Business Law Quiz-4
Multiple Choice Questions (Enter your answers on the enclosed answer sheet)
1) What is the definition of “goods” under Article 2 of the UCC?
a. ”Goods” are defined as tangible things that are immovable at the time of their identification to the contract.
b. ”Goods” are defined as fixtures.
c. ”Goods” are defined as intangible things that are immovable at the time of their identification to the contract.
d. ”Goods” are defined as intangible things that are movable at the time of their identification to the contract.
e. ”Goods” are defined as tangible things that are movable at the time of their identification to the contract.
3) Where a contract for the sale of goods does not mention the place of delivery for the goods, which of the following is true?
a. The seller is obligated to deliver the goods to the buyer’s place of business.
b. The contract fails for failure to state a material term.
c. The seller is obligated to deliver the goods at the seller’s place of business.
d. Sellers without a place of business are obligated to deliver the goods at the seller’s home.
e. Both C and D are true.
4) Under the UCC, if an offer is received by mail, the acceptance:
a. can be made by another means, but only if the offer so states.
b. must also be made by mail.
c. can be made in any commercially reasonable manner.
d. is effective only once it is received by the offeror.
e. can be canceled by the offeree at any time during the period of a fi rm offer.
6) What is required to meet the writing requirement of the statute of frauds under the UCC?
a. In cases where both parties are merchants, a writing signed by the party to be charged or a written confi rmation of an oral agreement that is sent by one party to the other and not objected to by the other party; in all other transactions, a writing signed by the party to be charged.
b. In cases where at least one party is a merchant, either a writing signed by the party to be charged or a written confi rmation of an oral agreement that is sent to the merchant and not objected to by the merchant; in transactions not involving a merchant, a writing signed by the person to be charged.
c. In cases where both parties are merchants, a writing signed by the party other than the party to be charged at the end of the document.
d. In all cases, a writing signed by the party to be charged.
e. In all cases, a writing signed by all parties to the contract.
11) Which of the following is true regarding a shipment contract?
a. Such contracts require the seller to bear the risk of loss to the goods during their transportation.
b. The risk of loss does not pass until the goods are tendered to the buyer at the specified destination.
c. It requires the seller to deliver conforming goods to the buyer by use of the seller’s own trucks.
d. It requires the seller to ship goods conforming to the contract to a buyer via a carrier.
e. It requires the seller to deliver conforming goods to a specific destination.
Unit 4 Examination
12) When a seller breaches a contract for the sale of goods by delivering nonconforming goods that are so nonconforming that the buyer has the right to reject them, the risk of loss:
a. is unaffected by the seller’s breach.
b. is transferred to the buyer as a matter of law within 24 hours.
c. remains on the seller until the nonconformity is cured or the buyer accepts the nonconforming
d. remains on the seller indefi nitely.
e. is transferred to the buyer upon delivery of the nonconforming goods, but is transferred
back to the seller if the buyer returns the goods.
14) In Lindholm v. Brandt, when Malmberg sold Lindholm’s “Red Elvis” to Brandt, thecourt found that:
a. Malmberg had been entrusted with the artwork but had a void title because he breached the terms of the entrustment so he couldn’t pass good title to Brandt.
b. Malmberg had been entrusted with the artwork and could pass the voidable title to Brandt because Brandt qualifi ed as a good faith purchaser.
c. Malmberg had stolen the artwork and could pass the void title to Brandt because Brandt qualifi ed as a good faith purchaser.
d. Malmberg had been entrusted with the artwork and could pass the void title to Brandt because Brandt qualifi ed as a good faith purchaser.
e. Malmberg had stolen the artwork, so he couldn’t pass his void title to Brandt.
16) Assuming that goods are nonconforming and that the nonconformity substantially
impairs their value to this buyer, which of the following additional factors must be
present for a valid revocation of the acceptance of goods?
a. Nothing else is necessary to revoke the acceptance of the goods.
b. The goods were accepted on the reasonable assumption that the seller could and
would cure the nonconformity.
c. The goods were accepted before the nonconformity was discovered, and the nonconformity
was diffi cult to discover.
d. Both B and C must be present in order to revoke the acceptance of the goods.
e. If either B or C is present, the acceptance of the goods can be revoked.
17) Which of the following must be met in every instance in order to revoke an acceptance
a. The seller’s promise to cure the nonconformity has not been met.
b. The seller must have fully paid for the goods prior to revocation.
c. The nonconformity is one that substantially impairs the value of the goods.
d. The goods were accepted before discovery of the nonconformity and the seller had
assured the buyer that the goods were conforming.
e. The goods were accepted before discovery of the nonconformity and the nonconformity
was one that was diffi cult to discover.
18) Which of the following is true regarding the rights of the buyer or lessee if the goods
fail to conform to the sales or lease contract in any way?
a. The buyer or lessee may accept the whole.
b. The buyer or lessee may reject the whole.
c. The buyer or lessee may accept any commercial unit and reject the rest.
d. Both A and B are true.
e. Both A, B, and C are true.
19) What is the right of the buyer or lessee to purchase or rent substitute goods if theseller or lessor fails to make delivery of the goods called?
a. The right to recovery.
b. The right to purchase.
c. The right to cover.
d. The right to recoup.
e. The right to capture.
20) What are the rights of the aggrieved party if an anticipatory repudiation occurs?
a. The aggrieved party may await performance by the repudiating party for a commercially
b. The aggrieved party must await performance for 7 days.
c. The aggrieved party may await performance for 48 hours.
d. The aggrieved party may treat the contract as breached at the time of the anticipatory
repudiation, which gives the aggrieved party an immediate cause of action.
e. Both A and D.
21) Which of the following is presumed to become part of the “basis of the bargain”?
b. All statements of opinion by the seller.
c. All statements of fact by the seller at the time the contract is made.
d. A and C only.
e. A and B only.s
Option A is not there for the above question
24) In Philip MorrisUSA v. Williams, the Supreme Court looked at the issue of punitive
damages in product liability suits and decided:
a. the Due Process Clause of the Constitution forbids the use of punitive damages to
punish a defendant for injuries to nonparties.
b. treble punitive damages are warranted in product liability cases.
c. punitive damages are not permitted in product liability suits.
d. punitive damages may not exceed 9X the compensatory damages.
e. the Equal Protection Clause of the Constitution forbids the use of punitive damages to
punish a defendant for injuries to nonparties.
25) Which of the following best describes the defense of correction of a defect?
a. The defense applies even in a situation where a user received a recall notice to correct
the defect but did not comply with the notice.
b. It applies only if the manufacturer replaces the defective product at no additional
charge to the owner.
c. The defense applies only if the particular sample of the item was repaired, thus fi xing
d. The defense applies if the user realizes there is a defect and assumes the risk.
e. The defense applies if a product is redesigned such that future production does not
contain the defect.
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