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Contracts and UCC

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12. Stacy, located in Florida, is entering into a contract with Natasha, located in Russia, for the purchase of snow globes to sell to people who do not typically get to see snow. Stacy is familiar with the UCC but uneasy about what law would apply should she have a dispute with Natasha regarding the contract. She would like for Florida law to apply. Which of the following is the best advice to Stacy?
Stacy should attempt to have a contract clause inserted providing that the law of Florida would govern any dispute.
While a requirement that Florida law would govern the dispute would likely be deemed unconscionable, Stacy should attempt to have a contract clause inserted providing that international law would govern any dispute.
There is nothing that Stacy can do because Russian law, the law of the seller, would govern any dispute.
Stacy does not need to do anything because, as a matter of law, Florida law, the law of the buyer, would govern any dispute.
It depends on the value of the contract. If it is in an amount over $1,000, Stacy should attempt to obtain a provision in the clause that Florida law governs; otherwise, she has no option but to allow a court to later determine the conflicts issue.
14. Priscilla, who worked for a dry cleaner, came up with a great new idea for a type of press that speeded up the process immensely. She quit her job, hired labor and purchased materials, and manufactured a number of the presses. She sold the presses to her friend Phil for resale. Phil began advertising and distributing the press, but was notified by ABC Company that the sales violated its patent. After investigation, Phil determined that ABC had the better argument and demanded that Priscilla refund the purchase price. Priscilla declined on the basis that she had no idea that a patent on a similar press was in existence. Who will likely win the dispute and why?
Phil will likely win because Priscilla violated the implied warranty of merchantability.
Phil will likely win because Priscilla violated the implied warranty of fitness for a particular purpose.
Phil will likely win because Priscilla violated the warranty of title.
Priscilla will likely win because she had no knowledge of any previous patent.
Priscilla will likely win both because she had no knowledge of any previous patent and also because the duty was on Phil to investigate whether any patents existed prior to his purchase of the presses.
15. Mary sells handmade earrings for a living. Susan is a new lawyer and a friend of Mary who gives legal advice to Mary in return for earrings. Susan tells Mary that under the Magnuson-Moss Act she is required to provide all buyers with a written warranty setting forth their rights as consumers. Mary asks if there is not a way around that because she is tired of complaining customers who do not take care of their earrings and that she would love to find a way to provide no warranties whatsoever. Which of the following is true regarding Susa's advice and warranties on the earrings?
Susan is wrong, and Mary is free to disclaim warranties.
Susan is partially correct, and Mary must provide a limited written warranty under the Magnuson-Moss Act.
Susan is correct, and Mary must provide a full written warranty under the Magnuson-Moss Act
Susan is partially correct, and Mary must provide a limited written warranty under the Magnuson-Moss Act only if her average gross sales are over $5,000.
Susan is partially correct, and Mary must provide a full written warranty under the Magnuson-Moss Act only if her average gross sales are over $5,000.
16. Reference - New Furniture. Penny purchased $3,000 worth of furniture from Bob's furniture shop. Through an arrangement with Bob, 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 Bob on that day that she was rejecting the goods. Bob claimed that she did not properly reject the furniture and also that she acted in bad faith. Penny says that she properly rejected and denies that she acted in bad faith. She also says that, in any event, she cannot be charged with both wrongful rejection and also bad faith because of double jeopardy. Which of the following is true regarding the claim of Bob that Penny failed to properly reject the goods?
Bob is incorrect because under the UCC Penny had 30 days in which to reject the goods.
Bob is incorrect only if Penny can establish that Let Us Help You miscalculated the amount of interest she owed.
Bob is incorrect only if Penny can show that the goods were overpriced.
Bob is correct only if Bob can show that the goods were priced at reasonable market value.
Bob is correct.
17. Reference - New Furniture. Penny purchased $3,000 worth of furniture from Bob's furniture shop. Through an arrangement with Bob, 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 Bob on that day that she was rejecting the goods. Bob claimed that she did not properly reject the furniture and also that she acted in bad faith. Penny says that she properly rejected and denies that she acted in bad faith. She also says that, in any event, she cannot be charged with both wrongful rejection and also bad faith because of double jeopardy. Which of the following is true regarding the claim of Bob that Penny failed to act in good faith?
Bob is incorrect because under the UCC Penny had 30 days in which to reject the goods.
Bob is incorrect only if Penny can establish that Let Us Help You miscalculated the amount of interest she owed.
Bob is incorrect only if Penny can show that the goods were overpriced.
Bob is correct because Penny made no claim that the goods were nonconforming.
Bob is correct only if Bob can show that the goods were priced at reasonable market value.
18. Reference - New Furniture. Penny purchased $3,000 worth of furniture from Bob's furniture shop. Through an arrangement with Bob, 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 Bob on that day that she was rejecting the goods. Bob claimed that she did not properly reject the furniture and also that she acted in bad faith. Penny says that she properly rejected and denies that she acted in bad faith. She also says that, in any event, she cannot be charged with both wrongful rejection and also bad faith because of double jeopardy. Which of the following is true regarding the standard of good faith that would be applied in regard to Penny?
In this situation, good faith means honesty in fact.
In this situation, good faith means honesty in fact and also reasonable commercial standards of fair dealing.
In this situation, good faith means perfect tender.
In this situation, good faith means a lack of commercial impracticability.
In this situation, good faith means both perfect tender and a lack of commercial impracticability.
19 Reference - New Furniture. Penny purchased $3,000 worth of furniture from Bob's furniture shop. Through an arrangement with Bob, 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 Bob on that day that she was rejecting the goods. Bob claimed that she did not properly reject the furniture and also that she acted in bad faith. Penny says that she properly rejected and denies that she acted in bad faith. She also says that, in any event, she cannot be charged with both wrongful rejection and also bad faith because of double jeopardy. Which of the following is the correct analysis of Penny's claim that she cannot be charged with both a wrongful rejection and bad faith because of the double jeopardy bar?
Penny is correct.
Penny is correct that she cannot be charged with both a wrongful rejection and bad faith; but the UCC requires that conclusion, not the double jeopardy bar.
Penny is correct that she cannot be charged with both a wrongful rejection and bad faith; but the common law requires that conclusion, not the double jeopardy bar.
Penny is correct that she cannot be charged with both a wrongful rejection and bad faith; but federal statutory law requires that conclusion, not the double jeopardy bar.
Penny is incorrect. She can be charged with both a wrongful rejection and also bad faith.
20. Reference - Boat Tow. Donnie went to a new car dealership and told the salesperson, who was not the manager, that he needed a new car that would get good gas mileage and would also pull his big boat. The salesperson encouraged him to buy a smaller car that the salesperson promised would pull the boat. Donnie bought the car and used it to pull the boat. Unfortunately, the heavy pull on the car did significant damage to the car's engine. Donnie complained to the salesperson who denied any liability. Donnie, who had half a semester of business law, informed the salesperson that along with the sale of the car he also received an express warranty and an implied warranty of merchantability, and that he could recover under either of those theories. Is Donnie correct that the car was sold with an implied warranty of merchantability?
No, because there was no writing guaranteeing that warranty signed by the salesperson.
No, because the salesperson was only engaged in exaggeration.
No, because only the manager can make such a warranty.
No, both because nothing was in writing and also because only the manager can make such a warranty.
Yes.
21. Reference - Boat Tow. Donnie went to a new car dealership and told the salesperson, who was not the manager, that he needed a new car that would get good gas mileage and would also pull his big boat. The salesperson encouraged him to buy a smaller car that the salesperson promised would pull the boat. Donnie bought the car and used it to pull the boat. Unfortunately, the heavy pull on the car did significant damage to the car's engine. Donnie complained to the salesperson who denied any liability. Donnie, who had half a semester of business law, informed the salesperson that along with the sale of the car he also received an express warranty and an implied warranty of merchantability, and that he could recover under either of those theories. Will Donnie likely be able to recover damages based upon a breach of the implied warranty of merchantability?
No, because the implied warranty of merchantability was that the car would, for example, be fit for the ordinary purposes for which such goods are used. Pulling the boat was not an ordinary purpose for that small car.
Yes, because Donnie informed the salesperson about the need for the car to pull the boat.
Yes, because the salesperson told Donnie that the car would pull the boat.
No, because of the lack of an implied warranty of fitness for a particular purpose.
No, because there was no warranty of merchantability.
22 Reference - Boat Tow. Donnie went to a new car dealership and told the salesperson, who was not the manager, that he needed a new car that would get good gas mileage and would also pull his big boat. The salesperson encouraged him to buy a smaller car that the salesperson promised would pull the boat. Donnie bought the car and used it to pull the boat. Unfortunately, the heavy pull on the car did significant damage to the car's engine. Donnie complained to the salesperson who denied any liability. Donnie, who had half a semester of business law, informed the salesperson that along with the sale of the car he also received an express warranty and an implied warranty of merchantability, and that he could recover under either of those theories. Will Donnie be able to recover damages based upon breach of the implied warranty of fitness for a particular purpose?
Yes.
No, because there was no express warranty.
No, because Donnie's only right of recovery was for breach of the implied warranty of merchantability.
No, because Donnie's only right of recovery was for breach of an express warranty.
No, because Donnie as a reasonable person should have known that the car would not pull the boat regardless of what the salesperson said.
23. Reference - Hot Toaster. Rebecca bought a toaster from Super Store and brought it home. A friend of hers, Greg, was at her house making toast. The toaster malfunctioned and shocked Greg resulting in a small burn to his hand requiring medical attention. At a garage sale, Rebecca also purchased a blender from a friend, Samantha. When she paid for the blender, Rebecca said that it would be great for making smoothies. Samantha said nothing and just smiled while taking Rebecca's money. Unfortunately, the blender was not powerful enough to make smoothies. Based on the facts presented, what type of warranty did Super Store give Rebecca?
An express warranty.
An implied warranty of merchantability.
An implied warranty of fitness for a particular purpose.
An express warranty, an implied warranty of merchantability, and an implied warranty of fitness for a particular purpose.
An implied warranty of merchantability and an implied warranty of fitness for a particular purpose, but not an express warranty.
24. Reference - Hot Toaster. Rebecca bought a toaster from Super Store and brought it home. A friend of hers, Greg, was at her house making toast. The toaster malfunctioned and shocked Greg resulting in a small burn to his hand requiring medical attention. At a garage sale, Rebecca also purchased a blender from a friend, Samantha. When she paid for the blender, Rebecca said that it would be great for making smoothies. Samantha said nothing and just smiled while taking Rebecca's money. Unfortunately, the blender was not powerful enough to make smoothies. Which of the following rights, if any, does Greg have against Super Store in most states?
None because he did not buy the toaster.
None because he is not married to Rebecca.
None because he was not married to Rebecca nor was he a relative of Rebecca.
He may sue but only if Rebecca joins in the suit with him.
He may sue Super Store for his injuries.
25. Reference - Hot Toaster. Rebecca bought a toaster from Super Store and brought it home. A friend of hers, Greg, was at her house making toast. The toaster malfunctioned and shocked Greg resulting in a small burn to his hand requiring medical attention. At a garage sale, Rebecca also purchased a blender from a friend, Samantha. When she paid for the blender, Rebecca said that it would be great for making smoothies. Samantha said nothing and just smiled while taking Rebecca's money. Unfortunately, the blender was not powerful enough to make smoothies. Which of the following is true regarding whether Samantha made an express warranty to Rebecca that the blender would make smoothies?
Samantha made an express warranty by not speaking up regarding problems with blender.
Samantha made an express warranty by not speaking up regarding problems with the blender only if Rebecca can prove that Samantha knew about the problems.
Samantha made an express warranty by not speaking up regarding problems with the blender only if Rebecca cannot prove that Samantha knew about the problems.
Samantha made an express warranty by not speaking up regarding problems with the blender only if Samantha can prove that she did not know about the problems.
Samantha did not make an express warranty.
26. Reference - Hot Toaster. Rebecca bought a toaster from Super Store and brought it home. A friend of hers, Greg, was at her house making toast. The toaster malfunctioned and shocked Greg resulting in a small burn to his hand requiring medical attention. At a garage sale, Rebecca also purchased a blender from a friend, Samantha. When she paid for the blender, Rebecca said that it would be great for making smoothies. Samantha said nothing and just smiled while taking Rebecca's money. Unfortunately, the blender was not powerful enough to make smoothies. Which of the following is true regarding whether Samantha made an implied warranty of fitness for a particular purpose to Rebecca that the blender would make smoothies?
Samantha did not make an implied warranty of fitness for a particular purpose because there is no proof that Rebecca was relying on Samantha to make the selection.
Samantha did not make an implied warranty of fitness for a particular purpose because Samantha is not a merchant.
Samantha did not make an implied warranty of fitness for a particular purpose because there is no proof that Rebecca was relying on Samantha to make the selection and also because Samantha is not a merchant.
Samantha made an implied warranty of fitness for a particular purpose to Rebecca that the blender would make smoothies because she had a duty to tell Samantha otherwise.
Regardless of whether she said anything or not, Samantha made an implied warranty of fitness for a particular purpose to Rebecca that the blender would make smoothies because she sold the blender.
27. Reference - Refused Furniture. Selina arranges to sell furniture from her furniture store to Roland for $3,000. Roland was supposed to give Selina a $500 deposit on February 1 and pay the remainder in monthly installments. Selina was to deliver the furniture by February 7. Roland did not pay Selina as promised on February 1. He asked her to wait until March 1, but she refused. She also refused to deliver the furniture. Selina was able to sell the furniture for only $2,500 because of a downturn in the economy. Roland told Selina that she had no right to withhold or sell his furniture and that he was suing. Selina incurred $100 in additional amounts in advertising costs to advertise the furniture that Roland initially purchased. Selina saved $40 in delivery costs because the subsequent purchaser picked up her own furniture. Which of the following is true regarding Roland's claim that Selina had no right to withhold his furniture?
Roland is correct. Selina was required to deliver the furniture, but she retained the right to sue him for any deficiency.
Roland is correct but only because of the special UCC exception for consumer goods.
Roland is incorrect. Selina had a right to withhold the furniture.
Roland is incorrect but only if Selina can prove that she had no reason to believe that he was a credit risk prior to signing the contract of sale.
Roland is correct because of federal consumer protection laws.
28. Reference - Refused Furniture. Selina arranges to sell furniture from her furniture store to Roland for $3,000. Roland was supposed to give Selina a $500 deposit on February 1 and pay the remainder in monthly installments. Selina was to deliver the furniture by February 7. Roland did not pay Selina as promised on February 1. He asked her to wait until March 1, but she refused. She also refused to deliver the furniture. Selina was able to sell the furniture for only $2,500 because of a downturn in the economy. Roland told Selina that she had no right to withhold or sell his furniture and that he was suing. Selina incurred $100 in additional amounts in advertising costs to advertise the furniture that Roland initially purchased. Selina saved $40 in delivery costs because the subsequent purchaser picked up her own furniture. Which of the following is true regarding Roland's claim that Selina had no right to sell the furniture he initially purchased?
Roland is correct. Selina had no right to sell the furniture, but she retained the right to sue him for any deficiency.
Roland is correct but only because of the special UCC exception for consumer goods.
Roland is incorrect. Selina had a right to resell the furniture.
Roland is incorrect but only if Selina can prove that she had no reason to believe that he was a credit risk prior to signing the contract of sale.
Roland is correct because of federal consumer protection laws.
29. Reference - Refused Furniture. Selina arranges to sell furniture from her furniture store to Roland for $3,000. Roland was supposed to give Selina a $500 deposit on February 1 and pay the remainder in monthly installments. Selina was to deliver the furniture by February 7. Roland did not pay Selina as promised on February 1. He asked her to wait until March 1, but she refused. She also refused to deliver the furniture. Selina was able to sell the furniture for only $2,500 because of a downturn in the economy. Roland told Selina that she had no right to withhold or sell his furniture and that he was suing. Selina incurred $100 in additional amounts in advertising costs to advertise the furniture that Roland initially purchased. Selina saved $40 in delivery costs because the subsequent purchaser picked up her own furniture. Which of the following is true regarding any right of Selina to recover the additional advertising fees she incurred from Roland?
She is entitled to recover the damages if she can show that Roland agreed to pay such damages in his contract with her.
She is entitled to recover the damages if she can show that Roland orally agreed to pay such damages.
She is entitled to recover the damages if she can show that Roland has a history of breaching contracts of sale.
Selina will be able to recover the damages so long as they were reasonably incurred because of Roland's breach.
She is not entitled to recover the fees because she had no right to resell the furniture.

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Solution Preview

12. While a requirement that Florida law would govern the dispute would likely be deemed unconscionable, Stacy should attempt to have a contract clause

14. Phil will likely win because Priscilla violated the warranty of title.

15. Susan is wrong, and Mary is free to disclaim warranties.

16. Bob is ...

Solution Summary

This solution of 215 words answers the questions on contracts and UCC in the given scenarios.

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