Chapter 14: Sales Test Questions Flashcard

Goods
Any moveable physical object.
Merchant
Someone who routinely deals in the particular goods involved.
UCC Statute of Frauds
The UCC requires a writing for any sales of goods priced $500 or more.
Additional Terms
Raise issues not covered in the offer.
Different Terms
Contradict those in the offer.
Gap-Fillers
UCC rules for supplying missing terms.
Conforming Goods
Satisfy the contract terms.
Cover
To reasonably obtain substitute goods because another party has not honored a contract.
Consequential Damages
Damages resulting from the unique circumstances of the injured party.
Warranty
A contractual assurance that goods will meet certain standards.
Express Warranty
A guarantee, created by the words or actions of the seller, that goods will meet certain standards.
Implied Warranties
Guarantees created by the Uniform Commercial Code and imposed on the seller of goods.
Implied Warranty of Merchantability
Goods must be of at least average, passable quality in the trade.
Implied Warranty of Fitness for a Particular Purpose
If the seller knows that the buyer plans to use the goods for a particular purpose, the seller generally is held to warrant that the goods are in fact fit for that purpose.
Disclaimer
A statement that a particular warranty does not apply.
An implied warranty that goods are fit for their ordinary purpose.
Merchantability
Generally become part of a contract between merchants.
Additional Terms
Cannot be disclaimed.
Written Express Warranties
Generally cancel each other out.
Different Terms
False
In a contract for the sale of goods, the offer may include any terms the offeror wishes; the offeree must accept on exactly those terms or reject the deal.
False
Sellers can be bound by written warranties but not by oral statements.
True
The description of products in promotional materials can create express warranties.
False
A contract for the sale of $300 worth of decorative stone must be in writing to be enforceable.
Which one of the following transactions is not governed by Article 2 of the UCC?
(B) Leasing an automobile worth $35,000
Marion orally agrees to sell Ashley her condominium in Philadelphia for $700,000. The parties have known each other for 20 years and do not bother to put anything in writing. Based on the agreement, Marion hires a moving company to pack up all her goods and move them to a storage warehouse. Ashley shows up with a cashier’s check, and Marion says, “You’re going to love it here.” But at the last minute, Marion declines to take the check and refuses to sell. Ashley sues and wins:
(A) Nothing
Seller’s sales contract states that “The model 8J flagpole will withstand winds up to 150 mph, for a minimum of 35 years.” The same contract includes this: “This contract makes no warranties, and any implied warranties are hereby disclaimed.” School buys the flagpole, which blows down six months later, in a 105-mph wind.
(C) Seller is liable because the disclaimer was invalid.
Manufacturer sells a brand-new, solar-powered refrigerator. Because the technology is new, Manufacturer sells the product “as is.” Plaintiff later sues Manufacturer for breach of warranty and wins. Plaintiff is probably:
(E) A consumer
CPA QUESTION: Which of the following conditions must be met for an implied warranty of fitness for a particular purpose to arise?

I. The warranty must be in writing.
II. The seller must know that the buyer was relying on the seller in selecting the goods.

(B) II only

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