Review Sales and Business Structure Problems 1. Carrabel Breads, Inc. offered to sell Shop and Cart Market's 20,000 pounds of Plantation Bread at $1.00 per pound, subject to certain specified terms for delivery. Shop and Cart replied in writing as follows: "We accept your offer for 20,000 pounds of Plantation bread at $1.00 per pound, terms 2/10 net 30." In accordance with the sales article of the UCC, (A) A contract will be formed only if Carrabel Bread agrees to the 2% off (B) a contract was formed between the parties (C) no contract was formed because Shop and Cart included the 2/10 net 30 in its reply (D) no contract was formed, because Shop and Cart's reply was a counteroffer See UCC 2-207; 2/10 net 30 means that there is a 2% discount if payment is made in 10 days; otherwise the full price is due in 30 days. 2. Which of the following would require additional consideration to both parties in the event that the original contract is modified? Contract for personal services Contract for the sale of goods II. (A) I only (B) Il only (C) both I and II (D) neither I nor 11 See UCC 2-209 3. Under the sales article of the Uniform Commercial Code (UCC), unless otherwise agreed to, the seller's obligation to the buyer is to (A) deliver all the goods called for in the contract to a common carrier (B) set aside conforming goods for inspection by the buyer before delivery (C) hold conforming goods and give the buyer whatever notification is reasonably necessary to enable the buyer to take delivery (D) deliver the goods to the buyer's place of business See UCC 2-503 4. Your client buys a guitar from a seller. Rather than take the instrument home, your client leaves the instrument at the place he bought it for a few days. Thieves break in and steal the guitar. Your client would NOT bear the risk of loss if the guitar was sold by and ultimately stolen from a I. II. Merchant seller Non-merchant seller (A) I only (B) Il only (C) both I and II (D) neither I nor II 5. Which of the following correctly describes a seller's right to cure? UCC 2-508 As long as the time for performance has not passed, the seller has the right to correct defects in shipments made. The seller must give timely notice of intent to cure before the buyer secures goods elsewhere. (A) I only (B) Il only (C) both I and II (D) neither I nor II 6. For what purpose will a stockholder of a publicly held corporation be permitted to file a shareholder's derivative lawsuit in the name of the corporation? II. To compel payment of a properly declared dividend To recover damages from corporate management for an ultra vires management act (A) I only (B) Il only (C) both I and II (D) neither I nor II 7. When a new partner is admitted to an existing partnership to replace an outgoing partner, the liability of the newly admitted partner for existing partnership debts is: (A) normally limited to the amount of his or her capital contribution to the partnership (B) normally unlimited, and the newly admitted partner's personal property may be seized to satisfy the existing debts (C) joint and several, as well as personal (D) limited to whatever liability the outgoing partner had 8. In a corporation, which of the following rights does a shareholder typically have? Right to vote on fundamental changes in corporate structure such as a merger. Right to reasonable inspection of corporation records. II. (A) I only (B) Il only (C) both I and II (D) neither I nor II 9. Corporations generally have which of the following powers without shareholder approval: I. II. III. Power to acquire their own shares Power to make charitable contributions Power to make loans to directors (A) I only (B) I and II only (C) II and Ill only (D) 1, II, and III 10. Eco Environmental Services, Inc. is a C corporation. Which of the following is a characteristic of a C corporation? (A) It is the business structure of choice for most privately held businesses (B) is allowed to deduct dividends paid prior to paying taxes (C) subject to double taxation on profits if dividends are paid (D) must have only one class of stock Short Answer Question: Michelle owned a building which she orally contracted to sell to Colleen, who was to remove it from its concrete foundation, put it on skids, and drag it away. Before removal, Michelle repudiated the deal. Michelle defends her action by asserting the statute of frauds. (The statute of frauds provisions specify which contracts must be in writing in order to be enforceable). Was this a contract for land or for a good? Does the statute of frauds section of Article 2 apply to this contract? See UCC 2-105 and 2-107(1). Review Sales and Business Structure Problems 1. Carrabel Breads, Inc. offered to sell Shop and Cart Market's 20,000 pounds of Plantation Bread at $1.00 per pound, subject to certain specified terms for delivery. Shop and Cart replied in writing as follows: "We accept your offer for 20,000 pounds of Plantation bread at $1.00 per pound, terms 2/10 net 30." In accordance with the sales article of the UCC, (A) A contract will be formed only if Carrabel Bread agrees to the 2% off (B) a contract was formed between the parties (C) no contract was formed because Shop and Cart included the 2/10 net 30 in its reply (D) no contract was formed, because Shop and Cart's reply was a counteroffer See UCC 2-207; 2/10 net 30 means that there is a 2% discount if payment is made in 10 days; otherwise the full price is due in 30 days. 2. Which of the following would require additional consideration to both parties in the event that the original contract is modified? Contract for personal services Contract for the sale of goods II. (A) I only (B) Il only (C) both I and II (D) neither I nor 11 See UCC 2-209 3. Under the sales article of the Uniform Commercial Code (UCC), unless otherwise agreed to, the seller's obligation to the buyer is to (A) deliver all the goods called for in the contract to a common carrier (B) set aside conforming goods for inspection by the buyer before delivery (C) hold conforming goods and give the buyer whatever notification is reasonably necessary to enable the buyer to take delivery (D) deliver the goods to the buyer's place of business See UCC 2-503 4. Your client buys a guitar from a seller. Rather than take the instrument home, your client leaves the instrument at the place he bought it for a few days. Thieves break in and steal the guitar. Your client would NOT bear the risk of loss if the guitar was sold by and ultimately stolen from a I. II. Merchant seller Non-merchant seller (A) I only (B) Il only (C) both I and II (D) neither I nor II 5. Which of the following correctly describes a seller's right to cure? UCC 2-508 As long as the time for performance has not passed, the seller has the right to correct defects in shipments made. The seller must give timely notice of intent to cure before the buyer secures goods elsewhere. (A) I only (B) Il only (C) both I and II (D) neither I nor II 6. For what purpose will a stockholder of a publicly held corporation be permitted to file a shareholder's derivative lawsuit in the name of the corporation? II. To compel payment of a properly declared dividend To recover damages from corporate management for an ultra vires management act (A) I only (B) Il only (C) both I and II (D) neither I nor II 7. When a new partner is admitted to an existing partnership to replace an outgoing partner, the liability of the newly admitted partner for existing partnership debts is: (A) normally limited to the amount of his or her capital contribution to the partnership (B) normally unlimited, and the newly admitted partner's personal property may be seized to satisfy the existing debts (C) joint and several, as well as personal (D) limited to whatever liability the outgoing partner had 8. In a corporation, which of the following rights does a shareholder typically have? Right to vote on fundamental changes in corporate structure such as a merger. Right to reasonable inspection of corporation records. II. (A) I only (B) Il only (C) both I and II (D) neither I nor II 9. Corporations generally have which of the following powers without shareholder approval: I. II. III. Power to acquire their own shares Power to make charitable contributions Power to make loans to directors (A) I only (B) I and II only (C) II and Ill only (D) 1, II, and III 10. Eco Environmental Services, Inc. is a C corporation. Which of the following is a characteristic of a C corporation? (A) It is the business structure of choice for most privately held businesses (B) is allowed to deduct dividends paid prior to paying taxes (C) subject to double taxation on profits if dividends are paid (D) must have only one class of stock Short Answer Question: Michelle owned a building which she orally contracted to sell to Colleen, who was to remove it from its concrete foundation, put it on skids, and drag it away. Before removal, Michelle repudiated the deal. Michelle defends her action by asserting the statute of frauds. (The statute of frauds provisions specify which contracts must be in writing in order to be enforceable). Was this a contract for land or for a good? Does the statute of frauds section of Article 2 apply to this contract? See UCC 2-105 and 2-107(1)