• April 28th, 2018

Business Management

. Sam bought a new suit. The first time Sam took the suit to the cleaners, it disintegrated through no faultof the cleaners. What theory is best for recovering the price of the suit from the seller?
A. Breach of warranty of title
B. Contributory negligence
C. Breach of implied warranty of merchantability
D. Unfair trade practices
2. Which of the following constitutes acceptance of goods delivered pursuant to a sales contract?
A. Taking physical possession of the goods
B. Signify that the goods are conforming
C. Performing acts that are consistent with the ownership
D. Rejecting the goods
3. X Company manufactures bicycles. X Company shipped a group of bicycles to Y Sporting Goods in asmall town. Johnny purchased one of the bicycles manufactured by X Company from the Sporting Goodsstore. While he was riding the bicycle the day after purchasing it, the front wheel fell off, and Johnny felland broke his arm. The cause of the accident was a defect that existed when X Company shipped it to YSporting Goods. Will Johnny be successful if he files a lawsuit alleging strict liability?
A. No, the product must be unreasonably dangerous to the user or consumer because of its defective condition.
B. No, the goods must not have been substantially changed from the time the product was sold to the time the injury wassustained.
C. No, the defendant must normally be engaged in the business of selling or distributing the product.
D. Yes, each of the requirements for an action in strict liability is met.
4. Dacia is working out the terms of a contract to purchase Reed’s paintings. Reed submits an offer inwriting, which states that Dacia may have the first option to purchase each of his paintings within 30 daysafter completion, at $1,000 per painting. Dacia submits an offer in writing that indicates her acceptance, butstipulates that if she is unsatisfied with a painting after purchase, she may return the painting for a fullrefund within 10 days of delivery. Reed makes no objection. Dacia and Reed are considered merchantsunder the UCC. What is the result of these events?
A. A contract is formed, and Dacia’s additional terms become part of the contract if they don’t materially alter the contract.
B. No contract is formed, and Dacia’s offer is treated as a rejection of Reed’s offer.
C. No contract is formed, and Dacia’s offer is a counteroffer.
D. A contract is formed, and Dacia’s additional terms don’t become part of the contract.
5. Lulu orders 20 pairs of navy blue pants from Peter for $4,000, with delivery due on November 15. OnNovember 6, Peter delivers 20 pairs of sky blue pants. Lulu phones Peter and tells him he is in breachbecause the pants are the wrong color. Which of the following statements is true?
A. Peter is in breach, and Lulu may cancel the contract.
B. Peter has the right to be paid for the pants that were delivered under the doctrine of substantial compliance.
C. Peter has the right to cure the breach by delivering 20 pairs of navy blue pants on or before November 15.
D. Peter is in breach, and the contract is automatically cancelled.
6. Tom wants to change the oil in his automobile, and to do so, he needs to purchase an oil filter. He goesto the auto supply store and tells the clerk that he needs to change the oil in his vehicle and wants anappropriate oil filter for his make and model of vehicle. The clerk recommends oil filter XYZ-2. Tompurchases the oil filter, takes it home, and puts it on his vehicle. The oil filter isn’t suited for the vehicleand, as a result, the vehicle is damaged. Tom can sue successfully based on breach of
A. express warranty.
B. implied warranty of fitness for a particular purpose.
C. implied warranty of merchantability.
D. implied warranty of title.
7. Lulu orders 20 pairs of navy blue pants from Peter for $4,000, with delivery due no later thanNovember 15. On November 6, Peter delivers the goods to a common carrier for shipment. Two minuteslater, Lulu phones to say that she won’t be able to pay for the goods because she has gone out of business.Peter may
A. sue for the price of the goods.
B. recover damages from the goods.
C. stop delivery of the goods.
D. resell the goods.
8. Zeke orally agrees to sell six television sets to Molly for $4,000. Zeke then changes his mind and tellsMolly the deal is off. Molly sues, claiming breach of contract to sell six television sets for $4,000. Zeketestifies about an oral agreement to sell five television sets to Molly for $4,000. The most likely result isthat
A. the court will enforce an agreement to sell six television sets for $4,000.
B. the court will enforce an agreement to sell five television sets for $4,000.
C. there’s no enforceable agreement because oral agreements aren’t enforceable if the parties disagree about the terms.
D. there’s no enforceable agreement; it wasn’t in writing.
9. Tom agrees to sell 500 pairs of pants to Sally for $5,000. Tom delivers the pants. Sally hands Tom acheck. Tom demands cash and refuses to accept the check. Which of the following statements is true?
A. Sally will be in breach if she doesn’t immediately give Tom $5,000 in cash.
B. Tom is in breach as the UCC gives him no right to demand cash.
C. Sally must pay cash but is entitled to a reasonable time to come up with the cash.
D. Sally is in breach because Tom is permitted to demand cash.
10. Terra drops off her diamond ring at Jewel’s Jewelry shop to have it cleaned. By mistake, the ring ends
up in a display counter and is sold by Jewel to Lulu for $9,000. Terra learns what has happened wants
Lulu to give her the ring back. Lulu wants to keep it because she likes it. Which of the following statementsis true?
A. Lulu may keep the ring and owes Terra nothing because Lulu is the true owner.
B. Lulu may keep the ring if she pays Terra $9,000.
C. Lulu may keep the ring if she pays Terra the fair value of the ring.
D. Lulu must give the ring to Terra because she is the true owner.
11. John, an automobile dealer, entered a contract with Lisa in which Lisa agreed to purchase a 1995
Chevrolet automobile as is from John for $2,000. John expressly told Lisa that the motor in the automobilewas bad, along with the clutch and brakes. Further, John told Lisa that she would probably need to havethe automobile repaired immediately on leaving the dealership. Lisa purchased the automobile despite itsproblems. However, Lisa became disgruntled because the costs of the repairs were more than sheexpected. She filed suit against John for breach of warranty. The most likely result will be that Lisa will
A. lose because no warranties were violated.
B. win because the implied warranty of merchantability was violated.
C. win because the implied warranty of fitness for a particular purpose was violated.
D. lose because the UCC doesn’t apply to sale of automobiles
12. Jake orders a sound system from a catalogue. The catalogue description says that the sound system hasa remote control. When the computer arrives, Jake discovers there’s no remote control for this soundsystem. Jake may sue for breach of
A. warranty of fitness for a particular purpose.
B. express warranty.
C. warranty of merchantability.
D. implied warranty.
13. Carl goes to a store to buy a television. At the store, there’s a television playing. Carl thinks the pictureand sound on that television is good, so he buys the same model. He takes it home, plugs it in, and findsthat the picture and sound, while reasonably good, aren’t as good as what he saw in the store. He sues forbreach of warranty. If he wins, it will be because
A. there’s a breach of warranty of merchantability.
B. there’s a failure of consideration.
C. the demonstration of the model constituted a warranty that proved false.
D. there’s a breach of warranty of fitness for a particular purpose.
14. Lulu orders 20 pairs of navy blue pants from Peter for $4,000, with delivery due no later thanNovember 15. On November 6, Peter phones to say that he won’t deliver the pants because he has goneout of business.
A. Peter isn’t in breach because going out of business makes it impossible for Peter to perform.
B. Lulu can declare Peter in breach on November 15 if Peter hasn’t delivered the pants.
C. Lulu can declare Peter in breach on November 6.
D. Peter will be in breach only if Lulu is unable to find an alternate supplier who can deliver by November 15.
15. Tom contracts to sell goods to Velia. The contract isn’t C.O.D. and doesn’t provide for payment againsta document of title. Tom delivers the goods. Which of the following statements is true?
A. Velia must accept the goods but may inspect before paying.
B. Velia has a right to inspect the goods before accepting or paying for the goods.
C. Velia must accept the goods.
D. Velia must pay for the goods but may inspect before accepting.
16. In August, wholesaler Terrence contracts with retailer Elmer to sell Elmer 500 pairs of blue pants for$5,000 in December. Then, in October, the price of pants drops due to a deal Terrence has made with themanufacturer. Terrence, seeking to get more business from Elmer, agrees in writing to drop the price of thepants due in December from $5,000 to $3,500. Then, in November, the deal Terrence made with themanufacturer falls through, and Terrence calls Elmer and tells him the original price of $5,000 will becharged. Elmer sues, seeking damages based on the lower purchase price. The most likely result is
A. Terrence wins because the price modification was made without Elmer’s consideration.
B. the court will award damages based on an average of the two prices.
C. Elmer wins because the modification was effective.
D. Terrence wins because Elmer originally agreed to $5,000.
17. Lulu orders 20 pairs of navy blue pants from Peter for $4,000. On receipt of 20 pairs of sky bluepants, Lulu begins offering the pants for sale in her store. After a few days, when no one buys the pants,Lulu ships them back to Peter, claiming that the pants aren’t the color that was specified in the contract andclaiming that Peter needs to ship her conforming goods. Peter claims he doesn’t have to do anything andthat Lulu owes him $4,000. Which of the following statements is true?
A. Lulu owes Peter nothing because she hasn’t accepted the pants until she either pays or signifies that the pants conform to therequirements of the contract.
B. Peter must ship to Lulu 20 pairs of navy blue pants.
C. Lulu owes Peter $4,000 because she accepted the pants.
D. Lulu owes Peter $4,000 because the pants approximate what was required under the contract.
18. Bob enters into a contract to sell a furnace to Carl and also agrees to install it. Bob and Carl have adispute over the contract. The contract will be governed by
A. UCC law because the dominant element of the contract is sale of goods.
B. UCC law because the contract failed to expressly state that the UCC wouldn’t govern the transaction.
C. non-UCC law because the contract failed to expressly state whether the UCC would govern the transaction.
D. non-UCC law because it includes the service of installation.
19. Tom contracts with Sarah to sell 500 pairs of pants for $5,000. Tom ships the goods to Sarah via acommon carrier. While in transit, the delivery truck drives over a cliff and the pants are destroyed. If thecourt rules that Sarah bears the loss, which of the following statements must be true?
A. The contract is C.O.D.
B. The contract is a destination contract.
C. The contract is a shipment contract.
D. The contract is F.O.B.
20. Dennis contracts with Racketware, Inc., a company in France, to purchase 5,000 tennis rackets. Therackets will be shipped by airplane to a warehouse in New Jersey. Dennis and Racketware enter into acontract on November 1, and the contract identified the rackets being purchased. The airplane containingthe rackets leaves France on November 2. The documents necessary to claim the rackets are received byDennis in the mail on November 3. Dennis claimed the goods at the warehouse on November 4. Dennisacquired an insurable interest in the rackets on what date?
A. November 2
B. November 4
C. November 3
D. November 1

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