Question 1

Under the UCC which of the following is true if goods are identified at the time the parties entered into a contract and these goods are partially destroyed through no fault of the parties before risk passes to the buyer or lessee?

Accepted Answer

A)   The contract is void.
B)   The buyer may inspect the goods and decide whether to (1)  treat the contract as void or (2)  ask the seller for a reduction of the contract price and then accept the damaged goods.
C)   The seller may inspect the goods and decide whether to (1)  treat the contract as void or (2)  offer the buyer a reduction of the contract price for the damaged goods.
D)   Unless the parties can agree on a price, the matter must be submitted to arbitration for a determination as to an appropriate price.
E)   Unless the parties can agree on a price, the contract is voidable at the option of the seller.F) A) and C)
G) A) and E)

Question 2

Which of the following is true regarding Penny's claim that the UCC imposes no obligation of good faith conduct?

Accepted Answer

A)   Penny is correct in this instance because while the UCC generally imposes a duty of good faith, that duty is inapplicable during the initial 30 days after a purchase when a buyer has the right to revoke acceptance for a good or a bad reason.
B)   Penny is correct in this instance because while the UCC generally imposes a duty of good faith, that duty is inapplicable in relation to third-party financing.
C)   Penny is correct only if she can establish that the goods were overpriced resulting in the right to disregard any obligation of Good Wood.
D)   Penny is correct only if she can establish that Good Wood Furniture itself failed to act in good faith.
E)   Penny is incorrect.F) C) and D)
G) B) and D)

Question 3

A buyer who has accepted goods may later revoke the acceptance if the buyer can show that the defects substantially impair the value of the goods.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is the correct regarding Good Wood's contention that the duty of good faith is imposed on all parties equally?

Accepted Answer

A)   Good Wood is incorrect because the UCC imposes no duty of good faith.
B)   Good Wood is incorrect because the UCC mandated duty of good faith requires honesty in fact in regard to all transactions regardless of the parties involved.
C)   Good Wood is incorrect because the UCC mandated duty of good faith imposes a higher duty than honesty of fact in regard to sellers, that of reasonable negotiation considering the position of buyers.
D)   Good Wood is incorrect because the UCC mandated duty of good faith imposes a higher duty than honesty of fact in transactions involving amounts in excess of $500, that of reasonable conduct considering all circumstances.
E)   Good Wood is incorrect because the UCC mandated duty of good faith imposes a higher duty than honesty in fact on merchants, that of reasonable commercial standards of fair dealing.F) A) and B)
G) A) and C)

Question 5

The right to cure refers to the right to fix errors in a contractual agreement,such as typographical errors.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is true regarding the claim of Good Wood that Penny failed to properly reject the goods?

Accepted Answer

A)   Good Wood is incorrect because under the UCC Penny had 30 days in which to reject the goods.
B)   Good Wood is incorrect only if Penny can establish that Let Us Help You miscalculated the amount of interest she owed.
C)   Good Wood is incorrect only if Penny can show that the goods were overpriced.
D)   Good Wood is correct only if Good Wood can show that the goods were priced at reasonable market value.
E)   Good Wood is correct.F) A) and B)
G) A) and C)

Question 7

Should the perfect tender rule be rejected as a matter of law and replaced with the concept of substantial performance?

Accepted Answer

Student responses will vary.In favor of ...

Question 8

A buyer who has accepted goods may later revoke the acceptance if the buyer can show that the defects _____ the value of the goods.

Accepted Answer

A)   Reduced in any manner
B)   Reduced by 10%
C)   Reduced by 5%
D)   Substantially impaired
E)   Violated the perfect tender ruleF) A) and B)
G) All of the above

Question 9

Which of the following is the most likely result if Bruce claims he had reasonable grounds to believe the trophies were acceptable?

Accepted Answer

A)   He would be correct because Bruce's payment by check for the goods upon their delivery provided Bobby with a measure of reliance that they would be acceptable.
B)   He would be incorrect because Bruce did not confirm in writing that the trophies were acceptable.
C)   He would be incorrect because Bruce did not confirm orally or in writing that the trophies were acceptable.
D)   He would be correct because of the special UCC exception for sports-related items.
E)   He would be correct because of the special UCC exception for school-related items.F) B) and D)
G) None of the above

Question 10

Which of the following governs the inspection process?

Accepted Answer

A)   The seller has an absolute right to dictate the date, time, and method of inspection.
B)   The buyer has an absolute right to dictate the date, time, and method of inspection.
C)   The seller has an absolute right to dictate the date and time of inspection, but the buyer has the right to dictate the method of inspection.
D)   The buyer has an absolute right to dictate the date and time of inspection, but the seller has the right to dictate the method of inspection.
E)   The inspection must take place at a reasonable time and place, in a reasonable way.F) B) and E)
G) A) and B)

Question 11

Is Frank correct in that he has a right to remedy and fix the problem?

Accepted Answer

A)   No, the UCC does not provide a party with the right to fix any problem.
B)   No, while the UCC provides a party with the right to fix some problems, the problems with the T-shirts were too serious to afford Frank that right.
C)   Yes, but only if he can provide correctly worded T-shirts by the next day, the last day set for performance.
D)   Yes, Frank has up to 10 days under the UCC to fix any problem.
E)   Yes, Frank has up to 20 days under the UCC to fix any problem.F) A) and B)
G) A) and C)

Question 12

Sometimes language in the parties' agreement limits the rigidity of the perfect tender rule.

Accepted Answer

A) True 
 B)False

Question 13

Under the UCC a delay in delivery or nondelivery,in whole or in part,is not a breach in circumstances in which performance has been made ______ because a contingency has occurred that was not contemplated when the parties reached the agreement.

Accepted Answer

A)   Unreasonable
B)   Unprofitable
C)   Less profitable
D)   Impracticable
E)   More difficultF) D) and E)
G) B) and C)

Question 14

Which of the following was the result in the "Case Opener" in which Vitol sued Koch Petroleum for delivering oil one day late causing Vitol to sustain a loss based on its sale to another entity?

Accepted Answer

A)   The court ruled that Koch Petroleum had substantially performed and that Vitol could not recover.
B)   The court ruled that Koch Petroleum had materially performed and that Vitol could not recover.
C)   The court ruled that Koch Petroleum had committed fraud in that the delay was intentional and that Vitol could recover.
D)   The court ruled that Koch Petroleum had violated the perfect tender rule and that Vitol could recover.
E)   The court ruled that both parties were in the wrong and that damages would be split between the two.F) A) and B)
G) A) and D)

Question 15

A common law rule known as the ______ required that the seller deliver goods in conformity with the terms of the contract,down to the last detail.

Accepted Answer

A)   Tender of offer regulation
B)   Superior delivery rule
C)   Certain tender rule
D)   Regulatory rule
E)   Perfect tender ruleF) C) and D)
G) A) and B)

Question 16

Good faith in relation to transactions between parties who are not merchants means ____.

Accepted Answer

A)   Honesty in fact
B)   Honesty in law
C)   Honesty in fact and also reasonable commercial standards of fair dealing
D)   Honesty in law and also reasonable commercial standards of fair dealing
E)   Honesty in fact and honesty in lawF) A) and B)
G) A) and C)

Question 17

Which of the following occurs when all the material elements of a contract are satisfied even if some nonmaterial requirements may not be satisfied?

Accepted Answer

A)   Substantial tender
B)   Perfect tender
C)   Substantial performance
D)   Perfect performance
E)   Adequate tenderF) C) and D)
G) B) and C)

Question 18

Under the UCC,buyers and lessees are obligated to accept and pay for conforming goods in accordance with the contract.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is true under the UCC regarding the right of a seller or lessor to presume acceptance?

Accepted Answer

A)   Sellers and lessors do not have the right to presume acceptance.
B)   The seller may presume acceptance if the buyer fails to reject goods within 48 hours, but the lessor may not presume acceptance.
C)   The lessor may presume acceptance if the lessee fails to reject goods within 48 hours, but the seller may not presume acceptance.
D)   Both lessors and sellers may presume acceptance if buyers or lessees fail to reject good within 48 hours.
E)   Both lessors and sellers may presume acceptance if buyers or lessees fail to reject good within a reasonable period of time.F) B) and E)
G) B) and D)

Question 20

Which of the following is true regarding any right of inspection in regard to lessees?

Accepted Answer

A)   The UCC provides for no right of inspection for lessees, and the right of inspection is only available to the lessor if it is provided for by contract.
B)   The UCC provides for a right of inspection in regard to perishable items for lessees, but not otherwise.
C)   The UCC provides for a right of inspection in regard to fragile items for lessees, but not otherwise.
D)   The UCC provides for a right of inspection if the lessor and lessee have previously had disputes in regard to shipments, but not otherwise.
E)   The UCC provides for a right of inspection for lessees.F) All of the above
G) A) and B)

Exam 23: Performance and Obligations Under Sales and Lease Contracts

Is Frank correct in that he has a right to remedy and fix the problem?

Correct AnswerverifiedShow Answer

Under the UCC,buyers and lessees are obligated to accept and pay for conforming goods in accordance with the contract.

Correct AnswerverifiedShow Answer

Which of the following occurs when all the material elements of a contract are satisfied even if some nonmaterial requirements may not be satisfied?

Correct AnswerverifiedShow Answer

A buyer who has accepted goods may later revoke the acceptance if the buyer can show that the defects substantially impair the value of the goods.

Correct AnswerverifiedShow Answer

Which of the following was the result in the "Case Opener" in which Vitol sued Koch Petroleum for delivering oil one day late causing Vitol to sustain a loss based on its sale to another entity?

Correct AnswerverifiedShow Answer

A buyer who has accepted goods may later revoke the acceptance if the buyer can show that the defects _____ the value of the goods.

Correct AnswerverifiedShow Answer

Under the UCC which of the following is true if goods are identified at the time the parties entered into a contract and these goods are partially destroyed through no fault of the parties before risk passes to the buyer or lessee?

Correct AnswerverifiedShow Answer

Which of the following is true regarding Penny's claim that the UCC imposes no obligation of good faith conduct?

Correct AnswerverifiedShow Answer

Which of the following is the most likely result if Bruce claims he had reasonable grounds to believe the trophies were acceptable?

Correct AnswerverifiedShow Answer

Which of the following is true under the UCC regarding the right of a seller or lessor to presume acceptance?

Correct AnswerverifiedShow Answer

Which of the following is true regarding the claim of Good Wood that Penny failed to properly reject the goods?

Correct AnswerverifiedShow Answer

The right to cure refers to the right to fix errors in a contractual agreement,such as typographical errors.

Correct AnswerverifiedShow Answer

Which of the following is true regarding any right of inspection in regard to lessees?

Correct AnswerverifiedShow Answer

Which of the following is the correct regarding Good Wood's contention that the duty of good faith is imposed on all parties equally?

Correct AnswerverifiedShow Answer

Under the UCC a delay in delivery or nondelivery,in whole or in part,is not a breach in circumstances in which performance has been made ______ because a contingency has occurred that was not contemplated when the parties reached the agreement.

Correct AnswerverifiedShow Answer

Good faith in relation to transactions between parties who are not merchants means ____.

Correct AnswerverifiedShow Answer

Sometimes language in the parties' agreement limits the rigidity of the perfect tender rule.

Correct AnswerverifiedShow Answer

A common law rule known as the ______ required that the seller deliver goods in conformity with the terms of the contract,down to the last detail.

Correct AnswerverifiedShow Answer

Which of the following governs the inspection process?

Correct AnswerverifiedShow Answer

Should the perfect tender rule be rejected as a matter of law and replaced with the concept of substantial performance?

Correct AnswerverifiedStudent responses will vary.In favor of ...View AnswerShow Answer

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Student responses will vary.In favor of ...
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