Commercial Business Transactions Quiz

What is a negotiable instrument?

• A transferable document that promises to pay the bearer a sum of money at a future date or on-demand

• A document that represents partial ownership of a company

• A document that guarantees the quality of goods

• A document that transfers ownership of real property

Which of the following is covered by Article 2 of the Uniform Commercial Code?

• Sale of goods

• Service contracts

• Lease of real property

• Sale of stocks

What is a bailment?

• Transfer of goods for free

• Transfer of possession of goods without transferring ownership

• Transfer of ownership of goods without transferring possession

• Transfer of both possession and ownership of goods

What is an express warranty?

• A promise made by the buyer regarding the delivery

• A promise made by the buyer regarding the payment

• An implied promise made by the seller or manufacturer regarding the goods

• A specific promise made by the seller or manufacturer regarding the goods

What does the statute of limitations for breach of contract under U.C.C. Article 2 state?

• 6 years

• 4 years

• 8 years

• 2 years

When does the risk of loss pass from the seller to the buyer in an F.O.B. Destination contract?

• When the goods are given to the carrier

• When the goods are next to a means of transportation agreed to by the parties

• When the buyer receives the goods

• When the goods reach a particular destination

What happens if identified goods are destroyed before delivery?

• The contract is still enforceable and the buyer can get their money back

• The contract is void and the buyer can get their money back

• The contract is still enforceable and the buyer can get another product

• The contract is void and the buyer can get another product

What is the seller's right if the buyer is insolvent?

• The seller may reclaim the goods from an insolvent buyer if he requests the goods 3 months from the delivery

• The seller may cancel the contract as soon as the buyer is still in possession of goods when they say they cannot pay

• The seller may reclaim the goods from an insolvent buyer if he requests the goods 10 days from the delivery

• The seller may refuse to deliver goods to a buyer when the buyer is insolvent

What is commercial impracticability?

• A situation where the buyer avoids the obligations of the contract due to seller's fault

• A situation where the buyer avoids the obligations of the contract due to unforeseen circumstances beyond their control

• A situation where the seller avoids the obligations of the contract due to unforeseen circumstances beyond their control

• A situation where the seller avoids the obligations of the contract due to buyer's fault

What is the Merchants' Firm Offer Rule?

• A merchant is required to keep an offer open beyond 3 months even if they promise to do so

• A merchant must keep an offer open for a reasonable period of time if they receive no consideration

• A merchant must keep an offer open for a reasonable period of time even if they receive no consideration

• A merchant is not required to keep an offer open beyond 3 months even if they promise to do so