Question 1

A sale-on-approval contract occurs when the seller and buyer agree that the buyer may return the goods at a later time.

Accepted Answer

A) True 
 B)False

Question 2

What type of interest occurs when there is a right to insure goods against any risk exposure such as damage or destruction?

Accepted Answer

A)  An insurable interest
B)  A subrogation interest
C)  A non-pecuniary interest
D)  An accord and satisfaction
E)  An abeyanceF) B) and E)
G) A) and B)

Question 3

With a simple delivery contract in which the seller is a merchant,which party sustains the loss if,through no fault of either party,the goods are destroyed through fire prior to delivery to the buyer?

Accepted Answer

A)  The seller
B)  The buyer
C)  Both the buyer and seller,with the loss being apportioned 50% to the buyer and 50% to the seller
D)  Both the buyer and seller,with the loss being apportioned 75% to the buyer and 25% to the seller
E)  Both the buyer and seller,with the loss being apportioned 25% to the buyer and 75% to the sellerF) A) and B)
G) C) and E)

Question 4

The Uniform Commercial Code does not require a contract modification to be supported by new consideration.

Accepted Answer

A) True 
 B)False

Question 5

A goods-in-________ contract involves goods that are in some kind of storage,so the seller cannot transfer physical possession of them.

Accepted Answer

A)  consignment
B)  abeyance
C)  equity
D)  subrogation
E)  bailmentF) A) and B)
G) B) and E)

Question 6

List five situations in which a buyer receives only voidable title in a contract for the sale of goods transaction.

Accepted Answer

A buyer gets only voidable title if: a)t...

Question 7

With a ________ contract,the buyer and seller typically execute an agreement,and the buyer leaves with the goods.

Accepted Answer

A)  sale-or-return
B)  sale-on-approval
C)  simple delivery
D)  FAS
E)  CIFF) A) and E)
G) A) and D)

Question 8

A contract is a sale-or-return contract if the seller allows the buyer to take possession of the goods before deciding whether to complete the contract by making the purchase.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following states has adopted only portions of the Uniform Commercial Code that do not conflict with its historically French-based code law?

Accepted Answer

A)  Louisiana
B)  Alabama
C)  Massachusetts
D)  Connecticut
E)  FloridaF) A) and C)
G) None of the above

Question 10

Federal law governs the formation of sales and lease contracts.

Accepted Answer

A) True 
 B)False

Question 11

When is an insurable interest in the buyer created in a simple delivery contract?

Accepted Answer

A)  When money is transferred from the buyer to the seller
B)  When the items are delivered to the buyer
C)  When the buyer takes possession
D)  When the goods are identified to the contract
E)  When the seller tenders delivery of the goods to the buyerF) A) and C)
G) A) and E) D

Question 12

Under the Uniform Commercial Code,contracts for the sale of goods must be in writing in order to be enforceable if they are priced at ________.

Accepted Answer

A)  $100 or more
B)  $500 or more
C)  $1,000 or more
D)  $1,000 or less
E)  $500 or lessF) B) and C)
G) A) and B)

Question 13

What type of agreement do contracting parties have when the sale itself is contingent on approval?

Accepted Answer

A)  A transferable contract
B)  An executed contract
C)  An implied-in-law contract
D)  A conditional sales contract
E)  A consignment contractF) B) and E)
G) A) and C)

Question 14

In terms of conditional sales contracts,a contract is a(n) ________ contract if the seller allows the buyer to take possession of the goods before deciding whether to complete the contract by making the purchase.

Accepted Answer

A)  sale-on-approval
B)  sale-or-return
C)  condition-on-sale
D)  illusory
E)  implied-in-lawF) B) and D)
G) All of the above

Question 15

A conditional sales contract is a type of contract that occurs when the purchased goods are in some kind of storage under the control of a third party,such as a warehouseman.

Accepted Answer

A) True 
 B)False

Question 16

In a goods-in-bailment contract,when is an insurable interest created?

Accepted Answer

A)  When the buyer has title to the goods
B)  When the seller has the risk of loss
C)  When either party has title,risk of loss,or some other economic interest attached to the goods
D)  Two days (forty-eight hours) after either party acquires title to the goods
E)  Never,because an insurable interest cannot exist in a goods-in-bailment contractF) A) and C)
G) A) and D) C

Question 17

Under Article 2(A) of the Uniform Commercial Code,a person who transfers the right to possession and use of goods under a lease is a(n) ________.

Accepted Answer

A)  delegator
B)  seller
C)  lessee
D)  lessor
E)  assignorF) C) and D)
G) A) and E)

Question 18

In a common-carrier delivery contract,the common carrier is:

Accepted Answer

A)  An independent contractor
B)  An agent of the seller
C)  An employee of the seller
D)  An independent contractor and an agent of the seller
E)  An agent and an employee of the sellerF) C) and D)
G) A) and B)

Question 19

Which of the following are types of conditional sales contracts?

Accepted Answer

A)  Sale-on-approval contracts
B)  Sale-or-return contracts
C)  Condition-on-sale contracts
D)  Sale-on-approval contracts,sale-or-return contracts,and condition-on-sale contracts
E)  Sale-on-approval contracts and sale-or-return contracts,but not condition-on-sale contractsF) All of the above
G) A) and B) E

Question 20

Under Article 2(A) of the Uniform Commercial Code,"a transfer of the right to possession and use of goods for a term in return for consideration" is a(n) ________.

Accepted Answer

A)  sale of goods
B)  lease
C)  assignment
D)  delegation
E)  consignmentF) D) and E)
G) B) and C)

Exam 15: Formation and Performance of Sales and Lease Contracts

A sale-on-approval contract occurs when the seller and buyer agree that the buyer may return the goods at a later time.

Correct AnswerverifiedShow Answer

What type of interest occurs when there is a right to insure goods against any risk exposure such as damage or destruction?

Correct AnswerverifiedShow Answer

With a simple delivery contract in which the seller is a merchant,which party sustains the loss if,through no fault of either party,the goods are destroyed through fire prior to delivery to the buyer?

Correct AnswerverifiedShow Answer

The Uniform Commercial Code does not require a contract modification to be supported by new consideration.

Correct AnswerverifiedShow Answer

A goods-in-________ contract involves goods that are in some kind of storage,so the seller cannot transfer physical possession of them.

Correct AnswerverifiedShow Answer

List five situations in which a buyer receives only voidable title in a contract for the sale of goods transaction.

Correct AnswerverifiedA buyer gets only voidable title if: a)t...View AnswerShow Answer

With a ________ contract,the buyer and seller typically execute an agreement,and the buyer leaves with the goods.

Correct AnswerverifiedShow Answer

A contract is a sale-or-return contract if the seller allows the buyer to take possession of the goods before deciding whether to complete the contract by making the purchase.

Correct AnswerverifiedShow Answer

Which of the following states has adopted only portions of the Uniform Commercial Code that do not conflict with its historically French-based code law?

Correct AnswerverifiedShow Answer

Federal law governs the formation of sales and lease contracts.

Correct AnswerverifiedShow Answer

When is an insurable interest in the buyer created in a simple delivery contract?

Correct AnswerverifiedD

Under the Uniform Commercial Code,contracts for the sale of goods must be in writing in order to be enforceable if they are priced at ________.

Correct AnswerverifiedShow Answer

What type of agreement do contracting parties have when the sale itself is contingent on approval?

Correct AnswerverifiedShow Answer

In terms of conditional sales contracts,a contract is a(n) ________ contract if the seller allows the buyer to take possession of the goods before deciding whether to complete the contract by making the purchase.

Correct AnswerverifiedShow Answer

A conditional sales contract is a type of contract that occurs when the purchased goods are in some kind of storage under the control of a third party,such as a warehouseman.

Correct AnswerverifiedShow Answer

In a goods-in-bailment contract,when is an insurable interest created?

Correct AnswerverifiedC

Under Article 2(A) of the Uniform Commercial Code,a person who transfers the right to possession and use of goods under a lease is a(n) ________.

Correct AnswerverifiedShow Answer

In a common-carrier delivery contract,the common carrier is:

Correct AnswerverifiedShow Answer

Which of the following are types of conditional sales contracts?

Correct AnswerverifiedE

Under Article 2(A) of the Uniform Commercial Code,"a transfer of the right to possession and use of goods for a term in return for consideration" is a(n) ________.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A buyer gets only voidable title if: a)t...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
D

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
C

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
E

Correct Answer
verified