ALLIED BUS230 MODULE 6 check your understanding

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Question Points

1. A contract for the sale of goods is either a present sale or a contract to sell.

a. True

b. False

2. A sale on approval is a present sale.

a. True

b. False

3. Under Article 2 of the UCC which of the following factors is the most important in determining which party bears the risk of loss in a contract for the sale of goods?

a. How the goods were lost.

b. Who has title to the goods.

c. The shipping terms in a sales contract.

d. The method of shipping the goods.

4. Under the UCC, the one term of a sale that must be in writing is the:

a. date.

b. quantity.

c. unit price.

d. total sale price.


5. The “mirror-image” rule has been incorporated into the UCC.

a. True

b. False

6. Under the common law the location of title formed the basis of the sale of goods to the buyer.

a. True

b. False

7. Johnson and Wales are both merchants. Johnson offers to sell Wales several items, and Wales accepts but adds additional terms to the acceptance. Wales’ terms automatically become part of the contract unless:

a. the offer expressly limits acceptance to the terms of the offer.

b. the new terms materially alter the contract.

c. the offeror rejects the new terms and notifies the offeree within a reasonable time.

d. all of the choices apply.

8. Freedom of contract is a basic principle of the UCC. Consequently, its provisions are not mandatory.

a. True

b. False


9. Under Article 2 of the UCC, when a contract involves a mixed sale such as a sale of goods and a sale of services, which of the following statements is correct?

a. The courts ordinarily will apply Article 2 to any contract that involves goods.

b. The courts ordinarily will apply Article 2 when the sale of goods is the primary purpose of the transaction.

c. The courts ordinarily will not apply Article 2 to any contract that involves the sale of services.

d. Whether Article 2 applies depends upon the dollar amount of the contract.

10. Article 2 of the UCC does not cover a contract for:

a. services.

b. the sale of growing crops.

c. the sale of a computer.

d. the sale of goods that have been specifically manufactured.

11. Under Article 2 of the UCC, a firm offer will be created only if the:

a. offer states the time period during which it will remain open.

b. offer is made by a merchant in a signed writing.

c. offeree gives some form of consideration.

d. offeree is a merchant.

12. Under the UCC:

a. Risk of loss is placed on the party who has title.

b. Risk of loss is always placed on the buyer.

c. Risk of loss is always placed on the seller.

d. None of the choices apply.

14. Under the UCC, if a merchant offers to keep an offer open:

a. the offer must be in writing.

b. the offer may be withdrawn at any time.

c. the offer is firm for at least three months.

d. the offeree must have given consideration.


15. Richardson offered to sell her used motorcycle to Evans for $450.00. Evans said, “I accept, but would you also replace the front tire.” Neither Richardson nor Evans is a merchant.

a. Evans has accepted the offer.

b. Evans has rejected the offer.

c. Richardson may treat her offer as accepted or rejected.

d. Evans’s statement “I accept” is of no legal significance.


16. Which of the following statements applies to a sale on approval under Article 2 of the UCC?

a. Both buyer and seller must be merchants.

b. The buyer must be purchasing the goods for resale.

c. Risk of loss for the goods pass after the trial period is up.

d. Title to goods passes to the buyer on the delivery of the goods to the buyer for trial purposes.

17. Blacklaw in a signed letter to Ekis made the following request (offer): “Ship promptly 100 dozen of the new light saver type light bulbs.” This offer:

a. may be accepted only by a prompt shipment.

b. may be accepted only by a prompt promise to ship.

c. may be accepted by either a prompt promise to ship or a prompt shipment.

d. is invalid because no price was mentioned.

18. Which of the following statements does not apply to a written contract governed by Article 2 of the UCC?

a. The contract must involve the sale of goods of $5,000 or more.

b. The contract may involve the sale of personal property.

c. The requirements of the contract must be carried out by both parties in good faith.

d. The obligations of a merchant may be different from those of a non- merchant.


19. Goods that are not in existence and not yet identified are called:

a. personal goods.

b. unidentified goods.

c. future goods.

d. unsatisfactory goods.

20. Generally, a buyer obtains no better title to goods than the seller had.

a. True

b. False

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