QUESTION 1

1.A holder in due course "steps into the shoes" of the assignor and acquires only the rights that the assignor had.

True

False

QUESTION 2

1.A spouse who is named as the beneficiary in a life insurance contract is a __________beneficiary.

Donee

Donor

Creditor

Incidental

QUESTION 3

1.Allie entered into a contract with Camp Woe B Gone, paying 2,000 for a six week camping experience for her son, Bart. Bart is the ________________ of the contract between Allie and Camp Woe B Gone.

Donee beneficiary

Incidental beneficiary

Delegatee

Assignee

QUESTION 4

1.An assignee "steps into the shoes" of the assignor and acquires only the rights that the assignor had.

True

False

QUESTION 5

1.A "time is of the essence" clause is an example of a constructive condition in a contract.

True

False

QUESTION 6

1.A building contractor who does not fully meet each and every obligation in the building contract will receive no compensation for his work.

True

False

QUESTION 7

1.A condition precedent in Max's contract to buy Al's sailboat is that Max find financing below 8. Since Max has not been able to it, but still wants to buy the boat, he has voluntarily relinquished the right to this condition. This is an example of a(n) _________.

Accord and satisfaction

Waiver

Novation

Tender

QUESTION 8

1.A contract clause that states that a buyer will purchase a new home only if she can get financing under 6.5 is an example of a contract with a condition subsequent.

True

False

QUESTION 9

1."Good faith" in the code means honesty in fact in the transaction.

True

False

QUESTION 10

1.A buyer does not have the right to inspect goods before paying for them if:

The goods are sent C.O.D.

The goods are sent under a destination contract.

The goods are sent under a shipment contract.

None of the above is true: Buyers always have the right to inspect goods before paying for them.

QUESTION 11

1.A buyer has the right to inspect good before paying for them unless:

A shipment contract is involved.

A destination contract is involved.

The shipment is C.O.D.

The buyer is paying by cashier's check.

QUESTION 12

1.A buyer who discovers that goods bought C.O.D. are defective has no recourse against the seller for the defective goods.

True

False

QUESTION 13

1.A buyer can revoke an earlier acceptance only if the non-conformity substantially impairs the value of the goods to the buyer.

True

False

QUESTION 14

1.A buyer cannot accept a tender by inaction; notice of acceptance must always be given the seller.

True

False

QUESTION 15

1.A buyer does not have the right to inspect goods before paying for them if

The seller gave adequate assurances

The goods are fungible

The delivery is C.O.D.

The delivery is one of several deliveries under the same contract.

QUESTION 16

1.A buyer has a security interest in non-conforming goods in his possession and may sell them to cover the costs of storage.

True

False

QUESTION 17

1.A seller's liability for breach of an implied warranty of merchantability is limited to personal injuries.

True

False

QUESTION 18

1.A warranty of title would not be implied for goods sold at a sheriff's sale.

True

False

QUESTION 19

1.A warranty that is imposed on the sales transaction as a matter of law and public policy is a (n) _________warranty.

Conditional

Implied

Absolute

Express

QUESTION 20

1.Allen's Auto Mart, a large car dealership, is upgrading its inventory tracking and billing system. It sold its computers, printers and fax machines to Rods'n'Reels, a local retailer of sporting goods. One of the computers and two of the faxes have stopped working. Does Rods'n'Reels have a claim against Allen's for breach of an implied warranty of merchantability?

No, used goods are never covered by the implied warranty of merchantability.

No, because Rods'n'Reels is itself a merchant it is not protected by the implied warranty of merchantability.

No, Allen's is only a merchant of cars and no warranty of merchantability will be implied for other goods it may sell.

Yes, the warranty of merchantability is implied in every sale by every seller unless it is specifically disclaimed.