CHAPTER 15
Formation of Sales and Lease Contracts
MULTIPLE-CHOICE QUESTIONS
Circle the letter of the best answer.
1.Under Article 2 of the UCC, a firm offer will be created only if the
a.offeree is a merchant.
b.offeree gives consideration to the offerer.
c.offer is made by a merchant in a signed writing.
d.the offerer states the time period during which it will remain open.
2.Cuomo, owner of a large men’s retail store, signed a written contract to purchase 100 dozen ties at $60 a dozen from the Gem Wholesale Company. The ties were shipped, and Cuomo paid the $6,000 due. Gem then sued Cuomo for an additional $300 and, at the small claims court hearing, testified that Cuomo had agreed orally to pay an additional $3 a dozen. The judge held the evidence inadmissible because
a.all contracts must be in writing to be enforceable.
b.written contracts cannot be modified at the will of the parties.
c.a contract of guaranty must be in writing to be enforceable.
d.evidence of an oral agreement that contradicts a written contract is inadmissible.
3.Berry entered into an oral agreement over the phone with a book club to purchase a book a month for $19.95 per book. After he had received and accepted one book, he decided to cancel the contract. Under the contract, Berry is liable for
a.the full contract price for one year.
b.none of the contract price.
c.the cost of one book.
d.the cost of two books.
4.A contract for the sale of goods costing $500 or more can be made orally if
a.the agreement is executory.
b.the buyer deposits at least $100.
c.the buyer receives and accepts the goods.
d.the goods are intangible.
5.Lopez orally agreed to buy some computer equipment from the Soyota Computer Co. for $2,000. When the company shipped the equipment, which consisted of several items, Lopez decided to accept and pay for only two items. Lopez legally is obligated to pay for
a.only the equipment he accepted.
b.all of the equipment he agreed to buy.
c.the equipment he accepted plus half of the remainder of the order.
d.none of the equipment.
6.Under the UCC, the sale of goods involves
a.real property.
b.real and personal property.
c.personal property.
d.items attached to real property only.
7.Which of the following contracts is not covered by Article 2 of the UCC?
a.a contract for the sale of goods that have been specially manufactured
b.a contract for the sale of a computer
c.a contract for the sale of growing crops
d.a contract for services
8.O’Brien paid $600 cash for a color television at a local retail store. O’Brien did not sign a memorandum for the sale. In this case, he
a.can avoid the agreement because contracts for the sale of goods costing $500 or more must be in writing to be enforceable.
b.can avoid the agreement because a memorandum is required for all sales of merchandise.
c.cannot avoid the agreement because the contract need not be in writing when the buyer has paid in full for the goods.
d.cannot avoid the agreement because it involves specially manufactured goods.
9.Under Article 2 of the UCC, which of the following statements is correct?
a.Merchants and non-merchants are treated alike.
b.The contract must involve the sale of goods for a price of more than $500.
c.The obligations of the parties to the contract must be performed in good faith.
d.The mirror image rule applies when an acceptance to an offer is required.
10.The UCC requires that the parties to every contract
a.place their agreement in writing.
b.state a price in their agreement that is acceptable to both the buyer and the seller.
c.act in good faith.
d.be merchants.