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Chapter 13: Sales Contracts
1. A contract in which ownership of (title to) goods transfers immediately from the seller to the buyer for a price
is a contract to sell.
2. When parties exchange goods for goods, the sale is a barter.
3. The Uniform Commercial Code (UCC) does not govern contracts to sell goods in the future.
4. In both sales and contracts to sell, the seller is known as the vendee.
5. The bill of sale serves as written evidence of the transfer of ownership of goods.
6. Words or conduct of the buyer that indicate that the goods received are satisfactory can be construed by the
7. Casual sellers are also considered merchants.
8. When both parties are merchants, a new term inserted by the offeree automatically becomes part of the
contract if the offeror fails to object within a reasonable time.
9. Even if a party against whom enforcement of an oral contract is sought admits in legal pleadings or testimony
that he or she agreed to part or all of a contract, a signed writing is still necessary to satisfy the Statute of
Frauds.
10. If the buyer has had adequate opportunity to inspect the goods, acceptance may be indicated by a failure to
reject them within a reasonable time.
11. Consideration for a sale or contract to sell goods may be expressed in the form of
A. barter.
B. money.
12. According to the UCC, goods do not include
A. books and clothing.
B. dogs.
13. Acceptance of goods occurs when
A. the goods are used or resold.
B. the buyer has indicated by words or conduct that the goods received are satisfactory.
14. When payment for goods takes place at a later date, the transfer of title takes place when
C. delivery is made.
D. the final payment is made.
15. Casual sellers
C. only sell casual items.
D. are usually subjected to special taxation.
16. A seller can enforce an oral contract for nonresalable goods if
A. goods from third parties have been contracted for the order.
B. manufacturing has substantially begun.
17. If a party admits in legal testimony that he or she agreed to part or all of an oral contract governed by the
Statute of Frauds, the contract would be
C. totally enforceable.
D. none of these.
18. Which of the following alternatives may a court that decides that a clause of a contract is unconscionable
not do?
A. refuse to enforce the contract
B. enforce the contract without the clause
19. With a few exceptions to be enforceable in court, a contract must be evidenced in writing if the goods are
valued at
C. $2,500 or more.
D. $5,000 or more.
20. Sherry offers to sell her set of antique dishes to her neighbor, Joan. In this situation Sherry would be known
as a(n)
C. vendee.
D. none of these.
21. What governs the sale of goods as well as contracts to sell goods in the future?
C. bill of sale
D. none of these
22. Shawn needs a new refrigerator for his home. At a local appliance store, he purchases one for $825 using his
credit card. The appliance store should provide Shawn with a written receipt showing his payment and the
C. agreement of sale.
D. none of these.
23. Under the provisions of the Uniform Commercial Code, which of the following holds true in regard to
regulation, licensing, and taxation?
A. A casual seller and merchant are held to the same standards of conduct.
B. Buyers and sellers are to be treated differently.
C. conforming
D. tangible
25. In a contract to sell goods, the purchaser is known as the
A. vendee.
26. Which of the following transactions would be governed by the UCC provisions on sale of goods?
C. the transfer of ownership of a building
D. All of the above would be governed by the UCC provisions on the sale of goods.
27. Which of the following must be included in a writing evidencing a sale of goods in order to satisfy the
Statute of Frauds?
C. date of delivery
D. credit terms
28. In a contract between merchants under the UCC, if a seller sends a signed written confirmation of an oral
agreement to the buyer the confirmation will be binding on both unless the buyer sends a written objection to
C. 30 days.
D. none of the above.
29. UCC stands for
A. Universal Commercial Code.
30. If the property transferred from one party to another for something of value is not a good, what body of law
governs the transaction?
C. the law of transactional analysis
D. none of the above
31. Lewis manufactures handmade wooden baby chairs, while Doyle manufactures small wooden children's
desks. The two enter into an agreement in which they exchange goods for goods. This type of sale is known as
a(n) ____________________.
32. Kareen has studied art and design at a local university. Additionally, she has traveled throughout the world
learning about specialty jewelry and priceless artwork and regularly buys goods for stores back home. Because
she deals regularly with a particular good and possesses special knowledge, under the UCC Kareen would be
classified as a(n) ____________________.
33. A contract or clause within a contract that is grossly unfair and oppressive is said to be
____________________.
34. Stacey and Gene's new home will not be completed for two more months. The couple is, however,
purchasing furniture for their new home. Because the furniture cannot yet be delivered, the furniture company
will store the merchandise for them and will provide them with a receipt for the stored merchandise. Because no
actual transfer of possession has taken place, this is a(n) ____________________ delivery of the goods.
35. ____________________ entails a collection of rights including the right to hold title, possess, use, enjoy,
profit from, waste, and even destroy the subject property.
36. The consideration paid for a sale of goods is known as the ____________________ of those goods.
37. Under the UCC, a new term added by the offeree to the terms of the offer is treated as a proposal for
____________________.
38. Under the law of contracts, a new term added to the offer by the offeree would be considered a
____________________ and would terminate the original offer.
39. When ____________________ in full has been accepted by the seller, an oral contract for the sale of goods
valued at more than $500 would be enforceable in full.
40. If the transfer of ownership is to take place in the future, the transaction is a(n) ____________________
rather than a sale.
41. Mayer Farms contracted to sell its entire potato crop to Sam's Spuds at current market prices. Although
Mayer had 95% of his crop already harvested and in storage before the devastating flood came, he charged
Sam's Spuds the after-flood inflated price due to limited supply. Is this an unconscionable contract? Explain
your answer.
42. Cheri receives a telephone call from a telemarketing company offering to sell her four CDs of classic rock
music for just $39.95 plus tax and shipping of $6.05. Cheri agrees to purchase the music, and her credit card is
immediately charged for the transaction. A week later the CDs arrived, and Cheri signed for delivery. Three
months later, however, Cheri has never opened the package or inspected the merchandise. After finally opening
the package, she sees that one of the CDs is damaged and calls to convince the company to recredit her credit
card for the damaged merchandise. What rights does Cheri have under this oral contract? What rights or duties
does the music company have?
Answers may vary. Because the merchandise was less than $500 a written contract was not needed. However,
