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Exam 11: Sales and Lease Contracts

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Question 31

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Omni Metals Company and Piecework Fabrication, Inc., enter into a contract under which Omni agrees to deliver a certain quantity of sheet metal to Piecework each month. The contract does not include a price term. In a suit between the parties over the price, a court will

A) determine a reasonable price at the time for delivery.
B) impose the lowest market price.
C) impose the highest market price.
D) return the parties to the positions they held before the contract.

E) A) and B)
F) C) and D)

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Question 32

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The risk of loss in a shipment contract passes to the buyer when the goods are delivered to the buyer at the specified destination.

A) True
B) False

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Question 33

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Under the UCC, a sale is the passing of title from a seller to a buyer for a price.

If an owner holds fungible goods as tenants in common, he or she can pass title without actually separating the goods.

Safety Supply Corporation in New York sells a truckload of protective suits, masks, and other safety gear to Toxic Recovery, Inc., in Connecticut, "F.O.B. New York." Safety Supply arranges with US Truckline to transport the goods. The cost of the transport will be paid by​

Car n' Truck Body & Paint Company orders custom paint from Diverse Hues Inc., but Diverse does not deliver. Car n' Truck will probably be unable to enforce the agreement if the parties omitted​

Tune Products, Inc., offers to sell to Unlimited Sales Company one hundred MP3 players at $50 a piece, subject to certain specific delivery dates. Unlimited replies with a signed purchase order that reads, "Accept your offer for 100 I-appliances at $50 each. Must be delivered to our ware-house." Tune does not respond or deliver the goods. Unlimited files a suit for breach of contract, to which Tune answers that there is no contract because Unlimited's purchase order contained additional terms and is not signed by Tune. Can Unlimited recover? Explain.

Great Harvest Farms offers to sell Hearty Bakeries, Inc., fifty bushels of wheat. Hearty's representative Ilene responds, "We agree to buy fifty bushels only if the wheat is Grade A quality." Between Great Harvest and Hearty Bakeries​

Under the UCC, an oral contract for a sale of goods is enforceable if goods have been received and accepted.

Ursula buys a Verismooth boat from a Watercraft store, which agrees to keep the boat for Ursula until she picks it up. Before Ursula gets the boat, an unforeseen tornado destroys the store and the boat. The loss of the boat is suffered by​

Expert Stitching Corporation enters into a contract to sell denim clothing to Fine Fashion Company, which in turn sells a pair of jeans to Grady, a consumer. In contrast to standards that apply to consumers, the UCC imposes on merchants​

The terms of a fully integrated contract can be contradicted by evidence of any prior agreements.

Brian, an agent for Clarion Motors, Inc., writes a letter on behalf of Clarion Motors to Dina on November 1 stating that he will sell her a 2016 Subaru Outback for $20,000 between November 1 and December 31. Brian's letter to Dina is

Equipment Rentals Corporation (ERC) agrees to lease two backhoes to Dig & Fill Construction, Inc. Before any interest in the backhoes can pass from ERC to Dig & Fill, they must be​

Roasters Corporation and Outdoor Barbecues, Inc., enter into a contract for a sale of a commercial grill. The contract requires Roasters to deliver the goods to Speedy Delivery Company for transport to Outdoor. Risk of loss passes to Outdoor when​

When the risk of loss for goods passes from a seller to a buyer is generally determined by the contract between the parties.

Jack sells a piano to Kyle for $5,000 and a trumpet to Lauren for $999. A writing is required to enforce the sale of​

Quest Outdoor Store orders River Run-brand kayaks from Sports Merchandise, Inc. Sports Merchandise ships kayaks of the wrong size, which Quest rejects and returns via Trans-State Shipping Company. During the return, the kayaks are lost. The loss is suffered by​

If the goods are so nonconforming that the buyer has the right to reject them, the risk of loss does not pass to the buyer.

A seller with voidable title has the power to transfer good title to a good faith purchaser for value.