PRACTICE QUESTIONS FOR EXAM 4
Multiple ChoiceIdentify the letter of the choice that best completes the statement or answers the question.
/ 1. / Northwest Wood Products Company agrees to buy the timber on Owen's land. Northwest is to cut and haul away the timber. This deal is governed by
a. / real property law only.
b. / the UCC only.
c. / real property law and the UCC.
d. / none of the above.
/ 2. / Fred, the owner of Fred's Bicycle Store, sells a preowned motorcycle to Gail. Fred is a merchant for purposes of the UCC if he
a. / enjoys riding motorcycles on weekends.
b. / has sold bicycles for at least one year.
c. / holds himself out by occupation as having knowledge and skill unique to motorcycles.
d. / subscribes to Motorcycle Monthly magazine.
/ 3. / Bart and Paula enter into a sales contract. As seller and buyer, Bart and Paula
a. / are bound to the specific contractual provisions set out in the UCC.
b. / may alter the specific contractual provisions set out in the UCC only to a reasonable degree.
c. / may alter the specific contractual provisions set out in the UCC to whatever degree they wish as long as they don't get caught.
d. / may establish whatever terms they wish.
/ 4. / Amy and Builders Corporation enter into a contract in which Amy agrees to deliver cement to Builders at a construction site. They neglect to include a price in the agreement. A court will
a. / determine a reasonable price for the cement and insert it into the contract.
b. / leave the parties in the position in which it found them.
c. / refuse to enforce the agreement.
d. / select the lowest quoted price for cement and insert it into the contract.
/ 5. / Carl and Donna sign a contract for a sale of goods. Carl is to set the price for the goods at the time of delivery, but on delivery, refuses to do so. Donna may
a. / fix a reasonable price only.
b. / treat the contract as canceled only.
c. / fix a reasonable price or treat the contract as canceled.
d. / none of the above.
/ 6. / Ron and Wolf form a contract in which no mention is made of how the goods are to be delivered. In general, the UCC will require that the delivery take place at
a. / the seller's place of business.
b. / the buyer's place of business.
c. / either the seller's or the buyer's place of business.
d. / none of the above.
/ 7. / Kate contracts to buy tea from Tasty Tea Company but does not specify an exact amount of tea. Tasty later breaches the contract. Kate will probably be
a. / able to enforce the agreement against Tasty for failing to sell Kate its output.
b. / able to enforce the agreement against Tasty for failing to supply Kate's requirements.
c. / unable to enforce the agreement only if Tasty's breach is material.
d. / unable to enforce the agreement under any circumstances.
/ 8. / Best Music, Inc. offers to buy from Sound Products Corporation (SPC) 1,000 blank CDs of a certain brand. Without notifying Best, SPC timely ships CDs of a different brand. This shipment is
a. / an acceptance of Best's offer.
b. / a breach of the parties' contract.
c. / an acceptance and a breach.
d. / none of the above.
/ 9. / Lois offers to sell Clark fifty bushels of corn. Clark responds, "I agree to purchase fifty bushels only if the corn is Grade A quality." In these circumstances
a. / a contract is formed.
b. / a contract is formed only if Lois can secure fifty bushels of Grade A corn quickly.
c. / Clark's statement is a counteroffer.
d. / Clark's statement is an acceptance.
/ 10. / National Products, Inc. sends its standard order form to Interstate Distribution Corporation (IDC) to evidence a sale of packing materials. IDC responds with its own standard purchase order form. Additional terms in the purchase order automatically become part of the contract unless
a. / they materially alter the original contract.
b. / the original offer expressly required acceptance of its terms.
c. / the offeror objects to the new terms within a reasonable period of time.
d. / any of the above.
/ 11. / Standard Clothing, Inc. sells coats to Town Styles under an existing contract. Due to increasing textile costs, Standard asks Town to agree to a 10 percent increase in the price. Town agrees but later tries to cancel the contract. Town
a. / may cancel the contract on reasonable notice.
b. / may cancel the contract without notice.
c. / will be liable for breaching the contract if Town cancels it.
d. / none of the above.
/ 12. / 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. / usage of trade.
c. / course of performance.
d. / none of the above.
/ 13. / Best Foods Company agrees to sell Consolidated Grocery Stores, Inc. 1,000 cases of beans. Before any interest in specific cases of beans can pass from Best to Consolidated, the beans must be
a. / in existence only.
b. / identified as the specific goods designated in the contract only.
c. / in existence and identified as the goods in the contract.
d. / none of the above.
/ 14. / Mountain Bikes, Inc. and Local Bicycle Store contract for a sale of seventy bicycles from Mountain to Local. Unless the contract states otherwise, it is assumed this is
a. / a shipment contract.
b. / a destination contract.
c. / a shipment contract and a destination contract.
d. / none of the above.
/ 15. / A contract between Fresh Fruit Corporation and Green Grocer, Inc. requires Fresh Fruit to deliver goods to Green Grocer's place of business. This is
a. / a bill of lading.
b. / a destination contract.
c. / a shipment contract.
d. / a warehouse receipt.
/ 16. / 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.
/ 17. / Fran leaves a pair of recently purchased shoes at a shoe store so that they might be dyed for a wedding. The shoe store accidentally sells Fran's shoes to Jan, who has no knowledge that the shoes belong to someone else. Fran can recover from
a. / Jan for the return of the shoes but she cannot recover from the shoe store because it made an honest mistake.
b. / the shoe store for the purchase price of the shoes but cannot recover from Jan because she had no knowledge that the shoes were owned by Fran.
c. / both the shoe store and Jan.
d. / none of the above.
/ 18. / Chris in New York purchases chocolate from Sweet Candies in Los Angeles. The parties agree that Sweet will bear the risk of loss while the goods are in transit. The chocolate is destroyed near Chicago while aboard a carrier. The loss is suffered by
a. / Chris.
b. / Sweet.
c. / the carrier.
d. / both a and b.
/ 19. / Home Furnishings Store buys furniture from National Furniture Company. The parties agree that the furniture will be shipped F.O.B. National's warehouse. The furniture is destroyed after being put aboard Open Transport Corporation, a carrier. The loss is suffered by
a. / Home Furnishings.
b. / National Furniture.
c. / Open Transport.
d. / none of the above.
/ 20. / Fresh Breakfast Restaurant buys 100 bags of oranges from Sweet Citrus Company. The parties agree to ship the oranges F.O.B. Fresh Breakfast via Total Trucking Company. The oranges rot in transit. The loss is suffered by
a. / Fresh Breakfast.
b. / Sweet Citrus.
c. / Total Trucking.
d. / none of the above.
/ 21. / Fine Textiles Corporation in New Jersey sells fifty tons of fabric to Good Clothing, Inc., in Ohio, F.O.B. New Jersey. The cost of transporting the fabric to Ohio will be paid by
a. / Fine Textiles.
b. / Good Clothing.
c. / New Jersey.
d. / none of the above.
/ 22. / Lee purchases a bicycle from his brother, Kim, who is a used car dealer. Kim agrees to keep the bike at his house until Lee picks it up. A tree falls on Kim's garage and destroys the bike. The loss is suffered by
a. / Lee.
b. / Kim.
c. / both a and b.
d. / none of the above.
/ 23. / Alan buys a bicycle from Bike-a-Rama. Bike-a-Rama agrees to keep the bike for Alan until he picks it up. Bike-a-Rama is burned to the ground by an arsonist and the bike is destroyed. The loss is suffered by
a. / Alan only.
b. / Bike-a-Rama only.
c. / Alan and Bike-a-Rama.
d. / none of the above.
/ 24. / Richie Diamonds ships an assortment of high-grade gems to Pell, a retailer, with the understanding that Pell will be billed for any gems that are not returned within three months. The agreement between Richie and Pell is
a. / a sale on approval.
b. / a sale or return.
c. / a consignment.
d. / none of the above.
/ 25. / Ron orders a shipment of black coats from Burley Clothing. Burley ships blue coats instead. Ron rejects the coats, but they are destroyed in a fire on their return to Burley. The loss is suffered by
a. / Ron because he wrongfully rejected the shipment.
b. / Ron because he selected the carrier on which the coats were destroyed.
c. / Burley because it shipped nonconforming goods.
d. / Burley because Ron never accepted the blue coats.
/ 26. / Circuit Electronics, Inc. accepts a shipment of CD players from Delta Devices, Inc. When Circuit later discovers a defect in the players, it revokes acceptance. The players are destroyed before they are returned to Delta. The loss is suffered by
a. / Circuit.
b. / Delta.
c. / Circuit and Delta equally.
d. / none of the above.
/ 27. / Business Office Corporation (BOC) orders five inkjet printers from Computer Products, Inc. (CPI), to be delivered by CPI. Before CPI's truck arrives with the goods, BOC tells CPI it will not pay. The printers are destroyed in transit. The loss is suffered by
a. / BOC only.
b. / BOC to the extent of a deficiency in CPI's insurance coverage only.
c. / BOC and CPI equally.
d. / CPI only.
/ 28. / Tasty Restaurant orders five gallons of butter from Discount Suppliers. Discount ships five gallons of margarine by mistake. Tasty decides to keep the margarine, in spite of its nonconformity with the contract. The destruction of the margarine in a fire at Tasty that same day will result in
a. / Discount bearing the loss, because it shipped nonconforming goods.
b. / Discount bearing the loss, because it failed to notify Tasty of the nonconformity before shipping the margarine.
c. / Tasty bearing the loss, because it accepted delivery of the margarine.
d. / Tasty bearing the loss, because it had the power to send the margarine back before it was destroyed.
/ 29. / Medico contracts for a sale of medical equipment to Children's Hospital. For Medico to tender delivery of goods, Medico must
a. / only give the hospital notice to enable it to take delivery.
b. / only hold conforming goods at the hospital's disposal.
c. / give the hospital notice and hold the goods at its disposal.
d. / none of the above.
/ 30. / Sue agrees to sell Tad fifty bales of cotton, but they fail to specify in the contract where the goods are to be delivered. If Tad is expected to pick the goods up, then the place of delivery is
a. / Sue's place of business.
b. / Tad's place of business.
c. / a third party's place of business.
d. / none of the above.
/ 31. / Carl contracts for a sale of restaurant supplies to Diners Cafe under a shipment contract. Carl must
a. / only make a reasonable contract for the transportation of the goods.
b. / only tender to Diners whatever documents are needed to obtain possession of the goods.
c. / make a reasonable contract for the transportation of the goods and tender to Diners documents needed to obtain possession.
d. / none of the above.
/ 32. / National Cable Company delivers to International Communications Corporation goods that are slightly nonconforming to their contract. If the time for performance has passed, International can reject the goods
a. / entirely, due to the perfect tender rule.
b. / only if International honestly believes that the nonconformity is significant.
c. / only if prompt notice is given in writing to National.
d. / only with National's consent.
/ 33. / Food Packages, Inc. agrees to sell 50,000 6-ounce yogurt containers to Great Dairy Company. Food can obtain only 20,000 of the 6-ounce containers, but also ships 30,000 more expensive 8-ounce containers for the same price. Under these circumstances
a. / notice to Great of Food's intent to cure will give it a reasonable time to obtain the other 6-ounce containers.
b. / Great may reject the delivery.
c. / both a and b.
d. / none of the above.
/ 34. / Professional Products Company contracts to deliver emergency medical supplies to Rescue & Relief Corporation using only Sky Airways. If Sky declares bankruptcy, then
a. / only Rescue& Relief may elect to perform the contract.
b. / Professional may deliver the goods in any reasonable manner.
c. / Sky must designate a substitute carrier.
d. / the entire contract is void.
/ 35. / Construction Supplies, Inc. sells to companies around the world. Which of the following events would probably not excuse Construction Supplies from a contract on the grounds of commercial impracticability?
a. / Armed insurrection
b. / Increased cost resulting from inflation
c. / Sudden, severe shortage of raw material
d. / Tornado
/ 36. / Gamma Company contracts to provide several manufacturers with tin. A cartel of tin-producing countries embargoes future shipments of tin to Gamma so that it cannot fulfill its contracts. Gamma
a. / can substitute some other material for the tin.
b. / is excused from the performance of its contracts.
c. / is liable for breach of contract.
d. / must still supply the tin needs of its customers.
/ 37. / Orchard Farms contracts with four food companies to sell its entire crop of oranges. Orchard loses half of the crop to an unexpected insect infestation. Orchard must
a. / apportion its surviving crop fairly among its customers.
b. / breach some of its contracts.
c. / buy elsewhere as many oranges as needed to satisfy its contracts.
d. / substitute other fruit for the oranges.
/ 38. / National Costume Company (NCC) agrees to sell theatrical costumes to the Shakespeare Drama Festival. After the goods are identified to the contract but before the risk of loss passes to the Festival, the costumes are partially destroyed by fire. Neither NCC nor the Festival was responsible for the fire. The Festival may
a. / accept the goods at a reduced price.
b. / cancel the contract.
c. / either a or b.
d. / none of the above.
/ 39. / Alex agrees to sell Tina a certain quantity of unique glassware that is identified to the contract. The glass is destroyed, through no fault of either party, before the risk of loss passes to Tina. Who is excused from further performance?
a. / Alex only
b. / Tina only
c. / Both Alex and Tina
d. / None of the above
/ 40. / Eagle Manufacturing Company prepares to ship goods to Fine E-tailers, Inc. per Fine's purchase order. Fine is generally required to
a. / accept the goods if they conform to the contract.
b. / demand adequate assurances if Eagle indicates that it may be unable to perform.
c. / inspect the goods that Fine receives.
d. / reject the goods if they do not conform to the contract.
/ 41. / ABC Games Company orders plastic game pieces from Best Plastics, Inc. If some of the pieces conform, and some do not conform, to the terms of the contract, ABC
a. / must accept the entire shipment.
b. / must reject the entire shipment of goods.
c. / may accept part of the shipment and reject part.
d. / none of the above.
/ 42. / Eve contracts for a sale of surveying tools to Cambridge Company. If the tools fail to conform to the terms and conditions of the contract, Cambridge may
a. / accept the entire shipment.
b. / reject the entire shipment.
c. / accept any part of the shipment and reject any other part.
d. / all of the above.
/ 43. / Margaret contracts to deliver fifty tables to the Furniture Warehouse on May 1. She calls Furniture on April 15 to notify them that she is going to cancel the contract because her workers have gone on strike. Furniture may
a. / for a commercially reasonable time await Margaret's performance.
b. / sue Margaret for breach of contract.
c. / suspend its own performance.
d. / all of the above.
/ 44. / Best Products, Inc. agrees to ship seven cases of CDs to ComputerCity. A valid acceptance of the goods occurs if ComputerCity
a. / expressly accepts the CDs by words or conduct.
b. / fails to reject the CDs after having had a reasonable time to inspect them.
c. / performs an act inconsistent with Best's ownership of the CDs.
d. / all of the above.
/ 45. / Quality Equipment Company contracts for a sale of goods to Regional Sales Corporation. Quality can enforce its right to payment
a. / only after Regional has actually inspected the goods.
b. / only after Regional has had an opportunity to inspect the goods.
c. / only before Regional has inspected the goods.
d. / whether or not Regional has had the chance to inspect the goods.
/ 46. / American Goods, Inc. contracts to sell t-shirts to All-Mart Outlet Stores. American Goods can cancel the contract
a. / only if All-Mart wrongfully rejects or revokes acceptance of the goods.
b. / only if All-Mart fails to make payment or repudiates the contract.
c. / both a and b.
d. / none of the above.
/ 47. / Alan contracts with Burt for the sale of fifty cases of soft drinks. If either party breaches the contract, the nonbreaching party is entitled to
a. / the amount that could be recouped through cover, without more.
b. / the benefits he would have received if the contract had been performed.
c. / the cost to restore him to the position he was in before the contract.
d. / the lost profits, plus the profits that would have been earned by the breaching party.
/ 48. / Lyle contracts to sell sweaters to Style Clothing Stores. Before the sweaters are delivered, Style indicates that it will not be able to pay. Lyle can