Contracts and Sales Flashcards
7 cards from real OK BAR practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Contracts and Sales flashcards as text
Two merchants exchange forms: the buyer's purchase order is silent on arbitration, and the seller's acknowledgment adds an arbitration clause that materially alters the deal. Under UCC 2-207, the arbitration clause:
Answer: Does not become part of the contract because it materially alters it
Between merchants, additional terms become part of the contract unless they materially alter it, and arbitration clauses are typically material alterations.
A seller delivers goods 'F.O.B. seller's warehouse.' The goods are destroyed in transit by the carrier. Who bears the risk of loss?
Answer: The buyer, because risk passed when the goods were delivered to the carrier
In a shipment contract designated F.O.B. seller's location, risk of loss passes to the buyer when the seller duly delivers the goods to the carrier.
A consumer buys a used car 'as is' from a dealer. The engine fails a week later. Which warranty claim survives the 'as is' disclaimer?
Answer: An express warranty the salesperson made about engine condition before sale
'As is' language disclaims implied warranties but cannot negate express warranties that formed part of the basis of the bargain.
A buyer under an installment contract receives one shipment with minor defects that can be cured. Under the UCC, the buyer may reject that installment only if:
Answer: The nonconformity substantially impairs the value of that installment and cannot be cured
Installment contracts are exempt from perfect tender; rejection requires substantial impairment of the installment's value that cannot be cured.
A blacksmith orders steel 'for making horseshoes' and the seller, knowing this purpose, selects the steel. The steel proves unsuitable for horseshoes though otherwise merchantable. The buyer's best claim is breach of:
Answer: The implied warranty of fitness for a particular purpose
When a seller knows the buyer's particular purpose and the buyer relies on the seller's skill to select goods, the implied warranty of fitness for a particular purpose applies.
A seller tenders defective goods with time remaining before the contractual delivery deadline, and the buyer rejects. Under the UCC, the seller may:
Answer: Cure the defect by tendering conforming goods before the deadline after seasonable notice
UCC 2-508 gives a seller the right to cure a nonconforming tender by delivering conforming goods within the original contract time after seasonable notice.
A thief steals a watch and sells it to a good-faith purchaser for value. The original owner sues the purchaser for the watch. The owner will:
Answer: Win, because a thief has void title and can pass none, even to a good-faith purchaser
A thief acquires void title, so even a good-faith purchaser for value receives no title against the true owner.