Question 1

1. Wallace wanted baseball caps with the name of the firm of which he was president, ABC Corporation, emblazoned on the front. Fran, a merchant in specialized goods, orally agreed with Wallace that she would sell to him 200 baseball caps at $5 each. No writing was ever made although there were a number of witnesses to the conversation. After the caps were finished, but before they were shipped, Wallace called to cancel the order because his firm had just announced a merger and would no longer be known as ABC Corporation. Fran told him to forget cancelling the contract because she had just finished the caps. Wallace told Fran that she should have been smarter and had him sign something because without a writing, she does not have a chance in court. Fran was also having a problem with another customer, a father who wanted t-shirts with his family name put on them for a family reunion. Fran had sent a confirming letter to the dad. Twenty days later the dad called and told her that there was a big feud, the reunion was cancelled, and that he was cancelling the order. She believes that the father should pay damages and that it is just that he do so because a big family was involved and the sale was substantial. Finally, Fran plans on taking to small claims court a merchant customer who orally ordered 500 plain t-shirts at a cost of $5 each but has not picked them up. Which of the following is true regarding Fran's assertion that she should be allowed to recover from the father?
• Based upon the facts given, Fran cannot recover because the father, who was not a merchant in regards to the transaction and had not signed anything showing that he was to be charged for the shirts.
• Fran can recover because she sent the father a confirming letter.
• Fran can recover because specialized goods are involved.
• Fran can recover only because specialized goods are involved and she had also sent the father a confirming letter.

Question 2

1. Wallace wanted baseball caps with the name of the firm of which he was president, ABC Corporation, emblazoned on the front. Fran, a merchant in specialized goods, orally agreed with Wallace that she would sell to him 200 baseball caps at $5 each. No writing was ever made although there were a number of witnesses to the conversation. After the caps were finished, but before they were shipped, Wallace called to cancel the order because his firm had just announced a merger and would no longer be known as ABC Corporation. Fran told him to forget cancelling the contract because she had just finished the caps. Wallace told Fran that she should have been smarter and had him sign something because without a writing, she does not have a chance in court. Fran was also having a problem with another customer, a father who wanted t-shirts with his family name put on them for a family reunion. Fran had sent a confirming letter to the dad. Twenty days later the dad called and told her that there was a big feud, the reunion was cancelled, and that he was cancelling the order. She believes that the father should pay damages and that it is just that he do so because a big family was involved and the sale was substantial. Finally, Fran plans on taking to small claims court a merchant customer who orally ordered 500 plain t-shirts at a cost of $5 each but has not picked them up. Which of the following is correct regarding Wallace's assertion that Fran cannot recover the cost of the caps?
• Wallace is correct. Fran cannot recover because the contract is covered by the Statute of Frauds and she has nothing in writing.
• Wallace is incorrect because the cost of the caps is insufficient to come within the Statute of Frauds.
• Wallace is incorrect because Fran has witnesses.
• Wallace is incorrect. Although this contract would generally have to be in writing to be enforceable, a judge would still enforce the contract because the caps were specially manufactured goods.

Question 3

1. Susie, who has a ladies' dress shop, reached an oral agreement with Kim, a wholesaler, to purchase 100 dresses for $80 each, with the dresses to be delivered within 30 days. Kim later agreed to a modification whereby she would add ten belts to go along with certain dresses at no extra charge. Susie sent Kim a memo confirming their oral agreement but heard nothing. When the dresses did not arrive within 30 days, Susie checked with Kim. Kim told her that their agreement was no good because Kim never signed anything and that the UCC does not apply in the retail arena. Which of the following is true regarding the modification to the agreement involving the belts added to the order at no extra charge?
• The modification is not enforceable because the initial contract involving the sale of the dresses is not enforceable.
• The modification is not enforceable because no additional consideration was given.
• The modification is not enforceable because clothing, which constitutes an exception to the general rules involving the sale of goods, is involved.
• The modification is enforceable because the UCC requires only that modifications be made in good faith.

Question 4

1. Susie, who has a ladies' dress shop, reached an oral agreement with Kim, a wholesaler, to purchase 100 dresses for $80 each, with the dresses to be delivered within 30 days. Kim later agreed to a modification whereby she would add ten belts to go along with certain dresses at no extra charge. Susie sent Kim a memo confirming their oral agreement but heard nothing. When the dresses did not arrive within 30 days, Susie checked with Kim. Kim told her that their agreement was no good because Kim never signed anything and that the UCC does not apply in the retail arena. Which of the following is true regarding whether the agreement between Susie and Kim for the sale of dresses satisfied the writing requirement of the UCC?
• The agreement is likely binding because under the UCC, if two merchants have an oral agreement, a written memo from either party to the other is deemed to satisfy the statute of frauds, even if it is not acknowledged by the receiving party. If it is not objected to within 10 days of receipt, the oral agreement, memorialized by the memo, is binding.
• The agreement is likely binding because under the UCC, if two merchants have an oral agreement, there is no requirement of a writing so long as another witness is willing to confirm that within 10 days of the agreement, one of the parties memorialized the agreement by a memorandum to the file, even if it was not sent to the other party.
• The agreement is binding because the UCC has no requirement of a writing under any circumstances.
• The agreement is not binding because Kim never signed anything by which she agreed to the terms of the oral agreement.

Question 5

1. Susie, who has a ladies' dress shop, reached an oral agreement with Kim, a wholesaler, to purchase 100 dresses for $80 each, with the dresses to be delivered within 30 days. Kim later agreed to a modification whereby she would add ten belts to go along with certain dresses at no extra charge. Susie sent Kim a memo confirming their oral agreement but heard nothing. When the dresses did not arrive within 30 days, Susie checked with Kim. Kim told her that their agreement was no good because Kim never signed anything and that the UCC does not apply in the retail arena. Which of the following is true regarding Kim's statement that the UCC does not apply in the retail arena?
• Kim is correct in that the UCC does not apply in the retail arena.
• Kim is partially correct. The UCC does not apply in the retail arena if the parties have had significant past dealings under common law.
• Kim is incorrect.
• Kim is partially correct. The UCC does not apply in the retail arena if the parties have had significant past dealings under common law or if the parties are located in the same state.

Question 6

1. Robby entrusted his automobile to ABC Motors for repair. The manager of ABC Motors, who did a very poor job with inventory, accidentally sold the car to Connie. Connie, who paid cash for the car, had no idea that the car did not belong to ABC Motors and paid fair market value for it. When Robby went to pick up the car, he was very upset that it was gone. The manager of ABC Motors told him that he was very sorry, but that his only recourse would be against Connie. Which of the following is true regarding the manager's statement that Robby's only recourse is against Connie?
• The manager is correct.
• The manager is incorrect only if Robby has a writing signed by a representative of the repair shop guaranteeing the safety of the car.
• The manager is correct only if Connie can be found.
• The manager is incorrect, and Robby can sue ABC Motors.

Question 7

1. ABC Motors sold a used car to Frank who wrote a bad check for the car and left town, but not before selling the car to Betty. Betty purchased the car with no knowledge of any problem with the check. ABC Motors asked Betty to return the car, but she refused. She explained that she had given the car to her son, Billy. What kind of title did Billy have?
• Good
• Void
• Voidable
• Illegal

Question 8

1. Penny purchased $3,000 worth of furniture from Good Wood Furniture. Through an arrangement with Good Wood, Penny financed the purchase through a financing company called Let Us Help You. Twenty-nine days after the goods were delivered to her, Penny had a disagreement with Let Us Help You regarding the amount of interest she would be required to pay. She notified Good Wood on that day that she was rejecting the goods. Good Wood claimed that she did not properly reject the furniture and also that she acted in bad faith. Penny says that she properly rejected; that she did not act in bad faith; and that, in any event, she cannot be charged with both because of double jeopardy. Which of the following is true regarding the claim of Good Wood that Penny failed to properly reject the goods?
• Good Wood is incorrect because under the UCC Penny had 30 days in which to reject the goods.
• Good Wood is incorrect only if Penny can establish that Let Us Help You miscalculated the amount of interest she owed.
• Good Wood is incorrect only if Penny can show that the goods were overpriced.
• Good Wood is correct.

Question 9

1. Business law teacher Penny ordered 50 t-shirts for her classes that said "Business Law Rocks" on the front. She wanted to give them out on the last day of class. The shirts arrived on Thursday, just before the last day of classes on Friday. Unfortunately, the shirts said "Business Law Yuck" on the front. Frank who owned the t-shirt business from whom Penny ordered the shirts told her that he would remedy and fix the problem and that he had the right to do so. She told him, however, that she had to have the shirts the next day. Penny had also ordered some pamphlets on employment law to be used the next fall semester. The seller had agreed to provide the pamphlets 30 days before spring semester ended. The seller, however, erred and sent pamphlets on environmental law which arrived 28 days before spring semester ended. The seller attempted to remedy the problem by sending the correct pamphlets on employment law, but they did not arrive until 27 days before spring semester ended. None of the parties had any prior dealings. Which of the following is true regarding the efforts of the seller of the employment law pamphlets to remedy the problem with the incorrect pamphlets?
• The seller could likely exercise the right to cure once the contract time for performance had ended because the seller would have had reasonable grounds to believe that Penny would not have objected to the tender of the correct item at the time it was tendered.
• The seller could not exercise the right to cure once the contract time for performance had ended because the seller did not have reasonable grounds to believe that the nonconforming tender of environmental pamphlets would be acceptable to Penny.
• The seller correctly acted to remedy the problem because he had up to 10 days under the UCC to fix any problem.
• The seller correctly acted to remedy the problem because he had up to 20 days under the UCC to fix any problem.

Question 10

1. Beau went shopping at ABC Carpet. He saw some carpet he liked but could not make up his mind. The manager at ABC Carpet wrote down the proposed purchase price for him along with a statement that the price would be good for three months. Two months later Beau went back to ABC Carpet to purchase the carpet. Unfortunately, the price had gone up. Beau showed the manager his writing and guaranteed price, but the manager said that the offer was no longer good. Although he had to pay more than the ABC manager had initially promised, Beau proceeded to purchase his carpet from XYZ carpet, and he also contracted with XYZ to do the installation. Unfortunately, Beau almost immediately started to have problems with the carpet. Beau told the sales manager for XYZ Carpet that he was planning on bring suit for breach of warranty. The sales manager, however, told him that the breach of warranty provisions only applied to sales of goods and that the carpet purchase was for installation, a service. Which of the following is true in most states regarding whether the UCC applies to the contract Beau had with XYZ Carpet?
• Common law will be applied, not the UCC, because the contract was mixed.
• The UCC will be applied, not common law because the contract was mixed.
• The court will apply the predominant-purpose test to determine whether the predominant purpose of the contract was the sale of goods in which case the UCC would apply.
• The court will apply the service-warranty test to determine whether the predominant purpose of the contract was the provision of a service in which case the UCC would apply

Question 1 1. Wallace wanted baseball caps with the name of the...