Multiple-Choice Questions
1. Which one of the following transactions is not governed by Article 2 of the UCC?
(a) Purchasing an automobile for $35,000
(b) Leasing an automobile worth $35,000
(c) Purchasing a stereo worth $501
(d) Purchasing a stereo worth $499
2. Marion orally agrees to sell Ashley her condominium in Philadelphia for $700,000. The parties have known each other for 20 years and do not bother to put anything in writing. Based on the agreement, Marion hires a moving company to pack up all her goods and move them to a storage warehouse. Ashley shows up with a cashier's check, and Marion says, "You're going to love it here." But at the last minute, Marion declines to take the check and refuses to sell. Ashley sues and wins
(a) Nothing
(b) The condominium
(c) $700,000
(d) The difference between $700,000 and the condominium's market value
(e) Damages for fraud
3. Seller's sales contract states that "The model 8J flagpole will withstand winds up to 150 mph, for a minimum of 35 years." The same contract includes this: "This contract makes no warranties, and any implied warranties are hereby disclaimed." School buys the flagpole, which blows down six months later, in a 105-mph wind.
(a) Seller is not liable because it never made any express warranties.
(b) Seller is not liable because it disclaimed any warranties.
(c) Seller is liable because the disclaimer was invalid.
(d) Seller is liable because implied warranties may not be disclaimed.
4. Manufacturer sells a brand-new, solar-powered refrigerator. Because the technology is new, Manufacturer sells the product "as is." Plaintiff later sues Manufacturer for breach of warranty and wins. Plaintiff is probably
(a) A distributor with no understanding of legal terminology
(b) A retailer who had previously relied on Manufacturer
(c) A retailer who had never done business before with Manufacturer
(d) A retailer who failed to notice the "as is" label
(e) A consumer
5. CPA QUESTION which of the following conditions must be met for an implied warranty of fitness for a particular purpose to arise?
I. The warranty must be in writing.
II. The seller must know that the buyer was relying on the seller in selecting the goods.
(a) I only
(b) II only
(c) Both I and II
(d) Neither I nor II