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Business Ethics 2016 - QUIZ & ANSWERS (12) - UCC Sales Contracts, Leases, and Warranties

Business Ethics 2016

BUSINESS ETHICS 2016

Case study guides and test bank and answer keys (2016)

The Legal Environment of Business and Online Commerce, 8e (Cheeseman)

 

 

The Legal Environment of Business and Online Commerce, 8e (Cheeseman)

Chapter 12   UCC Sales Contracts, Leases, and Warranties

 

1) The ________ is a model act passed in 1949 that includes comprehensive laws that cover most aspects of commercial transactions.

  1. A) Gramm-Leach Bliley Act
  2. B) Sarbanes-Oxley Act
  3. C) Uniform Sales Act
  4. D) Uniform Commercial Code

Answer:  D

Diff: 1

Skill:  Legal Concepts

LO:  12.1 Define sales contracts governed by Article 2 of the Uniform Commercial Code (UCC).

AACSB:  Analytical thinking

Classification:  Concept

 

2) Which of the following articles in the UCC deals with the sale of goods?

  1. A) Article 2
  2. B) Article 4
  3. C) Article 5
  4. D) Article 8

Answer:  A

Diff: 1

Skill:  Legal Concepts

LO:  12.1 Define sales contracts governed by Article 2 of the Uniform Commercial Code (UCC).

AACSB:  Analytical thinking

Classification:  Concept

 

 

3) Under which of the following transactions does title to goods pass from the seller to the buyer?

  1. A) an option contract
  2. B) a rental agreement
  3. C) a lease agreement
  4. D) a contract for the sale of goods

Answer:  D

Diff: 1

Skill:  Legal Concepts

LO:  12.1 Define sales contracts governed by Article 2 of the Uniform Commercial Code (UCC).

AACSB:  Analytical thinking

Classification:  Concept

 

 

4) A ________ is defined as the passing of title of goods from a seller to a buyer for a price.

  1. A) lease
  2. B) sale
  3. C) loan
  4. D) gift

Answer:  B

Diff: 1

Skill:  Legal Concepts

LO:  12.1 Define sales contracts governed by Article 2 of the Uniform Commercial Code (UCC).

AACSB:  Analytical thinking

Classification:  Concept

5) Which of the following sales is covered by Article 2 of the UCC?

  1. A) the sale of intangible goods
  2. B) the sale of tangible goods
  3. C) the sale of real estate
  4. D) the sale of stocks

Answer:  B

Diff: 1

Skill:  Legal Concepts

LO:  12.1 Define sales contracts governed by Article 2 of the Uniform Commercial Code (UCC).

AACSB:  Analytical thinking

Classification:  Concept

 

6) Which of the following describes a mixed sale?

  1. A) a sale that involves two or more intangible goods
  2. B) a sale that involves the passing of title of goods from a seller to a buyer for a price
  3. C) a sale that involves the possession and use of named goods for a set price
  4. D) a sale that involves the provision of a service and a good in the same transaction

Answer:  D

Diff: 1

Skill:  Legal Concepts

LO:  12.1 Define sales contracts governed by Article 2 of the Uniform Commercial Code (UCC).

AACSB:  Analytical thinking

Classification:  Concept

 

 

7) Article 2 of the Uniform Commercial Code is also applied by federal courts to sales contracts governed by federal law.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  12.1 Define sales contracts governed by Article 2 of the Uniform Commercial Code (UCC).

AACSB:  Analytical thinking

Classification:  Concept

 

8) Article 2 of the UCC applies to sales contracts for the sale of intangible goods.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  12.1 Define sales contracts governed by Article 2 of the Uniform Commercial Code (UCC).

AACSB:  Analytical thinking

Classification:  Concept

 

9) If a person buys a computer, the sales contract for it would be subject to Article 2 of the UCC.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  12.1 Define sales contracts governed by Article 2 of the Uniform Commercial Code (UCC).

AACSB:  Analytical thinking

Classification:  Concept

 

10) Only movable goods come under the scope of Article 2 of the UCC.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  12.1 Define sales contracts governed by Article 2 of the Uniform Commercial Code (UCC).

AACSB:  Analytical thinking

Classification:  Concept

 

11) Contracts for the provision of services are not covered by Article 2 of the UCC.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  12.1 Define sales contracts governed by Article 2 of the Uniform Commercial Code (UCC).

AACSB:  Analytical thinking

Classification:  Concept

 

 

12) Sales that contain provisions of services and goods in the same transaction are not covered by Article 2 of the UCC.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  12.1 Define sales contracts governed by Article 2 of the Uniform Commercial Code (UCC).

AACSB:  Analytical thinking

Classification:  Concept

 

13) The ________ refers to a model act that includes comprehensive laws that cover most aspects of commercial transactions.

Answer:  Uniform Commercial Code (UCC)

Diff: 1

Skill:  Legal Concepts

LO:  12.1 Define sales contracts governed by Article 2 of the Uniform Commercial Code (UCC).

AACSB:  Analytical thinking

Classification:  Concept

 

14) Article 2 of the UCC governs ________.

Answer:  sales of goods

Diff: 1

Skill:  Legal Concepts

LO:  12.1 Define sales contracts governed by Article 2 of the Uniform Commercial Code (UCC).

AACSB:  Analytical thinking

Classification:  Concept

15) What are the provisions for contracts with services under Article 2 of the UCC?

Answer:  Contracts for the provision of services–including legal services, medical services, and dental services–are not covered by Article 2. Sometimes, however, a sale involves both the provision of a service and a good in the same transaction. This sale is referred to as a mixed sale. Article 2 applies to mixed sales only if the goods are the predominant part of the transaction. Whether the sale of goods is the predominant part of a mixed sale is decided by courts on a case-by-case basis.

Diff: 1

Skill:  Legal Concepts

LO:  12.1 Define sales contracts governed by Article 2 of the Uniform Commercial Code (UCC).

AACSB:  Analytical thinking

Classification:  Concept

 

 

16) A ________ is a transfer of the right to the possession and use of named goods for a set term in return for certain consideration.

  1. A) trade
  2. B) gift
  3. C) lease
  4. D) sale

Answer:  C

Diff: 1

Skill:  Legal Concepts

LO:  12.2 Define lease contracts governed by Article 2A of the UCC.

AACSB:  Analytical thinking

Classification:  Concept

 

17) A person who transfers the right of possession and use of goods under a lease is known as the ________.

  1. A) lessor
  2. B) lessee
  3. C) seller
  4. D) consignee

Answer:  A

Diff: 1

Skill:  Legal Concepts

LO:  12.2 Define lease contracts governed by Article 2A of the UCC.

AACSB:  Analytical thinking

Classification:  Concept

 

18) Which of the following does Article 2A of the Uniform Commercial Code govern?

  1. A) mixed sales
  2. B) deposits
  3. C) leases
  4. D) letters of credit

Answer:  C

Diff: 1

Skill:  Legal Concepts

LO:  12.2 Define lease contracts governed by Article 2A of the UCC.

AACSB:  Analytical thinking

Classification:  Concept

 

 

19) Whistle Cabs, a taxi service company, has been ordered by the traffic department to upgrade its taxi meters to digital ones. Whistle Cabs contemplates a sales contract with Running Electricals, a company that manufactures digital taxi meters. Due to short notice from the city and a lack of funding, however, Whistle Cabs instead approaches Goldmint Bank, which purchases the digital taxi meters from Running Electricals and delivers them to Whistle Cabs. The contract between Whistle Cabs and Goldmint Bank allows the taxi service company to use the taxi meters for a set period of time by providing monthly rentals. What is the nature of the contract made between Whistle Cabs and Goldmint Bank?

  1. A) a counteroffer
  2. B) a lease
  3. C) a sale of goods
  4. D) an option contract

Answer:  B

Diff: 2

Skill:  Factual Application

LO:  12.2 Define lease contracts governed by Article 2A of the UCC.

AACSB:  Application of knowledge

Classification:  Application

 

20) Article 2A of the UCC deals with lessors and lessees.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  12.2 Define lease contracts governed by Article 2A of the UCC.

AACSB:  Analytical thinking

Classification:  Concept

 

21) In a lease contract, the title of goods is passed from the lessor to the lessee.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  12.2 Define lease contracts governed by Article 2A of the UCC.

AACSB:  Analytical thinking

Classification:  Concept

 

22) Article ________ of the UCC governs leases of goods.

Answer:  2A

Diff: 1

Skill:  Legal Concepts

LO:  12.2 Define lease contracts governed by Article 2A of the UCC.

AACSB:  Analytical thinking

Classification:  Concept

 

 

23) A transfer of the right to the possession and use of named goods for a set term in return for certain consideration is known as ________.

Answer:  lease

Diff: 1

Skill:  Legal Concepts

LO:  12.2 Define lease contracts governed by Article 2A of the UCC.

AACSB:  Analytical thinking

Classification:  Concept

24) Under the UCC, if the time, place, and manner of delivery of goods are not mentioned in a contract, ________.

  1. A) the place of delivery is the buyer's place of business
  2. B) the contract is void for lack of definiteness
  3. C) the place of delivery is the seller's place of business
  4. D) the seller is obligated to pay for shipping to the buyer's place of business

Answer:  C

Diff: 2

Skill:  Legal Concepts

LO:  12.3 Describe the formation, performance, and remedies for breach of sales and lease contracts.

AACSB:  Analytical thinking

Classification:  Concept

 

25) The UCC rule that says that a merchant who offers to buy, sell, or lease goods and gives a written and signed assurance on a separate form that the offer will be held open cannot revoke the offer for the time stated or, if no time is stated, for a reasonable time is referred to as the ________.

  1. A) gap-filling rule
  2. B) firm offer rule
  3. C) mirror-image rule
  4. D) open term rule

Answer:  B

Diff: 1

Skill:  Legal Concepts

LO:  12.3 Describe the formation, performance, and remedies for breach of sales and lease contracts.

AACSB:  Analytical thinking

Classification:  Concept

 

 

26) A contract is created when ________.

  1. A) the acceptance has been received by the offeror
  2. B) an acknowledgement is sent by the offeror to the offeree of receiving an acceptance
  3. C) the offeree mails the acceptance
  4. D) a written acceptance has been passed between the offeror and the offeree

Answer:  C

Diff: 1

Skill:  Legal Concepts

LO:  12.3 Describe the formation, performance, and remedies for breach of sales and lease contracts.

AACSB:  Analytical thinking

Classification:  Concept

 

27) According to the mirror image rule, which of the following is true of additional terms being added in an acceptance?

  1. A) They are considered to be counteroffers.
  2. B) They can be added when the sale is between a merchant and a non-merchant.
  3. C) They can be added to the contract without the consent of the offeror.
  4. D) They are considered to constitute acceptance.

Answer:  A

Diff: 1

Skill:  Legal Concepts

LO:  12.3 Describe the formation, performance, and remedies for breach of sales and lease contracts.

AACSB:  Analytical thinking

Classification:  Concept

 

28) The ________ requires all contracts for the sale of goods costing $500 or more and lease contracts involving payments of $1,000 or more to be in writing.

  1. A) parol evidence rule
  2. B) open price term
  3. C) firm offer rule
  4. D) Statute of Frauds

Answer:  D

Diff: 1

Skill:  Legal Concepts

LO:  12.3 Describe the formation, performance, and remedies for breach of sales and lease contracts.

AACSB:  Analytical thinking

Classification:  Concept

 

 

29) Kimberley, a merchant seller in Kansas, had an oral contract to sell goods to Jane, a merchant buyer in Memphis, for $100,000. Two days after contracting, Kimberley sends a sufficient written confirmation to Jane of the agreed-upon transaction. Jane, who has reason to know the contents of the written confirmation, fails to immediately object to the contents of the confirmation. Two weeks after receiving the written confirmation, Jane receives delivery of the goods from Kimberley, and Jane then sends an objection to the written confirmation to Kimberley. Which of the following is true of the contract between Kimberley and Jane?

  1. A) The Statute of Frauds can be raised against the contract because a letter of objection was sent to the offeror.
  2. B) The offer is valid as the offeree knew the contents of the confirmation and did not object within 10 days.
  3. C) The contract is void as the offeror did not receive a letter of confirmation from the offeree for delivery.
  4. D) The Statute of Frauds can be raised because the offeree did not sign the contract.

Answer:  B

Diff: 2

Skill:  Factual Application

LO:  12.3 Describe the formation, performance, and remedies for breach of sales and lease contracts.

AACSB:  Application of knowledge

Classification:  Application

 

30) Which of the following is an accurate statement regarding the risk of loss in a shipment contract after the seller delivers conforming goods to the carrier?

  1. A) The seller bears the risk of loss during transportation.
  2. B) The buyer bears the risk of loss during transportation.
  3. C) The seller and the buyer equally bear the risk of loss during transportation.
  4. D) The seller bears one-third of the risk of loss and the buyer bears two-thirds of the risk of loss during transportation.

Answer:  B

Diff: 1

Skill:  Legal Concepts

LO:  12.3 Describe the formation, performance, and remedies for breach of sales and lease contracts.

AACSB:  Analytical thinking

Classification:  Concept

 

31) Which of the following is an accurate statement regarding the risk of loss in a destination contract after the seller delivers conforming goods to the carrier?

  1. A) The seller bears the risk of loss during transportation.
  2. B) The buyer bears the risk of loss during transportation.
  3. C) The seller and the buyer equally bear the risk of loss during transportation.
  4. D) The buyer bears one-third of the risk of loss and the seller bears two-thirds of the risk of loss during transportation.

Answer:  A

Diff: 1

Skill:  Legal Concepts

LO:  12.3 Describe the formation, performance, and remedies for breach of sales and lease contracts.

AACSB:  Analytical thinking

Classification:  Concept

 

32) In which of the following contracts is the term "no-arrival, no-sale" found?

  1. A) a shipment contract
  2. B) a destination contract
  3. C) a contract to sell real estate
  4. D) a consignment contract

Answer:  B

Diff: 1

Skill:  Legal Concepts

LO:  12.3 Describe the formation, performance, and remedies for breach of sales and lease contracts.

AACSB:  Analytical thinking

Classification:  Concept

 

33) Larry, a merchant seller, had contracted with Simon to buy welding equipment. The contract stipulated that Larry would pick up the equipment from Simon's warehouse on the 14th day from the date of the contract. Larry could not make the pick-up on the stipulated date and before he could do so on the 15th day, the warehouse and its contents were destroyed by arsonists. In this situation, who bears the risk of loss for the goods that were to be received by Larry?

  1. A) The risk of loss lies with Larry for delaying the pick-up.
  2. B) The risk of loss lies with Simon for not protecting the goods from the arsonists.
  3. C) The risk of loss is equally shared by Larry and Simon.
  4. D) The risk of loss is shifted to the persons responsible for the fire.

Answer:  A

Diff: 2

Skill:  Factual Application

LO:  12.3 Describe the formation, performance, and remedies for breach of sales and lease contracts.

AACSB:  Application of knowledge

Classification:  Application

 

 

34) A title for goods obtained by a seller through fraud, impersonation, or a dishonored check is referred to as a(n) ________.

  1. A) unenforceable title
  2. B) voidable title
  3. C) conditional title
  4. D) unequivocal title

Answer:  B

Diff: 1

Skill:  Legal Concepts

LO:  12.3 Describe the formation, performance, and remedies for breach of sales and lease contracts.

AACSB:  Analytical thinking

Classification:  Concept

 

35) Steve brings his watch to Knell Watches, a store that sells and repairs watches, to be repaired. The watch store repairs the watch and then sells it to Kevin, who buys the watch with a fraudulent check that bounces. Kevin then resells the watch to his friend Jonathan, who is unaware of the stolen status of the watch. Who can legally claim ownership over the watch in court?

  1. A) Jonathan
  2. B) Steve
  3. C) Knell Watches
  4. D) Kevin

Answer:  A

Diff: 2

Skill:  Factual Application

LO:  12.3 Describe the formation, performance, and remedies for breach of sales and lease contracts.

AACSB:  Application of knowledge

Classification:  Application

 

36) Who among the following is a good faith purchaser?

  1. A) a person who buys goods from a person with a voidable title
  2. B) a person who buys stolen goods without being aware of it
  3. C) a buyer who agrees to hold goods for a person until the delivery of the goods is made
  4. D) a buyer to whom goods are delivered by a seller to sell on the seller's behalf

Answer:  A

Diff: 2

Skill:  Legal Concepts

LO:  12.3 Describe the formation, performance, and remedies for breach of sales and lease contracts.

AACSB:  Analytical thinking

Classification:  Concept

 

37) In which of the following cases does a seller have the right to stop delivery of goods in transit, regardless of the size of the shipment?

  1. A) if the buyer repudiates the contract
  2. B) if the buyer has payments due
  3. C) if the seller learns of the buyer's insolvency
  4. D) if the seller has been ordered for specific performance

Answer:  C

Diff: 1

Skill:  Legal Concepts

LO:  12.3 Describe the formation, performance, and remedies for breach of sales and lease contracts.

AACSB:  Analytical thinking

Classification:  Concept

 

38) Klint Microsystems, a microprocessor manufacturer, was contracted by Zeitar Studios to manufacture specially designed microchips to be used in an audio engineering process. Zeitar was to pay Klint $300,000 as per the contract. Klint decided to redesign its existing microchips and make them suitable for Zeitar. While the finished microchips were being shipped via a carrier, Klint was informed of Zeitar's insolvency. Klint cancelled the shipment before it was delivered. Klint then resold the chips to another studio where it had to settle for $150,000, as the chips were now suitable for specific audio engineering processes only. What remedy did Klint exercise when it stopped shipment to Zeitar?

  1. A) remedy to dispose of goods
  2. B) remedy to stop goods in transit
  3. C) remedy to obtain specific performance
  4. D) remedy to recover purchase rent

Answer:  B

Diff: 2

Skill:  Factual Application

LO:  12.3 Describe the formation, performance, and remedies for breach of sales and lease contracts.

AACSB:  Application of knowledge

Classification:  Application

 

 

39) Pollard enters into a sales contract to purchase a specific Picasso painting from Jenson for $15 million. When Pollard tenders payment, Jenson refuses to sell the painting. Which of the following remedy can Pollard exercise to retrieve the painting from Jenson?

  1. A) remedy to cover
  2. B) remedy to recover damages for nondelivery
  3. C) remedy to obtain specific performance
  4. D) remedy to cancel the contract

Answer:  C

Diff: 2

Skill:  Factual Application

LO:  12.3 Describe the formation, performance, and remedies for breach of sales and lease contracts.

AACSB:  Application of knowledge

Classification:  Application

 

40) Blue Rorschach Inc. has an immediate requirement for 80 laptops and contracts with Zenzo Electronics for 80 OSN laptops at $550 each. But Zenzo Electronics breaches the contract and fails to deliver the laptops. Blue Rorschach then immediately contracts Dell Computers, buys 100 laptops at $600 per laptop, and then sues Zenzo Electronics for the breach of contract. What remedy did Blue Rorschach exercise when contracting Dell Computers and suing Zenzo for failure of delivery of goods?

  1. A) remedy to replevy goods
  2. B) remedy to cover
  3. C) remedy to recover damages for accepted nonconforming goods
  4. D) remedy to obtain specific performance

Answer:  B

Diff: 2

Skill:  Factual Application

LO:  12.3 Describe the formation, performance, and remedies for breach of sales and lease contracts.

AACSB:  Application of knowledge

Classification:  Application

 

41) If the parties to a sales contract do not agree to the time, place, and manner of delivery of the goods, the place for delivery is the seller's place of business.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  12.3 Describe the formation, performance, and remedies for breach of sales and lease contracts.

AACSB:  Analytical thinking

Classification:  Concept

 

 

42) The firm offer rule allows the offeror to revoke an offer at any point of time prior to the acceptance.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  12.3 Describe the formation, performance, and remedies for breach of sales and lease contracts.

AACSB:  Analytical thinking

Classification:  Concept

 

43) A sales or lease contract is only created when the offeror receives the offeree's acceptance.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  12.3 Describe the formation, performance, and remedies for breach of sales and lease contracts.

AACSB:  Analytical thinking

Classification:  Concept

 

44) According to the Statute of Frauds, all contracts for the sale of goods costing $500 or more must be in writing.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  12.3 Describe the formation, performance, and remedies for breach of sales and lease contracts.

AACSB:  Analytical thinking

Classification:  Concept

45) In a destination contract, the seller is required to replace any goods lost in transit.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  12.3 Describe the formation, performance, and remedies for breach of sales and lease contracts.

AACSB:  Analytical thinking

Classification:  Concept

 

46) In a case in which a buyer purchases goods from a thief who has stolen them, the purchaser does not acquire title to the goods.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  12.3 Describe the formation, performance, and remedies for breach of sales and lease contracts.

AACSB:  Analytical thinking

Classification:  Concept

 

47) A person with voidable title to goods can transfer title to a good faith purchaser for value.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  12.3 Describe the formation, performance, and remedies for breach of sales and lease contracts.

AACSB:  Analytical thinking

Classification:  Concept

 

48) An e-contract is made when the offeree sends an e-mail or another electronic document to the offeror.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  12.3 Describe the formation, performance, and remedies for breach of sales and lease contracts.

AACSB:  Analytical thinking

Classification:  Concept

 

49) Unless otherwise unambiguously indicated by language or circumstance, an offer to make a sales or lease contract may be accepted in any manner and by any reasonable medium of acceptance.

Answer:  TRUE

Diff: 2

Skill:  Legal Concepts

LO:  12.3 Describe the formation, performance, and remedies for breach of sales and lease contracts.

AACSB:  Analytical thinking

Classification:  Concept

 

50) The right to withhold delivery is available to the seller if the buyer or lessee wrongfully rejects or revokes acceptance of the goods.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  12.3 Describe the formation, performance, and remedies for breach of sales and lease contracts.

AACSB:  Analytical thinking

Classification:  Concept

 

 

51) The ________ rule permits certain open terms to be "read into" a sales or lease contract.

Answer:  gap-filling

Diff: 1

Skill:  Legal Concepts

LO:  12.3 Describe the formation, performance, and remedies for breach of sales and lease contracts.

AACSB:  Analytical thinking

Classification:  Concept

 

52) If the parties to a sales contract do not agree to the time, place, and manner of delivery of the goods, the place for delivery is ________.

Answer:  the seller's place of business

Diff: 1

Skill:  Legal Concepts

LO:  12.3 Describe the formation, performance, and remedies for breach of sales and lease contracts.

AACSB:  Analytical thinking

Classification:  Concept

 

53) In a destination contract, the ________ bears the risk of loss of the goods during their transportation.

Answer:  seller

Diff: 1

Skill:  Legal Concepts

LO:  12.3 Describe the formation, performance, and remedies for breach of sales and lease contracts.

AACSB:  Analytical thinking

Classification:  Concept

 

54) The term ________ refers to a situation in which a thief acquires no title to goods he or she steals.

Answer:  void title

Diff: 1

Skill:  Legal Concepts

LO:  12.3 Describe the formation, performance, and remedies for breach of sales and lease contracts.

AACSB:  Analytical thinking

Classification:  Concept

 

 

55) A seller or lessor has ________ if he obtained the goods through fraud, if his check for the payment of the goods or lease is dishonored, or if he impersonated another person.

Answer:  voidable title/voidable leasehold interest to goods

Diff: 1

Skill:  Legal Concepts

LO:  12.3 Describe the formation, performance, and remedies for breach of sales and lease contracts.

AACSB:  Analytical thinking

Classification:  Concept

 

56) ________ are damages that will be paid upon a breach of contract that are established in advance.

Answer:  Liquidated damages

Diff: 1

Skill:  Legal Concepts

LO:  12.3 Describe the formation, performance, and remedies for breach of sales and lease contracts.

AACSB:  Analytical thinking

Classification:  Concept

57) What is the passage of title to goods?

Answer:  Once the goods that are the subject of a contract exist and have been identified, title to the goods may be transferred from the seller to the buyer. Under the UCC 2-401(1), title to goods passes from the seller to the buyer in any manner and on any conditions explicitly agreed upon by the parties. If the parties do not agree to a specific time, title passes to the buyer when and where the seller's performance with reference to the physical delivery is completed.

Diff: 2

Skill:  Legal Concepts

LO:  12.3 Describe the formation, performance, and remedies for breach of sales and lease contracts.

AACSB:  Analytical thinking

Classification:  Concept

 

 

58) How does the UCC treat goods that were fraudulently obtained?

Answer:  A seller or lessor has voidable title or voidable leasehold interest to goods if he or she obtained the goods through fraud, if his or her check for the payment of the goods or lease is dishonored, or if the seller or lessor impersonated another person. A person with voidable title to goods can transfer good title to a good faith purchaser for value or a good leasehold interest to a good faith subsequent lessee. A good faith purchaser or lessee for value is someone who pays sufficient consideration or rent for the goods to the person he or she honestly believes has good title to or leasehold interest in those goods. The real owner cannot reclaim goods from such a purchaser or lessee.

Diff: 2

Skill:  Legal Concepts

LO:  12.3 Describe the formation, performance, and remedies for breach of sales and lease contracts.

AACSB:  Analytical thinking

Classification:  Concept

 

59) A ________ is a seller's or lessor's express or implied assurance to a buyer or lessee that the goods sold or leased meet certain quality standards.

  1. A) bond
  2. B) caveat emptor
  3. C) warranty
  4. D) collateral

Answer:  C

Diff: 1

Skill:  Legal Concepts

LO:  12.4 List and describe express and implied warranties.

AACSB:  Analytical thinking

Classification:  Concept

 

60) A warranty that is created when a seller or lessor makes an affirmation that the goods he or she is selling or leasing meet certain standards of quality, description, performance, or condition is known as a(n) ________ warranty.

  1. A) implied
  2. B) conditional
  3. C) closed
  4. D) express

Answer:  D

Diff: 1

Skill:  Legal Concepts

LO:  12.4 List and describe express and implied warranties.

AACSB:  Analytical thinking

Classification:  Concept

 

 

61) Which of the following would constitute the creation of an express warranty for goods?

  1. A) a description of the goods
  2. B) a commendation of the goods
  3. C) prior experience with the goods
  4. D) affirmation of the value of the goods

Answer:  A

Diff: 1

Skill:  Legal Concepts

LO:  12.4 List and describe express and implied warranties.

AACSB:  Analytical thinking

Classification:  Concept

 

62) Sam expressed interest in buying a painting from Jasper, whose asking price was $15,000. Sam was only willing to offer $13,000. Jasper told him that it was a very old painting worth a fortune and that others would gladly pay $20,000 for it. Sam decided to buy the painting for $15,000 on the condition that if he found that the painting was worth less than $15,000, Jasper would have to take the painting back and refund Sam. Which of the following warranties did this sales contract have?

  1. A) an implied warranty of merchantability
  2. B) an express warranty
  3. C) a statement of opinion
  4. D) an implied warranty of fitness

Answer:  B

Diff: 2

Skill:  Factual Application

LO:  12.4 List and describe express and implied warranties.

AACSB:  Application of knowledge

Classification:  Application

63) Unless properly disclosed, a warranty that is implied that sold or leased goods are fit for the ordinary purpose for which they are sold or leased, as well as other assurances, is known as ________.

  1. A) implied volatility
  2. B) an implied cause of action
  3. C) an implied assertion
  4. D) the implied warranty of merchantability

Answer:  D

Diff: 1

Skill:  Legal Concepts

LO:  12.4 List and describe express and implied warranties.

AACSB:  Analytical thinking

Classification:  Concept

 

 

64) Which of the following constitutes an implied warranty?

  1. A) affirmation of the facts of the goods
  2. B) description of the goods
  3. C) model or sample of the goods
  4. D) adequate packaging and labeling of the goods

Answer:  D

Diff: 1

Skill:  Legal Concepts

LO:  12.4 List and describe express and implied warranties.

AACSB:  Analytical thinking

Classification:  Concept

 

65) Which of the following is true of an "as is" disclaimer?

  1. A) It disclaims all implied warranties.
  2. B) It disclaims all express warranties.
  3. C) It is a type of implied warranty.
  4. D) It cannot be replaced by another warranty.

Answer:  A

Diff: 1

Skill:  Legal Concepts

LO:  12.4 List and describe express and implied warranties.

AACSB:  Analytical thinking

Classification:  Concept

 

66) What type of transactions are covered under the Magnuson-Moss Warranty Act?

  1. A) consumer transactions
  2. B) commercial transactions
  3. C) industrial transactions
  4. D) governmental transactions

Answer:  A

Diff: 1

Skill:  Legal Concepts

LO:  12.4 List and describe express and implied warranties.

AACSB:  Analytical thinking

Classification:  Concept

 

67) Only written express warranties are valid.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  12.4 List and describe express and implied warranties.

AACSB:  Analytical thinking

Classification:  Concept

 

 

68) A seller's or lessor's statement of opinion or commendation of the goods does not create an express warranty.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  12.4 List and describe express and implied warranties.

AACSB:  Analytical thinking

Classification:  Concept

 

69) The implied warranty of merchantability requires that the quality of the goods must pass without objection in the trade.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  12.4 List and describe express and implied warranties.

AACSB:  Analytical thinking

Classification:  Concept

 

70) The implied warranty of fitness for a particular purpose applies only to merchants.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  12.4 List and describe express and implied warranties.

AACSB:  Analytical thinking

Classification:  Concept

 

71) Implied warranties of quality cannot be disclaimed.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  12.4 List and describe express and implied warranties.

AACSB:  Analytical thinking

Classification:  Concept

 

72) If the "as is" type of disclaimer is not used, a disclaimer of the implied warranty of merchantability must specifically mention the term merchantability for the implied warranty of merchantability to be disclaimed.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  12.4 List and describe express and implied warranties.

AACSB:  Analytical thinking

Classification:  Concept

 

73) The doctrine of ________ governed the law of sales and leases for centuries before the UCC was adopted.

Answer:  caveat emptor

Diff: 1

Skill:  Legal Concepts

LO:  12.4 List and describe express and implied warranties.

AACSB:  Analytical thinking

Classification:  Concept

 

74) A(n) ________ is a warranty created when a seller or lessor makes an affirmation that the goods he or she is selling or leasing meet certain standards of quality, description, performance, or condition.

Answer:  express warranty

Diff: 1

Skill:  Legal Concepts

LO:  12.4 List and describe express and implied warranties.

AACSB:  Analytical thinking

Classification:  Concept

 

75) A(n) ________ refers to a warranty that arises where a seller or lessor warrants that the goods will meet the buyer's or lessee's expressed needs.

Answer:  implied warranty of fitness for a particular purpose

Diff: 1

Skill:  Legal Concepts

LO:  12.4 List and describe express and implied warranties.

AACSB:  Analytical thinking

Classification:  Concept

 

76) A statement that negates express and implied warranties is known as a ________.

Answer:  warranty disclaimer

Diff: 1

Skill:  Legal Concepts

LO:  12.4 List and describe express and implied warranties.

AACSB:  Analytical thinking

Classification:  Concept

 

77) The ________ is a federal statute that regulates written warranties on consumer products.

Answer:  Magnuson-Moss Warranty Act

Diff: 1

Skill:  Legal Concepts

LO:  12.4 List and describe express and implied warranties.

AACSB:  Analytical thinking

Classification:  Concept

 

 

78) Give an account of express warranties.

Answer:  Express warranties are created when a seller or lessor affirms that the goods he or she is selling or leasing meet certain standards of quality, description, performance, or condition. Express warranties can be either written, oral, or inferred from the seller's conduct. It is not necessary to use formal words such as warrant or guarantee to create an express warranty. A seller's or lessor's statement of opinion (i.e., puffing) or commendation of goods does not create an express warranty. It is often difficult to determine whether a seller's statement is an affirmation of fact (which creates an express warranty) or a statement of opinion (which does not create a warranty). An affirmation of the value of goods does not create an express warranty.

Diff: 1

Skill:  Legal Concepts

LO:  12.4 List and describe express and implied warranties.

AACSB:  Analytical thinking

Classification:  Concept

 

79) What is the difference between a full warranty and a limited warranty?

Answer:  For a warranty to qualify as a full warranty, the warrantor must guarantee that a defective product will be repaired or replaced free during the warranty period. The warrantor must indicate whether there is a time limit on the full warranty.

In a limited warranty, the warrantor limits the scope of the warranty in some way. A warranty that covers the costs of parts, but not labor, to fix a defective product is a limited warranty. Limited warranties are made more often by sellers and lessors than are full warranties.

Diff: 2

Skill:  Legal Concepts

LO:  12.4 List and describe express and implied warranties.

AACSB:  Analytical thinking

Classification:  Concept

 

80) A computer program or an electronic or other automated means used independently to initiate an action or respond to electronic records or performances in whole or in part, without review or action by an individual, is known as a(n) ________.

  1. A) electronic agent
  2. B) electronic record
  3. C) firewall
  4. D) operating system

Answer:  A

Diff: 1

Skill:  Legal Concepts

LO:  12.5 Describe e-sales contracts and e-license contracts.

AACSB:  Analytical thinking

Classification:  Concept

 

 

81) The signature of a person's electronic agent can constitute a valid electronic signature.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  12.5 Describe e-sales contracts and e-license contracts.

AACSB:  Analytical thinking

Classification:  Concept

82) An e-record is a record created, generated, sent, communicated, received, or stored by electronic means.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  12.5 Describe e-sales contracts and e-license contracts.

AACSB:  Analytical thinking

Classification:  Concept

 

83) An electronic agent allows for the contracting for the sale and lease of goods over the Internet, using websites to order or lease goods.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  12.5 Describe e-sales contracts and e-license contracts.

AACSB:  Analytical thinking

Classification:  Concept

 

 

------

Free Business Ethics Resources

1. See full list of videos: 

Link 1 - Youtube channel www.youtube.com/ecomftu2012

Link 2 - Youtube channel 

2. Free Business Ethics - 2016 Ebooks (free download)

Legal Environment of Business: Online Commerce, Ethics, and Global Issues, 8th Edition, 2016, Henry R. Cheeseman

REVEL for Ethics and the Conduct of Business -- Access Card, 8th Edition, 2016, John R Boatright, Jeffery D. Smith

Business Ethics: Concepts and Cases, 7th Edition, 2012, Manuel G. Velasquez, Santa Clara University

 

3. Link to power point slides (Free Download)

REVEL for Ethics and the Conduct of Business -- Access Card, 8th Edition, 2016, John R Boatright, Jeffery D. Smith

LINK DOWNLOAD FREE PPT - LINK

Legal Environment of Business: Online Commerce, Ethics, and Global Issues, 8th Edition, 2016, Henry R. Cheeseman

LINK DOWNLOAD FREE PPT - LINK

Business Ethics: Concepts and Cases, 7th Edition, 2012, Manuel G. Velasquez, Santa Clara University

4. Test Bank - Free download

Legal Environment of Business: Online Commerce, Ethics, and Global Issues, 8th Edition, 2016, Henry R. Cheeseman

Link - Test bank - free download 

REVEL for Ethics and the Conduct of Business -- Access Card, 8th Edition, 2016, John R Boatright, Jeffery D. Smith

Link - Test bank - free download

 

For Test Bankz, Quiz Answers and Case study Guides, email to: This email address is being protected from spambots. You need JavaScript enabled to view it.

 

Good Luck and Success, Enjoy Your Study !

 

----------

 

       

 

Business Ethics 2016, Lecture, Video, Case Study Guides and Quiz, Test Bank, Free Download
------
Revel for Ethics and the Conduct of Business, 8th Edition, 2016, John R Boatright, Jeffery D. Smith
Legal Environment of Business: Online Commerce, Ethics, and Global Issues, 8th Edition, 2016, Henry R. Cheeseman
Business Ethics: Concepts and Cases, 7th Edition, 2012, Manuel G. Velasquez, Santa Clara University

------
1. Ethics in the World of Business
2. Ethical Decision Making
3. Ethical Theories
4. Whistle-Blowing
5. Business Information and Conflict of Interest
6. Privacy
7. Discrimination and Affirmative Action
8. Employment Rights
9. Health and Safety
10. Marketing and Advertising
11. Ethics in Finance
12. Corporate Social Responsibility
13. Governance, Accountability, and Compliance
14. International Business Ethics
------
Part I: Legal and Ethical Environment

1. Legal Heritage and the Digital Age
2. Ethics and Social Responsibility of Business
3. Courts, Jurisdiction, and Administrative Law
4. Judicial, Alternative, and E-Dispute Resolution

Part II: Constitution and Public Law
5. Constitutional Law for Business and E-Commerce
6. Torts and Strict Liability
7. Criminal Law and Cyber Crimes
8. Intellectual Property and Cyber Piracy

Part III: Contracts, Commercial Law, and E-Commerce
9. Formation and Requirements of Contracts
10. Performance and Breach of Contracts
11. Digital Law and E-Commerce
12. UCC Sales Contracts, Leases, and Warranties
13. Credit, Secured Transactions, and Bankruptcy

Part IV: Business Organizations, Corporate Governance, and Investor Protection
14. Small Business, General Partnerships, and Limited Partnerships
15. Limited Liability Companies, Limited Liability Partnerships, and Special Forms of Business
16. Corporations and Corporate Governance
17. Investor Protection and E-Securities Transactions

Part V: Agency, Employment, and Labor Law
18. Agency Law
19. Equal Opportunity in Employment
20. Employment Law and Worker Protection
21. Labor Law and Immigration Law

Part VI: Government Regulation
22. Antitrust Law and Unfair Trade Practices
23. Consumer Protection
24. Environmental Protection
25. Real Property and Land Use Regulation

Part VII: Global Environment
26. International and World Trade Law

Part VIII: Accounting Profession
27. Accountants’ Duties and Liability
------
PART ONE Basic Principles

Chapter 1 Ethics and Business
Introduction
1.1 The Nature of Business Ethics
ON THE EDGE: Was National Semiconductor Morally Responsible?
1.2 Ethical Issues in Business
ON THE EDGE: A Traditional Business
1.3 Moral Responsibility and Blame
ON THE EDGE: WorldCom’s Whistleblower
ON THE EDGE: Gun Manufacturers and Responsibility
CASES FOR DISCUSSION
Slavery in the Chocolate Industry
Aaron Beam and the HealthSouth Fraud

Chapter 2 Ethical Principles in Business
Introduction
2.1 Utilitarianism: Weighing Social Costs and Benefits
2.2 Rights and Duties
ON THE EDGE: Should Companies Dump Their Wastes In Poor Countries?
ON THE EDGE: Working for Eli Lilly & Company
ON THE EDGE: Conflict Diamonds
ON THE EDGE: ExxonMobil, Amerada Hess, and Marathon Oil in Equatorial Guinea
CASES FOR DISCUSSION
Traidos Bank and Roche’s Drug Trials in China

PART TWO The Market and Business

Chapter 3 The Business System: Government, Markets, and International Trade
Introduction
3.1 Free Markets and Rights: John Locke
3.2 Free Markets and Utility: Adam Smith
3.3 Free Trade and Utility: David Ricardo
3.4 Marx and Justice: Criticizing Markets and Free Trade
ON THE EDGE: Commodification or How Free Should Free Markets Be?
ON THE EDGE: Marx’s Children
3.5 Conclusion: The Mixed Economy, the New Property, and the End of Marxism
ON THE EDGE: Napster’s Lost Revolution
ON THE EDGE: Brian’s Franchise
CASES FOR DISCUSSION
The GM Bailout Accolade versus Sega

Chapter 4 Ethics in the Marketplace
Introduction
4.1 Perfect Competition
4.2 Monopoly Competition
ON THE EDGE: Drug Company Monopolies and Profits
4.3 Oligopolistic Competition
4.4 Oligopolies and Public Policy
ON THE EDGE: Fixing the Computer Memory Market
ON THE EDGE: Oracle and Peoplesoft
CASES FOR DISCUSSION
Intel’s “Rebates” and Other Ways It “Helped” Customers
Archer Daniels Midland and the Friendly Competitors

PART THREE Business and Its External Exchanges: Ecology and Consumers

Chapter 5 Ethics and the Environment
Introduction
5.1 The Dimensions of Pollution and Resource Depletion
5.2 The Ethics of Pollution Control
5.3 The Ethics of Conserving Depletable Resources
ON THE EDGE: Ford’s Toxic Wastes
ON THE EDGE: The Auto Companies in China
ON THE EDGE: Exporting Poison
CASES FOR DISCUSSION
The Ok Tedi Copper Mine
Gas or Grouse?

Chapter 6 The Ethics of Consumer Production and Marketing
Introduction
6.1 Markets and Consumer Protection
6.2 The Contract View of Business Firm’s Duties to Consumers
6.3 The Due Care Theory
ON THE EDGE: The Tobacco Companies and Product Safety
6.4 The Social Costs View of the Manufacturer’s Duties
ON THE EDGE: Selling Personalized Genetics
6.5 Advertising Ethics
ON THE EDGE: Advertising Death to Kids?
ON THE EDGE: New Balance and the “Made in USA” Label
6.6 Consumer Privacy
CASES FOR DISCUSSION
Becton Dickinson and Needle Sticks
Reducing Debts at Credit Solutions of America

PART FOUR Business and Its Internal Constituencies

Chapter 7 The Ethics of Job Discrimination
Introduction
7.1 Job Discrimination: Its Nature
ON THE EDGE: Helping Patients at Plainfield Healthcare Center
7.2 Discrimination: Its Extent
7.3 DISCRIMINATION: UTILITY, RIGHTS, AND JUSTICE
7.4 Affirmative Action
ON THE EDGE: Driving for Old Dominion
ON THE EDGE: Peter Oiler and Winn-Dixie Stores
CASES FOR DISCUSSION
Should Kroger pay now for what a Ralphs’ Employee did in the Past
Wal-Mart’s Women

Chapter 8 Ethics and the Employee
Introduction
8.1 The Rational Organization
8.2 The Political Organization
8.3 The Caring Organization
ON THE EDGE: HP’s Secrets and Oracle’s New Hire
ON THE EDGE: Insider Trading or: What Are Friends For?
ON THE EDGE: Delivering Pizza
ON THE EDGE: Sergeant Quon’s Text Messages
ON THE EDGE: Employment at Will at Howmet Corporation?
CASES FOR DISCUSSION
Death at Massey Energy Company
Who Should Pay?
------
key words
Ethics,
Ethical Decision Making,
Ethical Theories,
Whistle-Blowing,
Conflict of Interest,
Privacy,
Discrimination, Affirmative Action,
Employment Rights,
Health and Safety,
Ethics in Finance,
Corporate Social Responsibility,
Governance, Accountability, Compliance,
International Business Ethics,

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