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Exam 12: Sales and Lease Law

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Question 1

Multiple Choice

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ABC Hardware Store orders one hundred power hand-drills from Best Tools Inc.When the hand-drills are delivered,they are all missing pieces.ABC rejects the shipment.To exercise a right to cure,Best Tools must

A) promptly notify ABC of the intent to cure.
B) pay a cure fee.
C) pick up the nonconforming tools before the end of the business day.
D) enter into a new contract with ABC.

E) All of the above
F) C) and D)

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Question 2

Multiple Choice

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Dona offers to sell her used sofa,chair,coffee table,end table,and lamp to Erma for $700.Erma responds that she will pay that price if Dona's TV set is included.Neither party is a merchant.Their contract is formed according to

A) the new terms of the acceptance.
B) whatever is reasonable.
C) the terms of the original offer.
D) none of the terms.

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

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Question 3

True/False

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A seller who tenders nonconforming goods has reasonable grounds to believe that the buyer will accept the tender if it includes a price allowance.

Fresh Dairy Mart is the offeror and Gelato Company is the offeree under a unilateral sales contract in which Helado Corporation is also interested.Fresh is not notified of Gelato's beginning performance within a reasonable time.Fresh

If the acceptance to a sales contract between non-merchants includes terms different from those in the offer,no contract is formed under the UCC.

Under the perfect tender rule,a buyer or lessee has the right to insist on goods that conform to their contract in every detail.

Fiesta LLC contracts to buy 1,000 balloons from Gas Bags Inc.for $1 per item.When the market price decreases to 50 cents per balloon,Fiesta refuses to go through with the deal.Gas Bags can recover

Miko owns a lake house that she rents to vacationers.Miko gives her son Ninh a trip to Omaha on his graduation from community college.Miko sells her car to her neighbor Pye for $4,500.UCC Article 2 covers

Coal Mine Company buys an excavator from Dig Equipment Inc.Coal Mine is unaware that Equity Credit Company holds a lien against the excavator.If Equity repossesses the goods,Coal Mine can recover for breach of warranty from

Builders Inc.and Concrete Supply Company enter into a contract for a sale of cement.Concrete delivers,but Builders does not pay.Concrete can recover as damages

If a court determines that a contract involving both goods and services is primarily a goods contract,any dispute over the deal will be decided under the UCC.

Mining Corporation purchases the business assets of Open Pit Inc. ,including its equipment and supplies,for an agreed-to price,payable in installments.Under Article 2 of the UCC,this transaction is

Except for an option contract,a firm offer by a merchant is irrevocable once it has been made.

When the goods delivered are not as promised,the measure of recovery in the buyer's suit for damages is the difference between the value of the goods as accepted and the value if they had been delivered as warranted.

The obligation of commercial reasonableness underlies every sales and lease contract.

An auto dealer is a merchant when selling or leasing a new car but not when selling or leasing a pre-owned vehicle.

Express and implied warranties do not displace each other-more than one warranty can cover the same goods in the same transaction.

Under the UCC,good faith can never be disclaimed.

Ski Shop sells a pair of skis to Tami.When Tami uses the skis,they snap in two.The cause is something that Ski Shop did not know about and could not have discovered.This is a breach of

Warranties of title arise automatically in most sales contracts-a thief breaches the warranty by selling stolen goods.