Question 1

Mary sells handmade earrings for a living. Susan is a new lawyer and a friend of Mary who gives legal advice to Mary in return for earrings. Susan tells Mary that under the Magnuson-Moss Act she is required to provide all buyers with a written warranty setting forth their rights as consumers. Mary asks if there is not a way around that because she is tired of complaining customers who do not take care of their earrings and that she would love to find a way to provide no warranties whatsoever. Which of the following is true regarding Susa's advice and warranties on the earrings?

Accepted Answer

A)   Susan is wrong, and Mary is free to disclaim warranties.
B)   Susan is partially correct, and Mary must provide a limited written warranty under the Magnuson-Moss Act.
C)   Susan is correct, and Mary must provide a full written warranty under the Magnuson-Moss Act
D)   Susan is partially correct, and Mary must provide a limited written warranty under the Magnuson-Moss Act only if her average gross sales are over $5,000.
E)   Susan is partially correct, and Mary must provide a full written warranty under the Magnuson-Moss Act only if her average gross sales are over $5,000.F) B) and C)
G) A) and C)

Question 2

The UCC does not allow a seller to cancel a contract if the buyer is in breach although a lessor may do so.

Accepted Answer

A) True 
 B)False

Question 3

Specific performance usually requires that the seller or lessor cover.

Accepted Answer

A) True 
 B)False

Question 4

What does the UCC provide regarding liquidated damages if the parties do not agree to them?

Accepted Answer

A)   That the nonbreaching seller may claim against a breaching buyer 20 percent of the purchase price or $500, whichever is less, as liquidated damages.
B)   That the nonbreaching seller may claim against a breaching buyer 20 percent of the purchase price or $500, whichever is more, as liquidated damages.
C)   That the nonbreaching seller may claim against a breaching buyer 30 percent of the purchase price or $1,000, whichever is less, as liquidated damages.
D)   That the nonbreaching seller may claim against a breaching buyer 30 percent of the purchase price or $1,000, whichever is more, as liquidated damages.
E)   NothingF) A) and B)
G) A) and C)

Question 5

Which of the following is true regarding warranties under common law?

Accepted Answer

A)   No warranties automatically arise under the common law.
B)   Only the implied warranty of assignability automatically arises under common law.
C)   Only implied warranties of merchantability automatically arise under common law.
D)   Only warranties of title automatically arise under common law.
E)   Express warranties, implied warranties of assignability, and warranties of title all automatically arise under common law.F) B) and D)
G) C) and D)

Question 6

Reference - New Furniture. Penny purchased $3,000 worth of furniture from Bob's furniture shop. Through an arrangement with Bob, Penny financed the purchase through a financing company called Let Us Help You. Twenty-nine days after the goods were delivered to her, Penny had a disagreement with Let Us Help You regarding the amount of interest she would be required to pay. She notified Bob on that day that she was rejecting the goods. Bob claimed that she did not properly reject the furniture and also that she acted in bad faith. Penny says that she properly rejected and denies that she acted in bad faith. She also says that, in any event, she cannot be charged with both wrongful rejection and also bad faith because of double jeopardy. Which of the following is true regarding the claim of Bob that Penny failed to properly reject the goods?

Accepted Answer

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

Question 7

Reference - New Furniture. Penny purchased $3,000 worth of furniture from Bob's furniture shop. Through an arrangement with Bob, Penny financed the purchase through a financing company called Let Us Help You. Twenty-nine days after the goods were delivered to her, Penny had a disagreement with Let Us Help You regarding the amount of interest she would be required to pay. She notified Bob on that day that she was rejecting the goods. Bob claimed that she did not properly reject the furniture and also that she acted in bad faith. Penny says that she properly rejected and denies that she acted in bad faith. She also says that, in any event, she cannot be charged with both wrongful rejection and also bad faith because of double jeopardy. Which of the following is true regarding the claim of Bob that Penny failed to act in good faith?

Accepted Answer

A)   Bob is incorrect because under the UCC Penny had 30 days in which to reject the goods.
B)   Bob is incorrect only if Penny can establish that Let Us Help You miscalculated the amount of interest she owed.
C)   Bob is incorrect only if Penny can show that the goods were overpriced.
D)   Bob is correct because Penny made no claim that the goods were nonconforming.
E)   Bob is correct only if Bob can show that the goods were priced at reasonable market value.F) None of the above
G) A) and B)

Question 8

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?

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 buyer has five days in order to determine whether to void the contract or proceed under it.
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 who does not wish to remedy any problems.F) D) and E)
G) B) and E)

Question 9

Which of the following is needed in order for the implied warranty of merchantability to be applied?

Accepted Answer

A)   Both parties must be merchants and a sale must be involved.
B)   Both parties must be merchants, and either a sale or lease may be involved.
C)   The seller must be a merchant and a sale must be involved.
D)   A seller or lessor must be a merchant, and either a sale or lease may be involved.
E)   The seller must be a merchant, goods valued at over $500 must be involved, and either a sale or lease may be involved.F) B) and E)
G) All of the above

Question 10

Priscilla, who worked for a dry cleaner, came up with a great new idea for a type of press that speeded up the process immensely. She quit her job, hired labor and purchased materials, and manufactured a number of the presses. She sold the presses to her friend Phil for resale. Phil began advertising and distributing the press, but was notified by ABC Company that the sales violated its patent. After investigation, Phil determined that ABC had the better argument and demanded that Priscilla refund the purchase price. Priscilla declined on the basis that she had no idea that a patent on a similar press was in existence. Who will likely win the dispute and why?

Accepted Answer

A)   Phil will likely win because Priscilla violated the implied warranty of merchantability.
B)   Phil will likely win because Priscilla violated the implied warranty of fitness for a particular purpose.
C)   Phil will likely win because Priscilla violated the warranty of title.
D)   Priscilla will likely win because she had no knowledge of any previous patent.
E)   Priscilla will likely win both because she had no knowledge of any previous patent and also because the duty was on Phil to investigate whether any patents existed prior to his purchase of the presses.F) A) and B)
G) A) and C)

Question 11

Ann chipped a tooth on a peach pit while eating a can of mixed fruit. She wants to sue the manufacturer of the fruit mix. Which of the following would be the manufacturer's best defense?

Accepted Answer

A)   That food products do not come with a warranty of merchantability.
B)   That no express warranty was made.
C)   That no implied warranty of fitness for a particular purpose was made.
D)   That the presence of the peach pit should not have been unexpected.
E)   That the injury was minor.F) C) and E)
G) A) and B)

Question 12

What needs to be shown under the UCC for goods to be found merchantable?

Accepted Answer

For goods to be merchantable under the U...

Question 13

An express warranty is any description of the goods' physical nature or its use, either in general or specific circumstances, that becomes part of the contract.

Accepted Answer

A) True 
 B)False

Question 14

The ideal tender rule requires that the seller deliver goods in conformity with the terms of the contract.

Accepted Answer

A) True 
 B)False

Question 15

Under which of the following circumstances will a court refuse to uphold modifications or limitations to remedies agreed upon by the parties?

Accepted Answer

A)   When they seem unfair.
B)   When one party is a corporation.
C)   When neither party is a corporation.
D)   When one side was not represented by an attorney.
E)   When the remedies fail in their essential purpose.F) B) and C)
G) None of the above

Question 16

Which of the following is defined by the UCC as any practice that members of an industry expect to be part of their dealings?

Accepted Answer

A)   Trade norm
B)   Course of dealing
C)   Anticipated trade dealing
D)   Usage of trade
E)   Course of performanceF) A) and E)
G) All of the above

Question 17

Belinda orders a certain type of hybrid rose for her wedding. A disease sweeps through that type of rose, and the florist could only obtain the roses at great cost if at all. Which of the following is the appropriate term for the florist's best defense?

Accepted Answer

A)   Commercial unreasonableness
B)   Commercial impracticability
C)   Substantial hardship
D)   Unforeseen circumstances
E)   Unreasonable brideF) B) and E)
G) None of the above

Question 18

When was the Magnuson-Moss Act passed?

Accepted Answer

A)   1950
B)   1955
C)   1970
D)   1975
E)   2000F) All of the above
G) B) and E)

Question 19

Reference - Boat Tow. Donnie went to a new car dealership and told the salesperson, who was not the manager, that he needed a new car that would get good gas mileage and would also pull his big boat. The salesperson encouraged him to buy a smaller car that the salesperson promised would pull the boat. Donnie bought the car and used it to pull the boat. Unfortunately, the heavy pull on the car did significant damage to the car's engine. Donnie complained to the salesperson who denied any liability. Donnie, who had half a semester of business law, informed the salesperson that along with the sale of the car he also received an express warranty and an implied warranty of merchantability, and that he could recover under either of those theories. Will Donnie likely be able to recover damages based upon a breach of the implied warranty of merchantability?

Accepted Answer

A)   No, because the implied warranty of merchantability was that the car would, for example, be fit for the ordinary purposes for which such goods are used. Pulling the boat was not an ordinary purpose for that small car.
B)   Yes, because Donnie informed the salesperson about the need for the car to pull the boat.
C)   Yes, because the salesperson told Donnie that the car would pull the boat.
D)   No, because of the lack of an implied warranty of fitness for a particular purpose.
E)   No, because there was no warranty of merchantability.F) B) and D)
G) D) and E)

Question 20

Liquidated damages are identified after a contract breach occurs.

Accepted Answer

A) True 
 B)False

Exam 15: Formation and Performance of Sales and Lease Contracts

When was the Magnuson-Moss Act passed?

Correct Answer
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Correct Answer
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The ideal tender rule requires that the seller deliver goods in conformity with the terms of the contract.

Correct Answer
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An express warranty is any description of the goods' physical nature or its use, either in general or specific circumstances, that becomes part of the contract.

Correct Answer
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What does the UCC provide regarding liquidated damages if the parties do not agree to them?

Correct Answer
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Correct Answer
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Which of the following is needed in order for the implied warranty of merchantability to be applied?

Correct Answer
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Ann chipped a tooth on a peach pit while eating a can of mixed fruit. She wants to sue the manufacturer of the fruit mix. Which of the following would be the manufacturer's best defense?

Correct Answer
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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?

Correct Answer
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Under which of the following circumstances will a court refuse to uphold modifications or limitations to remedies agreed upon by the parties?

Correct Answer
verified

Specific performance usually requires that the seller or lessor cover.

Correct Answer
verified

Belinda orders a certain type of hybrid rose for her wedding. A disease sweeps through that type of rose, and the florist could only obtain the roses at great cost if at all. Which of the following is the appropriate term for the florist's best defense?

Correct Answer
verified

Which of the following is true regarding warranties under common law?

Correct Answer
verified

Correct Answer
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Which of the following is defined by the UCC as any practice that members of an industry expect to be part of their dealings?

Correct Answer
verified

Liquidated damages are identified after a contract breach occurs.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

The UCC does not allow a seller to cancel a contract if the buyer is in breach although a lessor may do so.

Correct Answer
verified

What needs to be shown under the UCC for goods to be found merchantable?

Correct Answer
verified
For goods to be merchantable under the U...
View Answer

Exam 15: Formation and Performance of Sales and Lease Contracts

When was the Magnuson-Moss Act passed?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The ideal tender rule requires that the seller deliver goods in conformity with the terms of the contract.

Correct AnswerverifiedShow Answer

An express warranty is any description of the goods' physical nature or its use, either in general or specific circumstances, that becomes part of the contract.

Correct AnswerverifiedShow Answer

What does the UCC provide regarding liquidated damages if the parties do not agree to them?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is needed in order for the implied warranty of merchantability to be applied?

Correct AnswerverifiedShow Answer

Ann chipped a tooth on a peach pit while eating a can of mixed fruit. She wants to sue the manufacturer of the fruit mix. Which of the following would be the manufacturer's best defense?

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?

Correct AnswerverifiedShow Answer

Under which of the following circumstances will a court refuse to uphold modifications or limitations to remedies agreed upon by the parties?

Correct AnswerverifiedShow Answer

Specific performance usually requires that the seller or lessor cover.

Correct AnswerverifiedShow Answer

Belinda orders a certain type of hybrid rose for her wedding. A disease sweeps through that type of rose, and the florist could only obtain the roses at great cost if at all. Which of the following is the appropriate term for the florist's best defense?

Correct AnswerverifiedShow Answer

Which of the following is true regarding warranties under common law?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is defined by the UCC as any practice that members of an industry expect to be part of their dealings?

Correct AnswerverifiedShow Answer

Liquidated damages are identified after a contract breach occurs.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The UCC does not allow a seller to cancel a contract if the buyer is in breach although a lessor may do so.

Correct AnswerverifiedShow Answer

What needs to be shown under the UCC for goods to be found merchantable?

Correct AnswerverifiedFor goods to be merchantable under the U...View AnswerShow Answer

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Correct Answer
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For goods to be merchantable under the U...
View Answer