when goods are received by the buyer in the case of nonmerchant sellers. c. Upon tender of delivery for nonmerchant sellers and when goods are received by the buyer in the case of merchant sellers. d. When goods are received by the buyer for both merchant sellers and nonmerchant sellers.

11.Stone, a merchant in Seattle, contracted with Rose, a merchant in Rochester, for the sale of goods to be shipped by truck. The terms of the contract were "F. O. B. Seattle". Stone delivered the goods to the carrier. After leaving Seattle, the truck containing the goods was never seen again. Stone has demanded payment for the goods and Rose has refused. If Stone sues: a. Rose will win because Rose did not receive the goods. b. Rose will win

because under the UCC this was a shipment contract. c. Stone will win because Stone was not at fault in causing the loss. d. Stone will win because under the UCC this was a shipment contract.

12. Which of the following is true about the passage of title? a. It occurs at the time and place goods are shipped in a shipment contract. b. It always occurs when the goods leave the hands of the seller. c. It does not occur until the buyer indicates acceptance of the goods. d. It always passes at the same time that the risk of loss passes.

13. In a case where goods are to be transported by a carrier, what is the most important factor in determining when the risk of loss passes from the seller to the buyer? a. The contract's shipping terms. b. The buyer's insurance policy terms. c. The seller's insurance policy terms. d. When title passes.

14. Persons holding void title (and therefore no title at all) include: a. thieves b. persons who paid with a check that bounced c. people who impersonated others in order to trick the seller into selling the goods to them d. all of the above

15. Michelle sold her car to Barry, taking a personal check for $1,500. Barry knew he had nothing like $1,500 in the bank, so he drove her car straight to Al's Buick and traded it in on a new Buick and drove to Canada. Michelle tried to cash the check twice but it bounced twice. Michelle then saw "her" car at Al's car lot and went to Al's lot to demand the return of her car.

Al was

not aware of the bounced check. What will be the result? a. Al has to give Michelle the car because she has title. b. Al has to give her the car because Barry was nothing but a thief. c. Al can keep the car because Barry had the power to transfer good title to him. d. Al can keep the car because he paid for it.

16. Under the old common law rule, the risk of loss or damage to goods in a contract for the sale of those goods: a. always falls upon the buyer. b. always alls upon the seller. c. is incurred by the party who had title to the goods at the time of the loss or damage. d. always is split between the buyer and the seller.

17. If a buyer and seller agree to a contract for the sale of goods for a price of $300, which later modifications must be in writing in order to be enforceable? a. All later modifications. b. Any later modification increasing the price by $100 or more. c. Any later modification increasing the price by $200 or more. d. No later modification to such a contract needs to be in writing since the original contract did not need to be in writing.

18. For $100 each, Helen agrees with Troy Tech to knit 12 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? a. No, because each sweater only cost $100 b. No, because they are specially manufactured sweaters c. Yes, because the total cost is $1,200 d. Yes, because they are specially manufactured sweaters

19. If the time, place, and manner of delivery is not stated in a contract for the sale of goods: a. The place of delivery is the buyer's place of usiness. b. The contract is void for lack of definiteness. c. The place of delivery is the seller's place of business. d. The seller is obligated to pay for shipping to the buyer's place of business.

20. Able offered to buy automobile batteries from Baker. Able's purchase order was complete and certain as to all material terms except price, which was omitted. If Baker accepts Able's offer, and the price of the automobile batteries is well established in the industry, is there a contract between Able and Baker? a. No contract was formed between Able and Baker. b.

A contract was formed between Able and Baker only if it can be proved that the parties intended to enter a contract and that they discussed the price orally or in writing. c. A provisional contract was formed between Able and Baker, but the price will be treated as a proposed addition to the contract which must be accepted by both parties; if they do not later agree on a price, no contract will result. d. A contract was formed between Able and Baker even though the price term was omitted from their offer and acceptance.

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

a. evocation of acceptance rule b. perfect tender rule c. rules for inspection d. excuses for nonperformance

22. In which of the following areas does  of the UCC change the applicable common law rule? Firm offers. b. The amount of definiteness required of an agreement. Acceptances whose terms differ from the terms of the offer. All of the above.

23. A contract provides for both a sale of goods and a sale of services. To determine whether the UCC rules or the common law rules will apply to this transaction, the majority of states follow which test?  Statue of Frauds test.  Predominant purpose test.  Parol evidence test. d. Seller's intent test.

24. Which of the following would constitute a valid acceptance of performance? The buyer tells the seller that the nonconforming goods that were delivered will be kept and paid for. The buyer waits for nine months before notifying the seller that the goods are non-conforming. The buyer immediately resells the nonconforming goods. All the above.

25. A merchant buyer of goods receives nonconforming goods. The merchant buyer rightfully rejects and appropriately notifies the seller, but the seller has no agent in the buyer's city. The goods are perishable and threaten to decline in value speedily. The merchant buyer has no further duty to the seller other than to exercise reasonable care of the goods and to await the seller's instructions. a. True b. False

26.When the sales contract does not mention time for delivery, the seller: a. Has a reasonable time after entering the contract, to deliver the goods. Must deliver the goods on buyer’s demand. c. Has no more than 60 days, to deliver the goods.  Has no more

than 30 days, to deliver the goods.

27. Monica, a college student, agreed to sell her horse to Bill. The contract required Monica to deliver the horse on that same day to Parsing Stables where Bill was going to board the horse. Bill paid Monica the money, patted the horse, and drove off. Monica then led the horse into the trailer and set off for the two-hour drive to Parsing. Has title to the horse passed to Bill? a. No, not until delivery to Parsing. b. No, not until Bill sees the horse again. c. Yes, since Bill already paid for it. d. Yes, since the contract was made earlier in the day. 28. Which of the following is true about the passage of the title? a. It occurs at the time and place goods are shipped, in a shipment contract. b. It occurs at the time and place goods are shipped, in a destination contract. c. It does not occur until the buyer indicates acceptance of the goods. d. It always passes at the same time that the risk of loss passes.

29.In a sale of goods that do not involve a common carrier and does not involve a bailment, which of the following is most important in determining when the risk of loss passes? a. Whether the seller is a merchant. b. Whether the buyer is a merchant. c. Whether price of the goods is $500 or more. d. When the title passes. 30. Dick steals Jane's watch and later sells the watch to Sally. Jane can recover the watch from Sally: a. Under any circumstances. b. Only if Sally knew that the watch was

stolen. c. Only if Sally did not know that the watch was stolen. d. Only if Sally gave legally sufficient consideration for the watch.