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Chapter 8: Sales Contracts
5 problems · 0 figures8-1 §8.AQ source ↗
What is a sales contract?
Answer
A sales contract is a specific type of contract in which one party is obligated to deliver and transfer ownership of a good to a second party, who in turn is obligated to pay for the good in money, or its equivalent.
8-3 §8.AQ source ↗
What source of law governs sales contracts?
- a.Common Law.
- b.The Uniform Commercial Code.
- c.Statutory Law.
- d.Federal Law.
Answer
B. The Uniform Commercial Code.
8-5 §8.AQ source ↗
Distinguish a shipment contract from a destination contract.
Answer
A shipment contract occurs when it is the responsibility of the seller to make the shipping arrangements and to transfer the goods to the common carrier. Under this contract, title passes to the buyer at the time of shipment, so the buyer bears the risk of loss, even when he or she has not taken possession of the goods. A destination contract occurs when the seller is required to deliver the goods to a location that is stipulated in the contract. Under this contract, title transfers when the goods are delivered, but the seller bears the risk of loss until that time.
8-7 §8.AQ source ↗
Describe the difference between an express and implied warranty.
Answer
An express warranty is one in which the seller explicitly guarantees the quality of the good or service sold. Typically, the vendor provides a statement, or other binding document, as part of the sales contract. In certain circumstances where no express warranty was made, the law implies a warranty. This statement means that the warranty automatically arises from the fact that a sale was made.
8-9 §8.AQ source ↗
The following are possible remedies to buyers under the UCC:
- a.Cancel the contract.
- b.Obtain Cover.
- c.Sue.
- d.All of the above.
Answer
D. All of the above.
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Problems and answers are adapted from Business Law I Essentials 2e by Mirande Valbrune, Renee De Assis and Suzanne Cardell, OpenStax, and are used under the CC BY-NC-SA 4.0 licence. Access for free at https://openstax.org/books/business-law-i-essentials-2e/pages/1-introduction. Illustrations: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license. This adaptation is released under the same licence, is non-commercial, and is neither affiliated with nor endorsed by OpenStax or Rice University.