Chapter 14: Sales Test Questions – Flashcards
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Goods
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Any moveable physical object.
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Merchant
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Someone who routinely deals in the particular goods involved.
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UCC Statute of Frauds
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The UCC requires a writing for any sales of goods priced $500 or more.
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Additional Terms
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Raise issues not covered in the offer.
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Different Terms
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Contradict those in the offer.
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Gap-Fillers
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UCC rules for supplying missing terms.
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Conforming Goods
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Satisfy the contract terms.
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Cover
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To reasonably obtain substitute goods because another party has not honored a contract.
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Consequential Damages
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Damages resulting from the unique circumstances of the injured party.
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Warranty
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A contractual assurance that goods will meet certain standards.
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Express Warranty
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A guarantee, created by the words or actions of the seller, that goods will meet certain standards.
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Implied Warranties
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Guarantees created by the Uniform Commercial Code and imposed on the seller of goods.
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Implied Warranty of Merchantability
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Goods must be of at least average, passable quality in the trade.
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Implied Warranty of Fitness for a Particular Purpose
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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.
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Disclaimer
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A statement that a particular warranty does not apply.
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An implied warranty that goods are fit for their ordinary purpose.
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Merchantability
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Generally become part of a contract between merchants.
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Additional Terms
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Cannot be disclaimed.
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Written Express Warranties
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Generally cancel each other out.
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Different Terms
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False
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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.
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False
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Sellers can be bound by written warranties but not by oral statements.
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True
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The description of products in promotional materials can create express warranties.
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False
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A contract for the sale of $300 worth of decorative stone must be in writing to be enforceable.
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Which one of the following transactions is not governed by Article 2 of the UCC?
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(B) Leasing an automobile worth $35,000
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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:
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(A) Nothing
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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.
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(C) Seller is liable because the disclaimer was invalid.
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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:
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(E) A consumer
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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.
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(B) II only
