1. The Uniform Computer Information Transactions Act is a federal law.
a.
True
b.
False
2. Many states have applied Article 2 of the UCC to software licenses either directly or by analogy.
a.
True
b.
False
True
1
Moderate
3. The UCC treats fixtures as goods.
a.
True
b.
False
False
1
Moderate
8-1a Types of Contracts Covered by Article 2
4. The UCC permits a contract to be enforced if the parties intended a binding contract, even though important terms may
have been left open for later agreement.
a.
True
b.
False
True
1
Moderate
5. The UCC does not specifically define an offer or an acceptance.
False
1
Easy
Introduction
a.
True
b.
False
6. The UCC has adopted the “mirror image” rule.
a.
True
b.
False
False
1
Moderate
7. Under the UCC, the implied warranty of merchantability guarantees that the goods are reasonably fit for the general
purposes for which they are sold, and that they are properly packaged and labeled.
a.
True
b.
False
True
1
Moderate
8. A contract for the sale of land is governed by Article 2 of the UCC.
a.
True
b.
False
False
1
Moderate
9. Under the UCC, the buyer may reject any or all of the goods if the goods fail to conform to the contract.
a.
True
True
1
Moderate
b.
False
10. The UCC applies identical rules concerning the sales of goods to merchants and nonmerchants.
a.
True
b.
False
False
1
Easy
11. The main issue in CASE 8.1 Option Wireless, Ltd. v. OpenPeak, Inc. (2012) involved the so-called “knockout rule.”
a.
True
b.
False
True
1
Challenging
12. The UCC requires an obligation of good faith in the performance of every contract or duty covered by the act.
a.
True
b.
False
True
1
Moderate
13. Efforts to create a comprehensive uniform state law for software licensing have been largely unsuccessful.
a.
True
b.
False
True
True
1
Moderate
8-11 Right to Reject Nonconforming Goods
14. Procedural unconscionability is easier to prove in a commercial setting than when an individual consumer is involved.
a.
True
b.
False
False
1
Moderate
8-12 Unconscionability
15. Under the UCC doctrine of commercial impracticability as applied by the UCC, a failure to perform is a breach even if
performance is made impractical by an event unforeseen by the contract.
a.
True
b.
False
False
1
8-13 Commercial Impracticability
16. A proposal by a sales representative that is subject to approval by the home office is not an offer.
a.
True
b.
False
True
1
Moderate
8-3b Acceptance
17. As defined by the UCC, “good faith” involves the observance of objective reasonable commercial standards of fair
dealing but there is no requirement as to honesty in fact.
a.
True
b.
False
False
1
Moderate
18. Most states have adopted the Uniform Electronic Transactions Act.
a.
True
b.
False
True
1
Moderate
19. Most courts require that a plaintiff prove reliance on an express warranty in order to recover damages.
a.
True
b.
False
True
1
Moderate
20. The implied warranty of fitness for a particular purpose may apply to merchants and nonmerchants alike.
a.
True
b.
False
True
1
Moderate
8-7c Implied Warranty of Fitness for a Particular Pupose
21. A product liability action brought in tort generally permits recovery of economic damages suffered by a purchaser of
an inferior or defective product whereas a breach of warranty action would not allow such a claim.
a.
True
b.
False
False
1
1
Moderate
22. To which of the following does Article 2 of the UCC apply?
a.
The sale of goods.
b.
The rendering of services.
c.
The sale of land.
d.
Both the sale of goods and the rendering of services.
a
1
Easy
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
8-1 Article 2 of the UCC
Blooms: Knowledge
23. __________ are items of personal property attached to real property that cannot be removed without substantial
damage.
a.
Connectors
b.
Relaters
c.
Entanglements
d.
Fixtures
d
1
Moderate
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
8-1a Types of Contracts Covered by Article 2
Blooms: Comprehension
24. Which of the following is the majority approach when resolving contradictory terms in pre-printed forms? (See
the Richardson v. Union Carbide Industrial Gases, Inc. case)
a.
The majority approach is that the offeror’s terms control.
b.
The majority approach is that the offeree’s terms control.
c.
The majority approach is to apply the knockout rule with conflicting terms knocked out of the contract.
d.
The majority approach is the assimilation view whereby terms of the offer prevail over the different terms in
the acceptance only if the latter are materially different.
c
1
Challenging
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
8-3 Contract Formation
Moderate
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
8-7e Strict Product Liability vs Breach of Warranty
Blooms: Comprehension
25. To which of the following does the term “battle of the forms” refer?
a.
The situation in which one of the parties wishes to use a preprinted form, but the other party wishes to engage
in direct negotiation.
b.
The situation in which the parties entered into a formal contract, but the contract has been misplaced by both
parties resulting in uncertainty regarding the exact terms of the original contract.
c.
The situation in which parties have neglected to bargain over items and then exchange standard printed forms
resulting in confusion regarding the terms of the contract.
d.
The situation in which a party wishes to claim unconscionability based upon another party’s use of a preprinted
form.
c
1
Moderate
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
8-3b Acceptance
Blooms: Comprehension
26. According to the UCC, if no amount of time is specifically stated, a firm offer provided by a merchant must be kept
open for a reasonable period of time, up to:
a.
one year.
b.
six months.
c.
three months.
d.
sixty days.
c
1
Challenging
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
8-3c Consideration
Blooms: Comprehension
27. If parties to a contract dispute a missing term, the court could simply fill-in the missing term using the __________
provisions of the UCC.
a.
Gap-Filler
b.
Conditional Acceptance
c.
Battle of the Forms
d.
Knockout Rule
a
1
Moderate
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
8-3 Contract Formation
Blooms: Comprehension
Blooms: Analysis
28. Under the Convention on Contracts for the International Sale of Goods (CISG), an offer becomes effective when:
a.
the offeror sends it.
b.
it reaches the offeree.
c.
the offeree reads it.
d.
the offeree replies.
29. Under the UCC, the __________ term(s) must be in a writing order to satisfy the statute of frauds.
a.
price
b.
quantity
c.
identity of the parties
d.
time and place for delivery
b
1
Moderate
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
8-4 Statute of Frauds
Blooms: Comprehension
30. If a sales contract requires or authorizes the seller to ship goods by carrier, when does the risk of loss pass to the buyer
if the contract does not require delivery at a particular destination?
a.
At the time the goods are properly delivered to the carrier.
b.
At the time the carrier tenders the goods to the buyer.
c.
At the time the contract is initially entered into.
d.
Not until the buyer has received the goods and had a chance to inspect them.
a
1
Challenging
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
8-10a Goods Shipped by Carrier
Blooms: Analysis
31. Under the UCC, a firm offer only applies to:
a.
merchants.
b.
merchants and non-merchants.
c.
non-merchants.
d.
option contracts.
a
b
1
Challenging
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
Global View: CISG
Blooms: Comprehension
32. Which of the following is governed by Article 2 of the UCC?
a.
A contract for sale of a commercial building
b.
A contract for sale of office supplies
c.
An employment contract
d.
A life insurance contract
b
1
Moderate
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
8-1a Types of Contracts Covered by Article 2
Blooms: Comprehension
33. UCC Section 2-319 expressly authorizes the buyer and seller to allocate the __________ between them as they see fit.
a.
damages
b.
specific performance
c.
modification
d.
risk of loss
d
1
Moderate
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
8-10 Allocation of Risk of Loss
Blooms: Comprehension
34. If a sales contract requires the seller to ship the goods by carrier and specifies the destination, the risk of loss passes to
the buyer when the:
a.
goods are properly delivered to the carrier.
b.
carrier tenders the goods to the buyer at the specified destination.
c.
contract is finalized.
d.
seller pays for the goods.
b
1
Challenging
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
8-10a Goods Shipped by Carrier
Blooms: Analysis
1
Moderate
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
8-3c Consideration
Blooms: Application
35. When the seller provides the buyer with a document enabling them to pick up goods held at an independent
warehouse, the risk of loss passes to the buyer when the:
a.
goods are picked up by the buyer.
b.
contract of sale is signed.
c.
buyer receives the document entitling it to pick up the goods.
d.
buyer pays for the goods.
36. A contract is __________ when one party is induced to enter a contract without having any meaningful choice.
a.
substantively unconscionable
b.
procedurally unconscionable
c.
procedurally impracticable
d.
substantively impracticable
b
1
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
Blooms: Application
37. A contract is __________ if its terms are unduly harsh or oppressive or unreasonably favorable to one side.
a.
substantively unconscionable
b.
procedurally unconscionable
c.
procedurally impracticable
d.
substantively impracticable
1
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
Blooms: Application
38. Under Section 2-207(2), if only one party is a merchant, an acceptance containing additional terms:
a.
automatically becomes part of the contract unless the offeror objects within ten days.
b.
is considered a proposal for additions to the contract.
c.
is a counteroffer.
d.
has no effect and the contract is accepted without the new terms.
1
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
Blooms: Application
39. Which of the following is an example a statement made by a salesperson that would be considered “puffing”?
a.
This car will get 35 miles per gallon.
b.
This is a genuine diamond ring.
c.
This is an original work of art.
d.
This copier is the best in the business.
d
1
Moderate
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
8-7a Express Warranty
Blooms: Comprehension
40. Which of the following is true regarding the UCC’s Statute of Frauds?
a.
The writing involved must be typed, not handwritten.
b.
The writing must be signed by the party to be charged, not necessarily by all parties
c.
Any warranties must be included in the writing in order to be enforceable
d.
The UCC’s requirements regarding a writing are strict and place significant burdens on the parties in regard to
adequately including all terms of the agreement in the writing.
b
1
Moderate
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
8-4 Statute of Frauds
Blooms: Comprehension
41. Which of the following is NOT a type of warranty under the UCC?
a.
Express
b.
Fitness for a particular purpose
c.
Merchantability
d.
Specific performance
d
1
Moderate
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
8-7 Warranties
b
1
Challenging
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
8-3b Acceptance
Blooms:Analysis
42. Which of the following is the essential consideration under the UETA for determining the validity of an electronic
signature?
a.
Whether the person intended the process or mark provided to act as a signature and whether it can be
attributed to that person.
b.
Whether an actual signature, as opposed to some sort of unacceptable click-type agreement is involved.
c.
Whether an actual written type signature appears as opposed to an unacceptable typed name.
d.
Whether an actual written or typed signature appears as opposed to some sort of facsimile.
1
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
Blooms: Application
43. Which of the following is true regarding the UETA in relation to the E-SIGN Act?
a.
Because the UETA is a federal law, whereas the E-Sign Act is a creature of state law, the UETA preempts the
E-Sign Act in many ways.
b.
The UETA and also the E-Sign Act exclude wills from their coverage.
c.
Both the UETA and the E-Sign Act include within their broad scope provisions that divorces may be entered
into and recorded electronically.
d.
The UETA allows electronic signatures whereas the E-Sign Act disallows such signatures.
b
1
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
8-5 Electronic Contracts: The Uniform Electronic Transactions Act and the E-Sign Act
Blooms: Comprehension
44. Under 2-711 of the UCC, a buyer has a remedy called “cover”. What is cover and when can it be used?
a.
Cover applies when conforming goods are rejected by the buyer, giving him the right to cancel the contract
and buy better goods elsewhere with reimbursement for any extra costs.
b.
Cover applies when nonconforming goods are delivered to the buyer, giving him the right to cancel the
contract and buy the goods elsewhere with reimbursement for any extra costs.
c.
Cover is a SELLER’s right and does not apply to the buyer.
d.
Cover allows a buyer to cancel the contract after the shipment is delayed for 30 days, and recover direct
damages from the seller.
b
1
DISC: – AICPA: BB-Legal
Blooms: Comprehension
Blooms: Comprehension
45. In CASE 8.2 MacNeil Automotive Products, Ltd. v. Cannon Automotive, Ltd. (2010), MacNeil subcontracted with
Canon Automotive to provide floor mats on automobiles. MacNeil claimed the mats were defective and breached the
express warranty. The main question before the court was whether:
a.
the sales talk constituted an implied warranty for fitness of purpose.
b.
the sales talk constituted an implied warranty of merchantability.
c.
the sales talk was puffery or an express warranty.
d.
the sales talk properly disclaimed all express warranties.
46. Which of the following is an online agreement that appears on a website but does not require the user to take any
action to express his or her consent to the agreement?
a.
Click-wrap license
b.
Browse-wrap agreement
c.
Shrink-wrap license
d.
Computer-license agreement
b
1
Moderate
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
8-3b Acceptance
Blooms: Comprehension
47. __________ do not relieve a contracting party from their responsibilities under the UCC doctrine of commercial
impracticability.
a.
Wars
b.
Market fluctuations
c.
Embargoes
d.
Market fluctuations and embargoes
b
1
Moderate
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
8-13b Unforeseen Contingency
Blooms: Application
48. A(n) __________ contract occurs when one party is induced to enter a contract on a “take it or leave it” basis.
a.
adhesion
b.
merchants
c
1
Challenging
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
8-3 Contract Formation
Blooms: Analysis
c.
output
d.
requirement
49. Which of the following will NOT create an express warranty under the UCC?
a.
Making a statement or promise relating to the goods.
b.
Expressing an opinion about the quality of the goods.
c.
Providing a description of the goods.
d.
Stating any fact regarding the quality of the goods.
b
1
Moderate
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
8-7a Express Warranty
Blooms: Comprehension
50. A(n) __________ places the license terms on the outside of a box containing software.
a.
click-wrap license
b.
browse-wrap agreement
c.
shrink-wrap license
d.
computer-license agreement
c
1
Moderate
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
8-3b Acceptance
Blooms: Comprehension
51. The courts that have considered click-wrap licenses have generally found that the licenses are:
a.
enforceable.
b.
enforceable only for software costing $100 or less.
c.
enforceable only for software costing $100 or less and that is designed for business, not consumer use.
d.
unenforceable.
a
1
Moderate
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
a
1
Moderate
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
8-12a Procedural Unconscionability
Blooms: Comprehension
52. Chris sold Valerie a home containing a wood stove which could not be removed from the home without causing
substantial damage. Shortly after the sale, Valerie sustained significant smoke damage due to a malfunction of the stove.
She told Chris that she was going to sue him under the UCC. Chris told her that was not possible. Which of the following
is true?
a.
Chris is correct because the stove would likely be a fixture not covered by the UCC.
b.
Valerie is correct because the stove would likely be a fixture covered by the UCC.
c.
Valerie is correct because the stove would not be considered a fixture and would, therefore, be covered by the
UCC.
d.
Valerie is correct because the sale of the home would be covered under the UCC along with anything else sold
with the home.
1
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
Blooms: Analysis
53. Ricardo develops a new type of software and asks you how he should go about making money through distribution of
it. He has been told that he should sell the software as opposed to issuing licenses for its use. What should you tell him?
a.
That by selling, rather than by licensing, a software vendor can avoid the doctrine of first sale, which allows a
lawful owner to sell or otherwise dispose of the copy.
b.
That by licensing, rather than by selling, a software vendor can avoid the doctrine of first sale, which allows a
lawful owner to sell or otherwise dispose of the copy.
c.
That selling is the only reasonable alternative because computer programs are not copyrightable.
d.
That licensing is the only reasonable alternative because computer programs are not copyrightable.
b
1
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
8-2 Software Licenses
Blooms: Comprehension
54. In a state that had adopted the Uniform Electronic Transactions Act, Kiera and Ben entered into a contract whereby
Ben would clean Kiera’s house once a week for eighteen months for $75 per week. The transaction was done
electronically, and both Kiera and Ben signed through the use of an electronic signature. Unfortunately, problems resulted
when Ben failed to show up as scheduled. Ben told Kiera that the contract was not good because his signature was made
electronically. Kiera told him that he was wrong and that he needs to get up to date with the modern age. Which of the
following is correct regarding the dispute?
a.
Ben is correct because electronic signatures are not recognized as valid under any circumstances.
b.
Ben is correct only if Kiera’s name was typed as opposed to being shown in handwriting-style (cursive) form.
c.
Kiera is correct that the signature is sufficient only if she can show that she and Ben had previously engaged in
electronic transactions.
d.
Kiera is correct that her electronic signature is sufficient.
Blooms: Comprehension
55. Polly sold Jason a used car for $1,000. Their contract provided that the engine in the car was in good shape, a true
statement as far as Polly knew. Unfortunately, the day after Jason purchased the car, it broke down and was discovered to
have significant engine problems. Jason told Polly that he wanted a refund. Polly told him that he was not entitled to a
refund because she did not lie and that as far as she knew, there was nothing wrong with the car. Which of the following is
true?
a.
Jason is entitled to a refund because of a breach of an express warranty.
b.
Jason is entitled to a refund because of a breach of the implied warranty of fitness for a particular purpose.
c.
Jason is entitled to a refund only if he can obtain evidence that Polly lied.
d.
Jason is not entitled to a refund under any circumstances because the vehicle was used.
1
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
Blooms: Analysis
56. Renee owns a small restaurant that sells hamburgers as one of its main attractions. She puts up a sign that says “Best
Burgers in the County”. Peter does an exhaustive investigation of all restaurants in the county and asks his friends to do
the same. They all determine that actually a restaurant run by their friend Sam has the best burgers in the county. Peter
tells Renee that unless she takes down her sign, he is going to sue her for breach of warranty and false advertising. Renee
tells him that he has no cause of action. Who is correct?
a.
Peter is correct so long as he and his friends can convince the jurors in a lawsuit that Sam has the best burgers.
b.
Peter is correct only if he can establish that Renee was aware that Sam’s burgers actually taste better before she
put up the sign.
c.
Peter is incorrect because Renee was engaged in “spoofing”.
d.
Peter is incorrect because Renee was engaged in “puffing”.
d
1
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
8-7 Warranties
Blooms: Analysis
57. Between merchants, what is the affect of an acceptance that includes additional terms without expressly making the
contract subject to the offeror’s agreeing to those terms?
unless (1) the offer expressly limits acceptance to the terms of the offer, (2) the new
d
1
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
8-5 Electronic Contracts: UETA and the E-SIGN Act
Blooms: Analysis
58. Explain the different types of warranties that exist under the UCC.
59. Indicate how a seller may disclaim warranties under the UCC.
60. Why do vendors today typically prefer to license software rather than sell it outright?
61. What does Section 201 of the UCC provide regarding a Statute of Frauds?
62. What is the rule regarding the enforceability of a contract for the sale of goods that comes within the statute of frauds
if no quantity is specified?
63. What must be established in order for goods to be considered merchantable under the UCC?
64. If the contracted goods are unique and fail to be delivered, the buyer can ask a court under 2-716 of the UCC to order:
a.
allocation of risk of loss.
b.
consequential damages.
c.
cover.
d.
specific performance.
d
1
Moderate
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
8-14c Specific Performance
Blooms: Analysis
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
8-7b Implied Warranty of Merchantability
Blooms:Comprehension