Question

Q1: The only definitive term that must be provided in order to have a contract under the UCC is price.

a) true

b) false

Q2: Big Box Store orders 1,000 boxes of white twinkle lights from Lumination Outlet. When Big Box receives the order, it notices that 800 of the boxes contain white twinkle lights and 200 of the boxes contain orange twinkle lights. Big Box:

a) can reject the entire order under the force majeure rule

b) must pay for the twinkle lights because the quantity was stated

c) must pay for the twinkle lights because 80% of the order was correct, so there was substantial performance

d) can reject the entire order under the perfect tender rule

Q3: Ace Inc sends a purchase order to Office Supply Mart ordering 100 office printers for $75 per printer. Ace's purchase order states that the parties will arbitrate all disputes. Office Supply Mart sends 100 office printers along with an invoice for $7500. The invoice states that parties will litigate all disputes in Fulton County, Georgia. Despite the conflict in the resolution of disputes provisions, a contract exists between these two parties?

a) true

b) false

Answer 1

Q1: Answer: False

Explanation:

Price is not a definite term that must be provided to have a contract under UCC. If the price is not definite, the court would determine a reasonable price at the time of delivery. The quantity term must be definite because courts will not have a basis for determining a remedy in the absence of quantity. Hence the given statement is false.

Q2. Answer: d) can reject the entire order under the perfect tender rule

Explanation:

Under the perfect tender rule, the seller is obligated to tender conforming goods to the buyer. If the goods are nonconforming, the buyer has the right to accept the goods, reject the entire order or accept in part and reject in part. Hence Big Box can reject the entire order under the perfect tender rule as twinkle lights have delivered 800 boxes of white twinkle lights and 200 boxes of orange twinkle lights instead of 1000 boxes of white twinkle lights. Force Majeure rule relieves the parties from their obligations in case of an unexpected occurrence for which neither party can be blamed. Hence Force Majeure rule does not apply here.

Q3. Answer: True

Explanation:

As per the UCC, the conduct of the parties that recognizes the existence of a contract is sufficient to establish a contract for the sale of goods even if there are conflicting terms in the writings of the parties. The court may strike the disputed terms from the contract. Here Ace Inc has sent the purchase order and Office Supply Mat has sent the printers as per the order. Hence the conduct of the parties is enough to establish a contract and the court may strike the term regarding the dispute resolution provisions. Hence the given statement is true.