True / False
1. In medieval Europe, rules governing trading among merchants developed called the law merchant.
a. True
b. False
2. Modern commercial law traces its roots to ancient rules known as the law merchant.
a. True
b. False
3. Modern commercial law was largely invented by British judges and legal experts who worked for years in the
1840′s to replace outdated legal rules that were blocking the development of commerce.
a. True
b. False
4. Before the UCC contracts for the sale of goods were primarily governed by common law, which differed from
state to state.
a. True
b. False
5. Before the UCC interstate contracts for the sale of goods were primarily governed by federal common law.
a. True
b. False
6. Every state, except Louisiana, has adopted Article 2 of the UCC.
a. True
b. False
7. Only eight states have not adopted Article 2 of the UCC.
a. True
b. False
8. Congress adopted the UCC in the early 1950′s to facilitate trade and reduce the confusion caused by different
common law rules in different states.
a. True
b. False
9. The UCC does not apply to the sale of investment securities.
a. True
b. False
10. In contrast to the law of contracts, Article 2 of the UCC specifically governs service contracts and contracts
involving real estate.
a. True
b. False
11. Article 2 of the UCC applies to all sales agreements, except those between merchants.
a. True
b. False
12. In a dispute with a stock broker over the sale of stock, a lawyer will ordinarily bring the lawsuit under Article 2 of
the UCC.
a. True
b. False
13. If the sale of a good also includes a service contract, it will not fall under Article 2.
a. True
b. False
14. A contract for the sale of a patent may not be under UCC Article 2.
a. True
b. False
15. Many land experts prefer to write contracts for the sale of property under Article 2, as it tends to favor sellers.
a. True
b. False
16. If the sale of a good involves services that are of greater value than the goods themselves, the contract falls under
the common law, not Article 2.
a. True
b. False
17. If the sale of a good also involves services, such as installation of the goods, the contract falls under the Article 2.
a. True
b. False
18. In Paramount Contracting Co. v. DPS Industries, DPS claimed there was a contract to deliver hundreds of
truckloads of dirt for Paramount, which claimed no contract had come into existence. The courts held there was
a contract under the UCC as most of the value was for goods.
a. True
b. False
19. In Paramount Contracting Co. v. DPS Industries, DPS claimed there was a contract to deliver hundreds of
truckloads of dirt for Paramount, which claimed no contract had come into existence. The courts held that since
the majority of the value of the contract was for services in using the dirt at a construction site, the contract was
under the common law.
a. True
b. False
20. Members of the public who enter into a sales contract under Article 2 are subject to the same standard as are
merchants.
a. True
b. False
21. Article 2 requires sales contracts to be in good faith.
a. True
b. False
22. Anyone who presents themselves as having knowledge about a product will be held to the UCC standard of a
merchant, even if the person does not have skilled knowledge.
a. True
b. False
23. Although all parties to a sale under the UCC must meet the UCC’s good faith standard, merchants must meet even
higher standards of honesty and good faith.
a. True
b. False
24. Jones is “a merchant” under Article 2 even if he knows little about textile machinery but hires Smith as his agent to
sell textile machinery. Smith has 25 years’ experience in the textile industry.
a. True
b. False
25. Under Article 2, a sale occurs when there is a passing of title from the seller to the buyer for a price.
a. True
b. False
26. Under Article 2, if the legal title to a good does not pass, there has not been a sale under the UCC.
a. True
b. False
27. Article 2A is a recent addition to the UCC that extends it to cover certain leases of personal property.
a. True
b. False
28. Article 2A is a recent addition to the UCC that extends it to cover the sale of real estate in commercial
transactions.
a. True
b. False
29. Parties to the sale of some goods may control, by contract, when title to the goods is to pass.
a. True
b. False
30. If parties to the sale of goods under Article 2 fail to state when title passes, then it is presumed to pass when the
goods are manufactured and ready for shipment.
a. True
b. False
31. If your laptop computer is stolen, and then sold by the thief to a buyer who does not know it is stolen (is “innocent”),
new title is created for the innocent buyer.
a. True
b. False
32. The UCC requires less formality than does the common law of contracts.
a. True
b. False
33. The UCC, compared to the common law, prefers standard form contracts.
a. True
b. False
34. Under the common law, a contract is not formed unless there is no question that an offer has been accepted.
Article 2 provides that a contract can be formed in any manner, including “conduct” that shows an agreement
between the parties.
a. True
b. False
35. A contract can be formed under Article 2 of the UCC even if some of the offer’s major terms are omitted or are
simply left open for determination later.
a. True
b. False
36. Article 2 allows the parties to enter into a binding agreement even though the contract price is to be determined at a
later date.
a. True
b. False
37. In Crest Ridge Construction v. Newcourt, where Newcourt demanded payment in full before delivery because
Crest Ridge did not have a credit history, the court held Newcourt had the right to impose that payment term given
the reality of the matter.
a. True
b. False
38. In Crest Ridge Construction v. Newcourt, where Newcourt demanded payment in full before delivery because
Crest Ridge did not have a credit history, the court held Crest Ridge could sue for the higher price it had to pay
another supplier for the same goods.
a. True
b. False
39. In Crest Ridge Construction v. Newcourt, where Newcourt demanded payment in full before delivery because
Crest Ridge did not have a credit history, the court held that it would look to the dealings of the parties instead of
the written contract to determine the intent of the parties.
a. True
b. False
40. Under both Article 2 and the common law, if parties intend to enter into a binding agreement, but are unable to
agree to all major terms, a contract will be formed with the missing terms supplied by the parties at a later date or
reasonable terms will be imposed by the court if necessary.
a. True
b. False
41. In contrast to the common law of contracts, a merchant’s firm offer under Article 2 may be revoked within a
reasonable time without consideration and is irrevocable with consideration for a period not to exceed 3 months.
a. True
b. False
42. Under Article 2, if the offeror does not clearly state a particular method of acceptance, a contract is formed when
the offer is accepted in any reasonable manner under the circumstances.
a. True
b. False
43. Under the common law of contracts, unlike under Article 2, an acceptance may not deviate from the terms of the
offer without being either a rejection or a counteroffer.
a. True
b. False
44. Under Article 2, an acceptance is invalid if the parties intend to form a contract but the offeree’s acceptance
contains different terms from the original offer.
a. True
b. False
45. Article 2 uses the common law rule of each state to determine when an offer has been accepted to form a
contract.
a. True
b. False
46. A contract can exist under the UCC even if some terms are changed or added by the offeree.
a. True
b. False
47. Under the UCC, an offeror may not impose a term in an offer that does not allow the offeree to change terms of
the offer.
a. True
b. False
48. Under the UCC, when contracts go back and forth between parties with conflicting terms, often written on
standard forms, it is referred to as the “battle of the forms.”
a. True
b. False
49. Under the UCC, when a “battle of the forms” exists, the rule is generally that no contract was formed.
a. True
b. False
50. In Orkal Industries v. Array Connector, where Orkal bought parts from Array by sending an order form, but
Array confirmed with its own form that contained different terms. Orkal did not object to the different terms until
litigation arose later at which point the added terms mattered. The appeals court held that under the UCC a seller
cannot change material terms of an order without express permission..
a. True
b. False
51. In Orkal Industries v. Array Connector, where Orkal bought parts from Array by sending an order form, but
Array confirmed with its own form that contained different terms. Orkal did not object to the different terms until
litigation arose later at which point the added terms mattered. The appeals court held that under the UCC a seller
cannot change material terms of an order without express permission..
a. True
b. False
52. In Orkal Industries v. Array Connector, where Orkal bought parts from Array by sending an order form, but
Array confirmed with its own form that contained different terms. Orkal did not object to the different terms until
litigation arose later at which point the added terms mattered. The appeals court held that if the changed terms
were minor they would be binding, but material changes require assent under the UCC.
a. True
b. False
53. “Shrinkwrap” agreements that come attached to products have no legal validity.
a. True
b. False
54. Under the UCC, if a party modifies a proposed sales contract, new consideration must be provided for the change
for a contract to be formed.
a. True
b. False
55. Like the common law, the UCC provides that the parties must exchange new consideration to modify an existing
sales contract.
a. True
b. False
56. The UCC’s statute of frauds provision says that all service contracts must be in writing.
a. True
b. False
57. According to Article 2′s statute of frauds provision, all written contracts under the UCC must specify all terms of
the contract.
a. True
b. False
58. The statutes of frauds provision of the UCC states that contracts for the sale of goods worth $500.00 or more must
be “sealed.”
a. True
b. False
59. Under Article 2′s statute of frauds, the basic rule is that a contract for the sale of goods priced at $5000 or more is
not enforceable unless it is in writing and signed by the party against whom enforcement is sought.
a. True
b. False
60. The UCC follows a different parol evidence rule than does the common law of contracts.
a. True
b. False