East Mississippi Community College

ECON 2123

Chapter 23-NATURE AND FORM OF SALES

TRUE/FALSE

1)A sale of goods is defined under UCC Article 2 as transfer of title to intangible property for a price.

2. UCC Article 2 applies not only to contracts for the sale of familiar items of personal property, such as automobiles or chairs, but also to the transfer of commodities, such as oil, gasoline, milk, and grain.

3. Goods physically existing and owned by a seller at the time of a transaction are called existing goods.

4. A bailment is a special form of sale in which possession is transferred to a bailee.

5. A gift is a free transfer of the title to property.

6. A contract that has elements of both goods and services is always classified as a contract for the sale of goods.

7. If a contract calls for both rendering services and supplying materials to be used in performing the services, the contract is classified according to its dominant element.

8. A firm offer is effective only if the merchant receives consideration to keep the offer open.

9. Sales law includes special rules that apply to merchants.

10. An offer to buy or sell goods may be accepted in any manner that is reasonable under the circumstances.

11. When a term of an acceptance conflicts with a term of an offer but it is clear that the parties intended to be bound by a contract, the UCC still recognizes the formation of a contract, and the conflicting

terms cancel each other and are ignored.

12. The UCC permits a court to refuse to enforce a sales contract that it finds to be unconscionable.

13. A contract for the sale of goods is not enforceable unless the contract clearly expresses the price.

14. An output or requirement contract is not enforceable unless the parties include an estimate of prospective amounts.

15. A contract of indefinite duration may be terminated by notice from either party to the other party.

16. Any modification of a sales contract must be supported by some form of consideration.

17. The parol evidence rule does not apply to the sale of goods.

18. The term “course of dealing” refers to the language and customs of an industry.

19. Defenses raised in a suit based on a sales contract differ greatly from defenses used in regard to any other type of contract.

20. A merchant is about to transfer his entire inventory as part of an annual clearance action. This transfer is called a bulk transfer.

21. The provisions of Article 6 concerning bulk transfers are designed to protect creditors.

22. To satisfy the statute of frauds, the writing must be signed and must include the price of the goods.