Reference no: EM13840101
1. Which of the following statements is true of the scope of the Uniform Commercial Code (UCC)?
Each state is allowed to rewrite parts of the UCC to reflect the wishes of its state legislature.
Land and services contracts are governed by the articles under the UCC.
The UCC makes sales law more predictable for businesses that engage in transactions in more than one country.
Under the UCC, the rules for transactions involving merchants and transactions involving regular buyers and sellers are the same.
2. Harry had agreed to hire 17-year-old Nathan as a production worker in his factory. However, before Nathan could start working for Harry, the law in the country made it illegal to employ minors in production units. In this scenario, the parties to the contract are discharged from their duties on the grounds of _____.
material breach
alteration of the contract
objective impossibility
novation
3. The _____ states that the first assignee to give notice of assignment to the obligor is the party with rights to the contract.
parol evidence rule
preexisting duty rule
English rule
first-assignment-in-time rule
4. Which of the following areas does Article 2(A) of the Uniform Commercial Code (UCC) govern?
Bank deposits and collections
Service and land contracts
Contracts for the lease of goods
Transaction related to letters of credit
5. _____ are best described as damages parties to a contract specify in advance in order to prevent a difficult court battle if there is a particular kind of breach.
Special damages
Nominal damages
Liquidated damages
Punitive damages
6. Under the Uniform Commercial Code (UCC), which of the following will be treated as goods?
Real estate
Copyrights
Crops grown on a field
Corporate stocks
7. A third-party beneficiary:
occurs when a party to a contract transfers his duties under the contract to a third party, who is not part of the original contract.
occurs when a party to a contract transfers her rights to receive something under the contract to a third party.
is created when two parties enter into a contract with the purpose of benefiting a third party.
is created when three different parties enter into a contract with the purpose of mutual benefit.
8. Bob agrees to sell his farm to Joseph for $80,000. He then transfers his right to receive Joseph's payment to Kiara. In this scenario, the transfer of Bob's rights to Kiara is an example of a(n) _____.
assignment
delegation
collateral promise
adhesion contract
9. Article 2 of the Uniform Commercial Code (UCC) applies to:
transfer of money between banks.
sale of goods.
investment securities.
transactions involving letters of credit.
10. Ronald contracts with Saba to have her deliver some machinery to his factory. Saba then transfers her duty to Liam, a third party, who delivers the machinery to Ronald. In this scenario, the transfer of Saba's duties to Liam is an example of a(n):
delegation.
third-party beneficiary contract.
assignment.
adhesion contract.
11. In a contract between Sophia and Carl, Sophia had agreed to pay Carl $30,000 to paint her house and redo her garden. Carl agreed to the terms. After painting the house, Carl decided and convinced Sophia that it would be a better deal for her if he could redo her swimming pool rather than the garden for the original price. Carl's duty under the original contract was discharged only after he performed the new duty. Which of the following methods to discharge a contract does this scenario best illustrate?
Discharge by material breach
Discharge by accord and satisfaction
Discharge by anticipatory repudiation
Discharge by novation
12. Which of the following statements is true of the rights of an assignee to a contract?
An assignee is well-protected against any defenses for nonperformance the obligor may plan to raise.
An assignee cannot decline an assignment under any circumstance.
An assignee cannot be assigned the rights to a contract if the assignment decreases the obligor's risk or duties.
An assignee cannot be assigned the rights to a contract when the contract is personal in nature.
13. When determining whether a contract falls under Article 2 of the Uniform Commercial Code (UCC), first determine if the:
contract is for a mixed sale and then determine if the transaction is predominantly for the sale of services.
parties involved in the transaction are merchants and then evaluate the value of the transaction.
sale is for goods and then determine if the contract is predominantly for the sale of goods.
sale is for real estate and then determine if trade fixtures are a part of the contract.
14. A person who transfers his or her rights to receive something under a contract to a third party is referred to as a(n) _____.
creditor
beneficiary
delegator
assignor
15. According to Article 2(A) of the Uniform Commercial Code (UCC), a lessee is a(n):
third-party beneficiary who gains from a lease contract.
incidental beneficiary in a full-service lease agreement.
person who transfers his or her obligations under a lease contract to a third party.
person who acquires the right to possession and use of goods under a lease.
16. Under the Uniform Commercial Code (UCC), when a contract for the sale or lease of goods is silent about the payment, the:
buyer will have to pay additional charges as interests on the payment.
payment has to be made by the buyer within three months from receiving the goods.
payment is due at the time and place at which the buyer is to receive the goods.
contract will be deemed as void by the courts.
17. Restitution, as a primary equitable remedy for a breach of contract, is best described as:
an order requiring the breaching party to pay some predetermined amount of money to the injured party.
an order for the breaching party to perform a new duty as a substitution to an old duty.
the return of any property given up under the contract.
the replacement of one of the parties to a contract.
18. In which of the following cases is the assignment of rights prohibited?
When either party to a contract, which has an antiassignment clause, wants to assign his or her right to receive payment
When the assignment increases the risk or duties the obligor would face in fulfilling the original contract
When the law necessitates an assignment in bankruptcy cases, but the contract has an antiassignment clause
When a party to the contract wants to assign the right to receive damages for a breach of contract to sell goods or services
19. If a person discharges his or her duty by making an offer to perform and being ready, willing, and able to perform, the offer of performance is known as a(n):
assignment.
tender.
illusory promise.
delegation.
20. Which of the following occurs when a party to a contract unjustifiably fails to substantially perform his obligations under the contract?
Anticipatory repudiation
Objective impossibility
Substantial performance
Material breach
21. Which of the following statements accurately brings out the difference between the common law and the Uniform Commercial Code (UCC)?
The mirror image rule that applies under common law does not apply under the UCC.
Under the common law, a contract may be formed even though some terms of the contract are left open, whereas under the UCC, such contracts will be deemed as void.
Under the UCC, if a buyer has ordered for specifically manufactured goods, the buyer has to assert the statute of frauds, which is not required under the common law.
While the common law focuses on contracts for the sale of goods, the UCC focuses on land and service contracts.
22. A party transferring her or his duties under a contract to a third party is referred to as the _____.
beneficiary
creditor
assignor
delegator
23. Jason contracts with Kylie to paint her house. In exchange, the small amount of money that Jason owes to a local bank will be paid off by Kylie. In this scenario, the bank is referred to as the:
incidental beneficiary.
promisee.
intended beneficiary.
promisor.
25. Which of the following statements is true of the Contracts for the International Sale of Goods (CISG)?
The CISG provides guidance when a party to an international sales contract initiates litigation.
The CISG does not cover the general topics covered under the UCC, like offers, acceptances, and other contract topics.
The CISG requirements related to the statute of frauds are more restrictive than those under the UCC.
The CISG requires that all contracts for international sales be in writing.
26. Paul pays a premium of $20,000 every year on a life insurance plan. The insurance company will have to pay his wife an annual pension of $30,000 on Paul's death. Thus, Paul's wife will be referred to as a _____.
promisor
donee beneficiary
promise
creditor beneficiary
27. Which of the following statements is true of a consumer lease?
It is a lease that is complicated by the addition of a third person, a supplier or vendor, who plays a separate role from that of the lessor.
It is a lease in which the lessor does not select, manufacture, or supply the goods, but simply acquires the right to their use in connection with the terms of the lease.
It is a lease that has a value of $50,000 or more, and primarily exists between a lessor and lessee who are both merchants.
It is a lease that exists between a lessor regularly engaged in the business of leasing or selling and a lessee who leases the goods primarily for personal purpose.
28. For contracts involving a sale of automobiles, which of the following individuals will be held to a higher standard of behavior under the Uniform Commercial Code (UCC)?
A dealer of pre-owned cars
A baker who sells his old van
A publishing firm that buys a new car for office use
A college student who buys a new car for personal use
29. In discharge of a contract by novation, the:
parties to the contract agree that one party will perform her or his duty differently from the performance specified in the original agreement.
original parties to the contract and a third party all agree that the third party will replace one of the original parties and that the original party will then be discharged.
parties to the contract mutually agree to discharge each other from the contract.
original parties to the contract mutually agree to discharge each other from the contract by substituting a new agreement.
30. A(n) _____ is best described as a third party that benefits from a contract in which the promisor agrees to pay the promisee's debt.
trust beneficiary
donee beneficiary
creditor beneficiary
incidental beneficiary
31. _____ are best described as foreseeable damages that result from special facts and circumstances arising outside a contract itself.
Compensatory damages
Consequential damages
Nominal damages
Equitable damages
32. Nominal damages are primarily:
foreseeable damages that result from special facts and circumstances arising outside a contract itself.
granted when parties to a contract need any remedy other than money damages.
designed to signify that the plaintiff has been wronged by the defendant.
designed to compensate the plaintiff for the loss he or she suffered due to a breach of contract.
33. A(n) _____ occurs when a party to a contract transfers his or her rights to receive something under the contract to a third party.
third-party beneficiary contract
delegation
assignment
aleatory contract
34. To justify recovery based on a quasi-contract, a plaintiff must prove that:
the defendant lacks legal capacity.
he or she conferred a benefit on the defendant.
he or she suffered consequential damages.
the contract lacks legal assent.
35. In the context of the Uniform Commercial Code (UCC), which of the following statements is true of merchants?
A merchant holds himself or herself out as having knowledge peculiar to the goods involved in the transaction.
A merchant can be a buyer or seller who frequently changes the kind of goods he or she deals in.
Article 2 of the UCC exclusively focuses on buying and selling of goods by merchants only.
The UCC imposes lesser duties on merchants in comparison to nonmerchants.
36. Under the Uniform Commercial Code (UCC), if a contract for the sale or lease of goods is silent about the place for delivery, the:
buyer will have to pay additional storage charges to the seller.
goods are to be delivered at the seller's place of business.
contract will be deemed as void by the courts.
goods are to be delivered at the residence of the seller.
37. Which of the following statements accurately brings out the difference between creditor and donee beneficiaries?
A donee beneficiary is created when the contract is intended to release a party from an obligation to a third party, whereas a creditor beneficiary is created if the contract intends to grant a gift.
A creditor beneficiary who wins a judgment against one party to a contract may not seek judgment against the other party, whereas a donee beneficiary can seek judgment against both the parties.
A creditor beneficiary has limited ability to enforce a contract when compared to a donee beneficiary's ability to enforce rights to a contract.
A creditor beneficiary can enforce rights against the promisor or the promisee, whereas a donee beneficiary can enforce rights only against the promisor.
38. If a buyer decides to terminate a contract because the seller changes the price of the contract without the knowledge of the buyer, then the contract is discharged by:
novation.
condition precedent.
operation of law.
mutual rescission.
39. Uniform Commercial Code (UCC) Section 2A-103(j) defines a lease as:
the practice of purchasing an item, using it, and then returning it to the store for a refund.
the practice of discharging a duty by making an offer to perform and being ready, willing, and able to perform.
a transfer of the right to possession and use of goods for a term in return for consideration.
an agreement where parties exchange with each other a good, service, or property of almost equal value.
40. Maya, a wedding planner, had agreed to use purple orchids for Janet's wedding. However, due to an embargo against the country from where the flowers were to be imported, Maya could not fulfill her promise. In this scenario, the contract between Maya and Janet may be discharged on the basis of _____.
condition subsequent
novation
objective impossibility
commercial impracticability
41. A(n) _____ is best described as an order either forcing a person to do something or prohibiting a person from doing something.
novation
injunction
delegation
assignment
42. Which of the following statements best defines a concurrent condition?
It is a particular event that must occur in order for a party's contractual duty to arise.
It refers to a condition an assignee to a contract must fulfill in order to claim his or her rights to the contract.
It occurs when the parties to a contract are required to perform their obligations for each other simultaneously.
It is a future event that terminates the obligations of the parties to a contract when it occurs.
43. Which of the following terms refers to a future event that terminates the obligations of the parties to a contract when it occurs?
Concurrent condition
Constructive condition
Condition subsequent
Condition precedent
44. When the contracting parties do not intend to benefit someone but unintentionally do so, that third party is referred to as a(n):
incidental beneficiary.
contingent beneficiary.
creditor beneficiary.
donee beneficiary.
45. Under Article 2 of the Uniform Commercial Code (UCC), a mixed sale is best described as a contract:
that combines a good with a service.
formed through a combination of implied and unilateral contracts.
that combines a service with realty.
created when more than one type of a company's stocks are sold.