Question

33.    Miller needs to paint his metal workshop. He tells the paint store employee what he needs and says he is concerned about the paint peeling. The employee recommends Pitts Paint, which the paint’s maker advertises as a paint that will not peel. If Miller buys Pitts Paint based on the employee’s recommendation, and it peels right away, with respect to fitness for a particular purpose, there is

a. no breach of warranty; there were not written warranty terms.

b. a breach of an implied warranty; Miller relied on the paint store employee’s judgment and recommendation.

c. no breach of warranty; sellers are not obligated to supply high quality goods.

d. no breach of warranty; the maker did not have reason to know of Miller’s particular use for the paint.

e. no breach of warranty; a seller cannot create a warranty.

34.    Under Article 3 of the UCC, a check is

a. an unconditional written order to pay that involves three parties: a drawer, drawee, payee; the drawee may be a bank, person, or business.

b. a draft drawn on a bank and payable on demand.

c. a promise by one party to pay a certain sum of money to another party; two parties are involved: the maker and the payee; payment may be set at some future date.

d. an acknowledgment by a bank that it has received money from a customer with a promise from the bank that it will repay the money received either at a specified date or upon demand; two parties are involved: a maker and a payee

e. something that bounces like a basketball ball.

35.    A __________ is an acknowledgment by a bank that it has received money from a customer with a promise by the bank that it will repay the money received at a specific date.

a. certificate of repayment

b. certificate of payment

c. check

d. certificate of saving

e. certificate of deposit

36.    The ________ is the party that receives payment under a negotiable instruments.

a. payee

b. drawer

c. payer

d. drawee

e. receivee

37.    Which of the following transactions is governed by Article 2 of the UCC?

a. The sale of an apartment complex.

b. The sale of oranges to be picked from a 10-acre orange grove.

c. The sale of common stock of a soft drink company.

d. A contract to receive medical services in a hospital.

e. None of the above.

Answer 1

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Answer:

33

Option A because

No breach of implied warranty; there were not written warranty terms

34

Option B because

a draft drawn on a bank and payable on demand.

35

A special form of note is the certificate of deposit, a written acknowledgment by a bank that it has received money and agrees to repay it at a time specified in the certificate.

36

The payee, who is the person receiving the payment, must be named or otherwise indicated on the instrument

37

The sale of oranges to be picked from a 10-acre grove.