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                        Question 1 of 30
1. Question
A wholesale distributor in Tulsa, Oklahoma, enters into a contract with a manufacturing firm in Wichita, Kansas, for the delivery of 1,000 specialized electronic components in three separate monthly installments. The contract specifies that each installment must meet stringent quality standards. The first installment of 300 components arrives, and upon inspection, the buyer discovers that 20 components have minor cosmetic blemishes that do not affect their functionality. The buyer, believing this constitutes a failure to conform to the contract, immediately rejects the entire first installment. The seller, upon notification of the defect, offers to replace the 20 blemished components with perfect ones and requests permission to do so. Assuming the contract is considered an installment contract under UCC Article 2, and the cosmetic blemishes do not substantially impair the value of the entire contract, what is the buyer’s obligation if the seller cures the defect by providing conforming components?
Correct
The Uniform Commercial Code (UCC) Article 2, as adopted in Oklahoma, governs contracts for the sale of goods. A crucial aspect of these contracts is the concept of “perfect tender.” Under UCC § 2-601, if the goods or the tender of delivery fail in any respect to conform to the contract, the buyer may reject the whole, accept the whole, or accept any commercial unit or units and reject the rest. This is the perfect tender rule. However, this rule is subject to several exceptions. One significant exception is the “cure” by the seller, as outlined in UCC § 2-508. If the time for performance has not yet expired, and the seller had reason to believe that the tender would be acceptable with or without a money allowance, the seller may notify the buyer of their intention to cure and then make a conforming delivery within the contract time. Another exception is the “installment contract” provision, UCC § 2-612, which states that a buyer may reject an installment only if the nonconformity substantially impairs the value of that installment and cannot be cured. If the nonconformity does not substantially impair the value of the whole contract, the buyer must accept the installment. The question asks about a situation where a buyer rejects an installment of goods due to a nonconformity that *does not* substantially impair the value of the entire contract. In such a case, the buyer cannot reject the installment unless the seller fails to cure the nonconformity. Therefore, the buyer must accept the installment if the seller cures the defect.
Incorrect
The Uniform Commercial Code (UCC) Article 2, as adopted in Oklahoma, governs contracts for the sale of goods. A crucial aspect of these contracts is the concept of “perfect tender.” Under UCC § 2-601, if the goods or the tender of delivery fail in any respect to conform to the contract, the buyer may reject the whole, accept the whole, or accept any commercial unit or units and reject the rest. This is the perfect tender rule. However, this rule is subject to several exceptions. One significant exception is the “cure” by the seller, as outlined in UCC § 2-508. If the time for performance has not yet expired, and the seller had reason to believe that the tender would be acceptable with or without a money allowance, the seller may notify the buyer of their intention to cure and then make a conforming delivery within the contract time. Another exception is the “installment contract” provision, UCC § 2-612, which states that a buyer may reject an installment only if the nonconformity substantially impairs the value of that installment and cannot be cured. If the nonconformity does not substantially impair the value of the whole contract, the buyer must accept the installment. The question asks about a situation where a buyer rejects an installment of goods due to a nonconformity that *does not* substantially impair the value of the entire contract. In such a case, the buyer cannot reject the installment unless the seller fails to cure the nonconformity. Therefore, the buyer must accept the installment if the seller cures the defect.
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                        Question 2 of 30
2. Question
A pottery supplier in Oklahoma orally agrees to sell 500 custom ceramic plates, each priced at $15, to a restaurant owner in Texas. The agreement specifies a unique glaze and firing process. Relying on this oral commitment, the Oklahoma supplier expends considerable resources and begins the specialized production. Subsequently, the supplier delivers 300 of the custom plates to the Texas restaurant, and the owner accepts them without objection. The remaining 200 plates are not yet produced. The Texas owner later refuses to accept or pay for any of the plates, citing the lack of a signed written agreement. What is the enforceability of the oral agreement under Oklahoma’s UCC Article 2?
Correct
In Oklahoma, under the Uniform Commercial Code (UCC) Article 2, when a contract for the sale of goods is formed and one party has made a substantial commitment to the contract before receiving a signed writing from the other party, the UCC may still recognize the contract’s existence. Specifically, UCC § 2-201(3)(c) provides an exception to the statute of frauds for goods for which payment has been made and accepted or for which goods have been received and accepted. In this scenario, the initial oral agreement between the Oklahoma pottery supplier and the Texas restaurant owner for 500 custom ceramic plates at $15 each was for a total value of $7,500. The supplier, relying on this agreement, began the specialized firing process, incurring significant costs and dedicating resources, which constitutes a substantial commitment. The delivery of 300 plates and their subsequent acceptance by the restaurant owner signifies partial performance and acceptance under UCC § 2-201(3)(c). The UCC generally requires a writing for contracts for the sale of goods priced at $500 or more. However, this exception allows enforcement of the oral contract to the extent of the goods accepted. Therefore, the oral contract is enforceable for the 300 plates that were delivered and accepted by the Texas restaurant owner. The remaining 200 plates, not having been delivered or accepted, would fall outside the scope of this specific enforcement exception. The focus is on the goods that have been both delivered and accepted, validating the oral agreement for that portion.
Incorrect
In Oklahoma, under the Uniform Commercial Code (UCC) Article 2, when a contract for the sale of goods is formed and one party has made a substantial commitment to the contract before receiving a signed writing from the other party, the UCC may still recognize the contract’s existence. Specifically, UCC § 2-201(3)(c) provides an exception to the statute of frauds for goods for which payment has been made and accepted or for which goods have been received and accepted. In this scenario, the initial oral agreement between the Oklahoma pottery supplier and the Texas restaurant owner for 500 custom ceramic plates at $15 each was for a total value of $7,500. The supplier, relying on this agreement, began the specialized firing process, incurring significant costs and dedicating resources, which constitutes a substantial commitment. The delivery of 300 plates and their subsequent acceptance by the restaurant owner signifies partial performance and acceptance under UCC § 2-201(3)(c). The UCC generally requires a writing for contracts for the sale of goods priced at $500 or more. However, this exception allows enforcement of the oral contract to the extent of the goods accepted. Therefore, the oral contract is enforceable for the 300 plates that were delivered and accepted by the Texas restaurant owner. The remaining 200 plates, not having been delivered or accepted, would fall outside the scope of this specific enforcement exception. The focus is on the goods that have been both delivered and accepted, validating the oral agreement for that portion.
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                        Question 3 of 30
3. Question
Ms. Chen, a resident of Tulsa, Oklahoma, orally agreed to sell specialized industrial machinery to Mr. Abernathy, a businessman from Oklahoma City, for a total price of \( \$15,000 \). As part of the agreement, Mr. Abernathy immediately paid \( \$1,000 \) via electronic transfer and took possession of the machinery. Later, Mr. Abernathy refused to pay the remaining balance, arguing that the oral agreement was unenforceable under the Statute of Frauds because the sale exceeded \( \$500 \). Assuming all other aspects of the agreement are valid, what is the enforceability of the oral contract under Oklahoma’s adoption of UCC Article 2?
Correct
The Uniform Commercial Code (UCC) Article 2 governs contracts for the sale of goods. In Oklahoma, as in most states that have adopted the UCC, a contract for the sale of goods for the price of \( \$500 \) or more is generally not enforceable unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by their authorized agent or broker. This is known as the Statute of Frauds. However, there are several exceptions to this rule. One significant exception is found in UCC § 2-201(3)(c), which states that a contract which does not satisfy the requirements of the Statute of Frauds but is valid in other respects is enforceable with respect to goods for which payment has been made and accepted or which have been received and accepted. In this scenario, the oral agreement was for the sale of specialized manufacturing equipment exceeding \( \$500 \). While the agreement itself would typically require a writing, the buyer, Mr. Abernathy, paid \( \$1,000 \) in advance and received delivery of the equipment. The payment made and the acceptance of the received goods remove the contract from the Statute of Frauds, making the oral agreement enforceable. Therefore, the seller, Ms. Chen, can enforce the remainder of the oral contract for the agreed-upon price.
Incorrect
The Uniform Commercial Code (UCC) Article 2 governs contracts for the sale of goods. In Oklahoma, as in most states that have adopted the UCC, a contract for the sale of goods for the price of \( \$500 \) or more is generally not enforceable unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by their authorized agent or broker. This is known as the Statute of Frauds. However, there are several exceptions to this rule. One significant exception is found in UCC § 2-201(3)(c), which states that a contract which does not satisfy the requirements of the Statute of Frauds but is valid in other respects is enforceable with respect to goods for which payment has been made and accepted or which have been received and accepted. In this scenario, the oral agreement was for the sale of specialized manufacturing equipment exceeding \( \$500 \). While the agreement itself would typically require a writing, the buyer, Mr. Abernathy, paid \( \$1,000 \) in advance and received delivery of the equipment. The payment made and the acceptance of the received goods remove the contract from the Statute of Frauds, making the oral agreement enforceable. Therefore, the seller, Ms. Chen, can enforce the remainder of the oral contract for the agreed-upon price.
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                        Question 4 of 30
4. Question
Ms. Albright, a drilling contractor in Tulsa, Oklahoma, entered into a contract with “RigWorks Inc.” for the purchase of a specialized drilling rig. Upon delivery, Ms. Albright noticed a minor cosmetic imperfection but proceeded with a preliminary test run. After two weeks of operational use, she discovered a significant internal defect that substantially impaired the rig’s performance for its intended deep-earth drilling purpose. She immediately contacted RigWorks Inc. to inform them of the defect and her intent to reject the equipment. However, she continued to use the rig for an additional week to fulfill an urgent client commitment, as returning it would have incurred substantial penalties and further delays. Which of the following best describes the legal status of Ms. Albright’s acceptance of the drilling rig under Oklahoma UCC Article 2?
Correct
Under Oklahoma’s Uniform Commercial Code (UCC) Article 2, a buyer’s right to reject goods is a crucial remedy for non-conformity. Rejection must generally occur within a reasonable time after delivery and before any substantial change in the condition of the goods, unless such change is due to their own defects. The buyer must then seasonably notify the seller of the rejection. If the buyer exercises dominion over the goods inconsistent with the seller’s ownership, they are deemed to have accepted them. In this scenario, Ms. Albright’s continued use of the specialized drilling equipment for three weeks after discovering the critical flaw, which rendered it unsuitable for its intended purpose, constitutes an exercise of dominion. This prolonged use, beyond a reasonable period to inspect and reject, signifies acceptance. Acceptance of goods means the buyer must pay the contract rate for any goods accepted and can only seek remedies for breach of warranty after acceptance. Therefore, Ms. Albright’s actions preclude her from rightfully rejecting the equipment at that juncture.
Incorrect
Under Oklahoma’s Uniform Commercial Code (UCC) Article 2, a buyer’s right to reject goods is a crucial remedy for non-conformity. Rejection must generally occur within a reasonable time after delivery and before any substantial change in the condition of the goods, unless such change is due to their own defects. The buyer must then seasonably notify the seller of the rejection. If the buyer exercises dominion over the goods inconsistent with the seller’s ownership, they are deemed to have accepted them. In this scenario, Ms. Albright’s continued use of the specialized drilling equipment for three weeks after discovering the critical flaw, which rendered it unsuitable for its intended purpose, constitutes an exercise of dominion. This prolonged use, beyond a reasonable period to inspect and reject, signifies acceptance. Acceptance of goods means the buyer must pay the contract rate for any goods accepted and can only seek remedies for breach of warranty after acceptance. Therefore, Ms. Albright’s actions preclude her from rightfully rejecting the equipment at that juncture.
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                        Question 5 of 30
5. Question
A commercial orchard in Oklahoma, managed by AgriHarvest Inc., ordered a specialized harvesting machine from a manufacturer in Kansas, AgriMech Solutions. Upon delivery, AgriHarvest discovered that the machine had a significant defect rendering it incapable of performing its intended function for the upcoming pecan harvest, which was imminent. AgriHarvest immediately notified AgriMech Solutions of the rejection, citing the defect. AgriMech Solutions, however, failed to provide any instructions for the return or disposition of the defective machine. Given the highly perishable nature of pecans and the approaching harvest season, AgriHarvest, after a reasonable period of waiting for instructions and observing the machine’s potential for deterioration if left exposed, decided to sell the machine at a public auction to mitigate potential losses. What is the legal status of AgriHarvest’s actions under Oklahoma’s UCC Article 2 concerning the rejection and subsequent sale of the machine?
Correct
Under Oklahoma’s Uniform Commercial Code (UCC) Article 2, when a buyer rejects goods, they generally have a duty to hold the goods with reasonable care for the seller’s disposition. This duty is not absolute and can be modified by agreement or the nature of the goods. If the goods are perishable or threaten to decline speedily in value, the buyer may have additional obligations or rights to sell them. Specifically, UCC § 2-606 outlines what constitutes acceptance of goods, and § 2-602 details the manner and effect of rightful rejection. When a buyer rightfully rejects goods, they are not obligated to return them to the seller unless the seller has made no prior arrangements for their return and the buyer is a merchant. However, if the buyer chooses to resell the rejected goods, especially in a situation where they are perishable or where the seller has no place of business at the market, the buyer may do so. The proceeds from such a resale, after deducting reasonable expenses of the sale, are held for the benefit of the seller. The buyer’s actions in this scenario, specifically their communication of rejection and subsequent actions regarding the goods, are crucial in determining whether they acted reasonably and did not breach their duties. The focus is on whether the buyer’s actions were commercially reasonable and in good faith, considering the circumstances, including the nature of the goods and the seller’s lack of response.
Incorrect
Under Oklahoma’s Uniform Commercial Code (UCC) Article 2, when a buyer rejects goods, they generally have a duty to hold the goods with reasonable care for the seller’s disposition. This duty is not absolute and can be modified by agreement or the nature of the goods. If the goods are perishable or threaten to decline speedily in value, the buyer may have additional obligations or rights to sell them. Specifically, UCC § 2-606 outlines what constitutes acceptance of goods, and § 2-602 details the manner and effect of rightful rejection. When a buyer rightfully rejects goods, they are not obligated to return them to the seller unless the seller has made no prior arrangements for their return and the buyer is a merchant. However, if the buyer chooses to resell the rejected goods, especially in a situation where they are perishable or where the seller has no place of business at the market, the buyer may do so. The proceeds from such a resale, after deducting reasonable expenses of the sale, are held for the benefit of the seller. The buyer’s actions in this scenario, specifically their communication of rejection and subsequent actions regarding the goods, are crucial in determining whether they acted reasonably and did not breach their duties. The focus is on whether the buyer’s actions were commercially reasonable and in good faith, considering the circumstances, including the nature of the goods and the seller’s lack of response.
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                        Question 6 of 30
6. Question
A manufacturer in Tulsa, Oklahoma, entered into a contract with a supplier in Wichita, Kansas, for the delivery of specialized electronic components in three separate shipments over six months. The contract stipulated that each shipment would be inspected upon arrival and that acceptance of one shipment did not waive the right to reject subsequent shipments. The first shipment arrived with a minor cosmetic blemish on 5% of the components, which did not affect their functionality. The manufacturer, noting the blemish but deeming it insignificant for the immediate production needs, accepted the first shipment. The second shipment, however, contained components with a critical internal defect that rendered 30% of them inoperable, a defect that could not be readily cured by the manufacturer. This defect substantially impaired the value of the second shipment. What is the manufacturer’s most appropriate recourse regarding the second shipment and the contract as a whole, considering the nature of the defect and the contract terms?
Correct
Under Oklahoma’s Uniform Commercial Code (UCC) Article 2, a buyer’s right to reject goods is a crucial remedy when the goods fail to conform to the contract. The “perfect tender rule,” as codified in UCC § 2-601, generally allows a buyer to reject the entire shipment if any part of the goods or the tender of delivery fails in any respect to conform to the contract. However, this rule is subject to several important exceptions. One significant exception is found in UCC § 2-612, which deals with installment contracts. An installment contract is defined as one which requires or authorizes the delivery of goods in separate lots to be separately accepted, even though the contract contains a clause “each delivery is a separate contract” or its equivalent. For installment contracts, the perfect tender rule is modified. Under UCC § 2-612(2), the buyer may reject a *particular installment* only if the non-conformity substantially impairs the value of that installment and cannot be cured. Furthermore, UCC § 2-612(3) addresses rejection of the *entire installment contract*. The buyer can reject the entire contract if a non-conformity in one or more installments substantially impairs the value of the whole contract. However, if the buyer accepts a non-conforming installment without seasonably notifying the seller of cancellation, or if the buyer brings an action with respect only to past installments, the buyer must reinstate the contract. Therefore, in a scenario involving an installment contract, the buyer’s ability to reject is not absolute for every minor deviation; it hinges on whether the non-conformity substantially impairs the value of the installment or the entire contract, and whether cure is possible for the installment itself.
Incorrect
Under Oklahoma’s Uniform Commercial Code (UCC) Article 2, a buyer’s right to reject goods is a crucial remedy when the goods fail to conform to the contract. The “perfect tender rule,” as codified in UCC § 2-601, generally allows a buyer to reject the entire shipment if any part of the goods or the tender of delivery fails in any respect to conform to the contract. However, this rule is subject to several important exceptions. One significant exception is found in UCC § 2-612, which deals with installment contracts. An installment contract is defined as one which requires or authorizes the delivery of goods in separate lots to be separately accepted, even though the contract contains a clause “each delivery is a separate contract” or its equivalent. For installment contracts, the perfect tender rule is modified. Under UCC § 2-612(2), the buyer may reject a *particular installment* only if the non-conformity substantially impairs the value of that installment and cannot be cured. Furthermore, UCC § 2-612(3) addresses rejection of the *entire installment contract*. The buyer can reject the entire contract if a non-conformity in one or more installments substantially impairs the value of the whole contract. However, if the buyer accepts a non-conforming installment without seasonably notifying the seller of cancellation, or if the buyer brings an action with respect only to past installments, the buyer must reinstate the contract. Therefore, in a scenario involving an installment contract, the buyer’s ability to reject is not absolute for every minor deviation; it hinges on whether the non-conformity substantially impairs the value of the installment or the entire contract, and whether cure is possible for the installment itself.
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                        Question 7 of 30
7. Question
Prairie Ag Supplies, a merchant specializing in agricultural machinery, sends a signed purchase order to “Oklahoma Farm Ventures” for a specific model of tractor. The purchase order, dated August 1, 2024, clearly states, “This offer is firm and will remain open until September 15, 2024.” Oklahoma Farm Ventures receives the purchase order and, on August 15, 2024, sends a signed acceptance. However, on August 20, 2024, Oklahoma Farm Ventures attempts to revoke its acceptance, citing a change in market conditions. Under Oklahoma UCC Article 2, what is the legal status of Prairie Ag Supplies’ offer to sell the tractor?
Correct
Under Oklahoma’s adoption of the Uniform Commercial Code (UCC) Article 2, specifically regarding the sale of goods, the concept of “firm offers” provides a mechanism for a merchant to be bound by an offer even without consideration. Oklahoma UCC § 2-205 addresses firm offers made by merchants. A firm offer is an offer by a merchant to buy or sell goods in a signed writing which by its terms gives assurance that it will be held open. Such an offer is not revocable for lack of consideration during the time stated, or if no time is stated, for a reasonable time, but in no event may such period of irrevocability exceed three months. The key elements are that the offer must be by a merchant, in a signed writing, and give assurance of being held open. In this scenario, the offer is made by “Prairie Ag Supplies,” a merchant dealing in farm equipment. The offer is in a signed writing, a purchase order. The purchase order explicitly states “This offer is firm and will remain open until September 15, 2024.” This assurance of irrevocability is for a specific period. Therefore, Prairie Ag Supplies is bound by its offer to sell the tractor for the stated price until September 15, 2024, irrespective of whether the buyer provided consideration to keep the offer open. The buyer’s attempt to revoke their acceptance prior to the firm offer’s expiration date is a separate issue and does not affect the merchant’s obligation under the firm offer. The firm offer irrevocability is determined by the terms of the offer itself, not by the buyer’s actions concerning acceptance or revocation of acceptance.
Incorrect
Under Oklahoma’s adoption of the Uniform Commercial Code (UCC) Article 2, specifically regarding the sale of goods, the concept of “firm offers” provides a mechanism for a merchant to be bound by an offer even without consideration. Oklahoma UCC § 2-205 addresses firm offers made by merchants. A firm offer is an offer by a merchant to buy or sell goods in a signed writing which by its terms gives assurance that it will be held open. Such an offer is not revocable for lack of consideration during the time stated, or if no time is stated, for a reasonable time, but in no event may such period of irrevocability exceed three months. The key elements are that the offer must be by a merchant, in a signed writing, and give assurance of being held open. In this scenario, the offer is made by “Prairie Ag Supplies,” a merchant dealing in farm equipment. The offer is in a signed writing, a purchase order. The purchase order explicitly states “This offer is firm and will remain open until September 15, 2024.” This assurance of irrevocability is for a specific period. Therefore, Prairie Ag Supplies is bound by its offer to sell the tractor for the stated price until September 15, 2024, irrespective of whether the buyer provided consideration to keep the offer open. The buyer’s attempt to revoke their acceptance prior to the firm offer’s expiration date is a separate issue and does not affect the merchant’s obligation under the firm offer. The firm offer irrevocability is determined by the terms of the offer itself, not by the buyer’s actions concerning acceptance or revocation of acceptance.
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                        Question 8 of 30
8. Question
A wheat farmer in Oklahoma, who regularly sells harvested grain to commercial entities, contracts with a large bakery in Tulsa for a substantial quantity of winter wheat. The contract is for wheat suitable for bread production. Upon delivery and initial processing, the bakery discovers that the wheat batch contains significantly elevated levels of a naturally occurring mycotoxin, rendering it unfit for human consumption and thus unsuitable for its intended baking purpose. The farmer was unaware of the specific toxin levels, attributing any potential issues to typical harvest variability. What is the most accurate legal characterization of the farmer’s liability to the bakery under Oklahoma’s adoption of UCC Article 2?
Correct
The Uniform Commercial Code (UCC) Article 2, as adopted in Oklahoma, governs contracts for the sale of goods. When a contract for sale involves a merchant, specific rules apply regarding warranties. In this scenario, a farmer in Oklahoma selling wheat to a commercial bakery is a sale of goods. The farmer, by regularly dealing in wheat, is considered a merchant with respect to goods of that kind. Under UCC § 2-314, an implied warranty of merchantability is imposed on a merchant seller. This warranty guarantees that the goods are fit for the ordinary purposes for which such goods are used. For wheat, this would include being free from harmful contaminants and suitable for baking. The farmer’s failure to disclose the presence of excessive mycotoxins, which rendered the wheat unfit for its ordinary purpose of baking, constitutes a breach of this implied warranty. The bakery’s discovery of the issue after processing and subsequent loss of product and customer goodwill are direct damages resulting from this breach. The farmer’s knowledge or lack thereof regarding the specific toxin levels is generally irrelevant to the existence of the implied warranty of merchantability, though it might be relevant to defenses or remedies in some contexts. However, the core of the breach lies in the condition of the goods themselves at the time of sale.
Incorrect
The Uniform Commercial Code (UCC) Article 2, as adopted in Oklahoma, governs contracts for the sale of goods. When a contract for sale involves a merchant, specific rules apply regarding warranties. In this scenario, a farmer in Oklahoma selling wheat to a commercial bakery is a sale of goods. The farmer, by regularly dealing in wheat, is considered a merchant with respect to goods of that kind. Under UCC § 2-314, an implied warranty of merchantability is imposed on a merchant seller. This warranty guarantees that the goods are fit for the ordinary purposes for which such goods are used. For wheat, this would include being free from harmful contaminants and suitable for baking. The farmer’s failure to disclose the presence of excessive mycotoxins, which rendered the wheat unfit for its ordinary purpose of baking, constitutes a breach of this implied warranty. The bakery’s discovery of the issue after processing and subsequent loss of product and customer goodwill are direct damages resulting from this breach. The farmer’s knowledge or lack thereof regarding the specific toxin levels is generally irrelevant to the existence of the implied warranty of merchantability, though it might be relevant to defenses or remedies in some contexts. However, the core of the breach lies in the condition of the goods themselves at the time of sale.
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                        Question 9 of 30
9. Question
A merchant in Tulsa, Oklahoma, agrees to sell 500 units of specialized electronic components to a manufacturing firm located in Dallas, Texas. The contract specifies delivery “F.O.B. Tulsa” and requires payment upon presentation of a bill of lading. Upon arrival of the components in Dallas, the manufacturing firm discovers that 100 of the units are defective and do not meet the agreed-upon technical specifications. Which of the following statements best describes the manufacturing firm’s rights under Oklahoma’s adoption of UCC Article 2 concerning inspection and acceptance of the goods?
Correct
The Uniform Commercial Code (UCC) Article 2 governs contracts for the sale of goods. When a contract for sale is entered into, and there is no agreement otherwise, the buyer has a right to inspect the goods after their arrival and before payment or acceptance. This right of inspection is a fundamental aspect of buyer protection under UCC Article 2. The buyer can inspect the goods at any reasonable place and time and in any reasonable manner. If the goods are conforming, the buyer must accept them. However, if upon inspection the goods are found to be non-conforming, the buyer may reject them. The right to inspect generally precedes the obligation to pay, unless the contract specifies otherwise, such as a contract C.O.D. (cash on delivery). The UCC emphasizes that inspection is a prerequisite to acceptance and payment unless the contract terms alter this. For instance, a contract requiring payment against documents of title does not, by itself, impair the buyer’s right to inspect or any remedies available. The core principle is that the buyer should have the opportunity to verify that the goods delivered conform to the contract before being obligated to pay for them or formally accept them.
Incorrect
The Uniform Commercial Code (UCC) Article 2 governs contracts for the sale of goods. When a contract for sale is entered into, and there is no agreement otherwise, the buyer has a right to inspect the goods after their arrival and before payment or acceptance. This right of inspection is a fundamental aspect of buyer protection under UCC Article 2. The buyer can inspect the goods at any reasonable place and time and in any reasonable manner. If the goods are conforming, the buyer must accept them. However, if upon inspection the goods are found to be non-conforming, the buyer may reject them. The right to inspect generally precedes the obligation to pay, unless the contract specifies otherwise, such as a contract C.O.D. (cash on delivery). The UCC emphasizes that inspection is a prerequisite to acceptance and payment unless the contract terms alter this. For instance, a contract requiring payment against documents of title does not, by itself, impair the buyer’s right to inspect or any remedies available. The core principle is that the buyer should have the opportunity to verify that the goods delivered conform to the contract before being obligated to pay for them or formally accept them.
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                        Question 10 of 30
10. Question
Prairie Farms, an agricultural cooperative operating in Oklahoma and a merchant under UCC Article 2, sent a written purchase order to Oakhaven Dairy, a dairy processing company also a merchant under Oklahoma law, confirming the sale of 500 gallons of Grade A milk at a price of $3.50 per gallon. The purchase order was duly signed by an authorized representative of Prairie Farms. Oakhaven Dairy received this purchase order but did not send any written objection to its contents within ten days of receipt. Subsequently, Oakhaven Dairy refused to deliver the milk, asserting that no enforceable contract existed because Oakhaven Dairy had not signed any document confirming the sale. Which of the following statements accurately reflects the enforceability of the agreement under Oklahoma’s adoption of UCC Article 2?
Correct
The Uniform Commercial Code (UCC) Article 2 governs contracts for the sale of goods. When a contract for the sale of goods is between merchants, and one merchant sends a written confirmation of the sale that is sufficient against the sender, and the party receiving the confirmation has reason to know its contents, that confirmation satisfies the statute of frauds against the recipient unless written notice of objection to its contents is given within ten days after it is received. This is known as the “merchant’s confirmation exception” to the statute of frauds, codified in UCC § 2-201(2). In this scenario, Prairie Farms, a merchant, sent a written purchase order to Oakhaven Dairy, also a merchant, confirming the sale of 500 gallons of Grade A milk at a specified price. The purchase order was sufficient against Prairie Farms. Oakhaven Dairy received the purchase order and did not send a written objection within ten days. Therefore, under UCC § 2-201(2), the purchase order serves as a valid confirmation of the agreement, satisfying the statute of frauds for both parties, even if Oakhaven Dairy did not sign the purchase order itself. This rule prevents a merchant from accepting goods or services from another merchant and then later claiming no contract existed because of a lack of signed writing. The exception is designed to facilitate commerce between merchants by relying on their common understanding and established business practices.
Incorrect
The Uniform Commercial Code (UCC) Article 2 governs contracts for the sale of goods. When a contract for the sale of goods is between merchants, and one merchant sends a written confirmation of the sale that is sufficient against the sender, and the party receiving the confirmation has reason to know its contents, that confirmation satisfies the statute of frauds against the recipient unless written notice of objection to its contents is given within ten days after it is received. This is known as the “merchant’s confirmation exception” to the statute of frauds, codified in UCC § 2-201(2). In this scenario, Prairie Farms, a merchant, sent a written purchase order to Oakhaven Dairy, also a merchant, confirming the sale of 500 gallons of Grade A milk at a specified price. The purchase order was sufficient against Prairie Farms. Oakhaven Dairy received the purchase order and did not send a written objection within ten days. Therefore, under UCC § 2-201(2), the purchase order serves as a valid confirmation of the agreement, satisfying the statute of frauds for both parties, even if Oakhaven Dairy did not sign the purchase order itself. This rule prevents a merchant from accepting goods or services from another merchant and then later claiming no contract existed because of a lack of signed writing. The exception is designed to facilitate commerce between merchants by relying on their common understanding and established business practices.
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                        Question 11 of 30
11. Question
A wholesale distributor based in Tulsa, Oklahoma, enters into a contract with a retail establishment in Dallas, Texas, for the sale of 500 units of specialized electronic components. The contract explicitly states the terms of sale as “F.O.B. Tulsa.” During transit via a common carrier, a significant portion of the shipment is damaged due to an unforeseen severe hailstorm that occurred while the goods were en route from Oklahoma to Texas. Who bears the risk of loss for the damaged components under the Uniform Commercial Code as applied in Oklahoma?
Correct
The scenario involves a contract for the sale of goods between a merchant in Oklahoma and a buyer in Texas. The contract specifies that the goods will be shipped “F.O.B. Oklahoma City.” This shipping term, Free On Board, is a crucial element in determining when risk of loss passes from the seller to the buyer, and also who bears the cost of shipping and insurance. Under the Uniform Commercial Code (UCC), which has been adopted in both Oklahoma and Texas, the designation “F.O.B. [place]” means that the seller must, at their own expense and risk, load the goods on board the vessel or other conveyance at that place. In this case, “F.O.B. Oklahoma City” signifies that the seller’s obligation and responsibility for the goods concludes once they are loaded onto the carrier in Oklahoma City. Therefore, any damage or loss occurring to the goods after they have been loaded onto the carrier in Oklahoma City, while in transit to Texas, is at the buyer’s risk. This is because the seller has fulfilled their delivery obligation at the point of shipment. The UCC’s provisions on shipment contracts, such as those indicated by F.O.B. terms, are designed to clearly delineate the responsibilities and risks associated with the movement of goods between parties. The specific location mentioned in the F.O.B. term dictates the point of transfer of risk.
Incorrect
The scenario involves a contract for the sale of goods between a merchant in Oklahoma and a buyer in Texas. The contract specifies that the goods will be shipped “F.O.B. Oklahoma City.” This shipping term, Free On Board, is a crucial element in determining when risk of loss passes from the seller to the buyer, and also who bears the cost of shipping and insurance. Under the Uniform Commercial Code (UCC), which has been adopted in both Oklahoma and Texas, the designation “F.O.B. [place]” means that the seller must, at their own expense and risk, load the goods on board the vessel or other conveyance at that place. In this case, “F.O.B. Oklahoma City” signifies that the seller’s obligation and responsibility for the goods concludes once they are loaded onto the carrier in Oklahoma City. Therefore, any damage or loss occurring to the goods after they have been loaded onto the carrier in Oklahoma City, while in transit to Texas, is at the buyer’s risk. This is because the seller has fulfilled their delivery obligation at the point of shipment. The UCC’s provisions on shipment contracts, such as those indicated by F.O.B. terms, are designed to clearly delineate the responsibilities and risks associated with the movement of goods between parties. The specific location mentioned in the F.O.B. term dictates the point of transfer of risk.
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                        Question 12 of 30
12. Question
Tulsa Oil & Gas Corporation contracted with Petrochem Solutions Inc. for a specialized shipment of drilling fluid additives. Upon delivery to Oklahoma City, the truck was immediately dispatched to a remote drilling site, preventing any immediate inspection by Tulsa Oil & Gas. After the additives were unloaded at the site and initial testing commenced, it was discovered that a significant portion of the additives were contaminated with a substance that rendered them ineffective for the intended purpose, a defect that would have been impossible to discern during a pre-delivery inspection. Tulsa Oil & Gas immediately notified Petrochem Solutions of the non-conformity. What is Tulsa Oil & Gas Corporation’s primary legal recourse regarding the delivered drilling fluid additives under Oklahoma’s UCC Article 2?
Correct
Under Oklahoma’s adoption of the Uniform Commercial Code (UCC) Article 2, a buyer’s right to reject goods that do not conform to the contract is a fundamental protection. This right is typically exercised before acceptance of the goods. Acceptance, as defined in UCC § 2-606, generally occurs when the buyer, after a reasonable opportunity to inspect the goods, signifies that the goods are conforming or that they will take them in spite of their non-conformity, or does any act inconsistent with the seller’s ownership. However, if a buyer accepts goods, they generally lose the right to reject them. While acceptance can occur through express agreement or by failing to reject after a reasonable time for inspection, UCC § 2-608 provides a crucial exception: the right of revocation of acceptance. Revocation of acceptance is permissible if a non-conformity substantially impairs the value of the goods to the buyer, and the buyer accepted them either on the reasonable assumption that the non-conformity would be cured or without discovery of the non-conformity if acceptance was reasonably induced by the seller’s assurances. The key distinction between rejection and revocation lies in the timing and the buyer’s prior knowledge of the defect. Rejection is for non-conforming goods before acceptance, while revocation is for accepted goods where a previously unknown or uncured substantial non-conformity is discovered. In this scenario, the buyer’s initial failure to inspect and subsequent discovery of a substantial defect after delivery, but before any action signifying acceptance beyond taking possession, allows for rejection. The fact that the buyer did not have a reasonable opportunity to inspect at the point of delivery due to the seller’s actions does not negate the right to reject upon discovery of a substantial non-conformity. Therefore, the buyer can reject the goods.
Incorrect
Under Oklahoma’s adoption of the Uniform Commercial Code (UCC) Article 2, a buyer’s right to reject goods that do not conform to the contract is a fundamental protection. This right is typically exercised before acceptance of the goods. Acceptance, as defined in UCC § 2-606, generally occurs when the buyer, after a reasonable opportunity to inspect the goods, signifies that the goods are conforming or that they will take them in spite of their non-conformity, or does any act inconsistent with the seller’s ownership. However, if a buyer accepts goods, they generally lose the right to reject them. While acceptance can occur through express agreement or by failing to reject after a reasonable time for inspection, UCC § 2-608 provides a crucial exception: the right of revocation of acceptance. Revocation of acceptance is permissible if a non-conformity substantially impairs the value of the goods to the buyer, and the buyer accepted them either on the reasonable assumption that the non-conformity would be cured or without discovery of the non-conformity if acceptance was reasonably induced by the seller’s assurances. The key distinction between rejection and revocation lies in the timing and the buyer’s prior knowledge of the defect. Rejection is for non-conforming goods before acceptance, while revocation is for accepted goods where a previously unknown or uncured substantial non-conformity is discovered. In this scenario, the buyer’s initial failure to inspect and subsequent discovery of a substantial defect after delivery, but before any action signifying acceptance beyond taking possession, allows for rejection. The fact that the buyer did not have a reasonable opportunity to inspect at the point of delivery due to the seller’s actions does not negate the right to reject upon discovery of a substantial non-conformity. Therefore, the buyer can reject the goods.
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                        Question 13 of 30
13. Question
An agricultural supplier based in Oklahoma contracts with a rancher in Texas to deliver 100 bales of premium alfalfa hay by May 15th. The contract specifies that the hay must meet certain moisture content and protein levels, crucial for the rancher’s livestock. On May 1st, the Oklahoma supplier ships the hay. Upon arrival in Texas on May 5th, the rancher discovers that the hay is slightly damp and has a lower protein content than stipulated. The rancher immediately rejects the shipment. On May 10th, the Oklahoma supplier, having identified a batch of hay that perfectly meets all contractual specifications, notifies the rancher of their intention to cure the non-conformity and requests to redeliver conforming hay before the May 15th deadline. Under the Uniform Commercial Code as adopted in Oklahoma, what is the legal effect of the supplier’s notification and intent to cure?
Correct
The scenario presented involves a contract for the sale of goods between a merchant in Oklahoma and a buyer in Texas. The Uniform Commercial Code (UCC), adopted in Oklahoma as Title 12A of the Oklahoma Statutes, governs contracts for the sale of goods. Article 2 of the UCC specifically addresses these transactions. The core issue here is the effect of a seller’s non-conforming tender of goods when the buyer has the right to reject. Under UCC § 2-508, a seller may have a right to cure a non-conforming tender if the time for performance has not yet expired. However, this right is not absolute. If the buyer rightfully rejects the goods due to a substantial non-conformity and the seller’s time for performance has expired, the seller generally cannot unilaterally cure the defect unless the contract specifically allows for it or the seller had reasonable grounds to believe the tender would be acceptable with a monetary allowance. In this case, the Oklahoma seller shipped non-conforming hay to the Texas buyer, and the buyer rightfully rejected it. The shipment date was May 1st, and the contract stipulated delivery by May 15th. The seller discovered the non-conformity on May 10th, which is within the contract’s performance period. UCC § 2-508(1) states that where any tender or delivery by the seller is rejected because it is non-conforming and the time for performance has not yet expired, the seller may seasonably notify the buyer of his intention to cure and may then make a conforming delivery within the contract time. Since the seller discovered the issue and notified the buyer of their intent to cure within the original contract delivery window, they are entitled to make a conforming delivery by May 15th. The buyer’s rejection was proper, but the seller’s right to cure, as provided by UCC § 2-508, allows them to substitute conforming goods within the original contract timeframe.
Incorrect
The scenario presented involves a contract for the sale of goods between a merchant in Oklahoma and a buyer in Texas. The Uniform Commercial Code (UCC), adopted in Oklahoma as Title 12A of the Oklahoma Statutes, governs contracts for the sale of goods. Article 2 of the UCC specifically addresses these transactions. The core issue here is the effect of a seller’s non-conforming tender of goods when the buyer has the right to reject. Under UCC § 2-508, a seller may have a right to cure a non-conforming tender if the time for performance has not yet expired. However, this right is not absolute. If the buyer rightfully rejects the goods due to a substantial non-conformity and the seller’s time for performance has expired, the seller generally cannot unilaterally cure the defect unless the contract specifically allows for it or the seller had reasonable grounds to believe the tender would be acceptable with a monetary allowance. In this case, the Oklahoma seller shipped non-conforming hay to the Texas buyer, and the buyer rightfully rejected it. The shipment date was May 1st, and the contract stipulated delivery by May 15th. The seller discovered the non-conformity on May 10th, which is within the contract’s performance period. UCC § 2-508(1) states that where any tender or delivery by the seller is rejected because it is non-conforming and the time for performance has not yet expired, the seller may seasonably notify the buyer of his intention to cure and may then make a conforming delivery within the contract time. Since the seller discovered the issue and notified the buyer of their intent to cure within the original contract delivery window, they are entitled to make a conforming delivery by May 15th. The buyer’s rejection was proper, but the seller’s right to cure, as provided by UCC § 2-508, allows them to substitute conforming goods within the original contract timeframe.
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                        Question 14 of 30
14. Question
In Oklahoma, following a contract for the sale of specialized agricultural equipment, a buyer receives a shipment that includes one unit with a slightly misaligned control panel, a defect that is easily rectifiable by the seller within a few hours. The contract specifies delivery by October 15th, and the buyer rejects the entire shipment on October 14th due to this single defect. The seller, upon receiving notice of rejection, promptly offers to correct the defect and deliver a fully conforming unit by the original contract deadline. Under Oklahoma’s UCC Article 2, what is the most likely legal outcome regarding the buyer’s rejection?
Correct
Under Oklahoma’s adoption of the Uniform Commercial Code (UCC) Article 2, specifically concerning sales of goods, the concept of “perfect tender” is a fundamental principle governing the buyer’s right to reject non-conforming goods. While the UCC generally allows a buyer to reject goods if they “fail in any respect to conform to the contract,” this rule is subject to several important exceptions and limitations. One significant limitation is found in UCC § 2-601, which, while stating the perfect tender rule, is immediately followed by exceptions such as the “cure” provision in § 2-508, the “installment contract” exception in § 2-612, and the “substantial performance” doctrine that has evolved through case law, particularly in situations where strict adherence to perfect tender would lead to commercially unreasonable results. The question probes the nuances of when a buyer can reject goods, focusing on situations where a minor, easily correctable defect might not justify outright rejection if the seller can “cure” the non-conformity. The principle of cure allows a seller, after receiving notice of rejection, to make a conforming delivery within the contract time if the time for performance has not yet expired. Furthermore, if the seller had reasonable grounds to believe the non-conforming tender would be acceptable to the buyer, they may have a further reasonable time to substitute a conforming tender even if the contract time has expired. The question is designed to test the understanding that the perfect tender rule is not absolute and that commercial reasonableness and the seller’s right to cure often temper a buyer’s right to reject for minor defects.
Incorrect
Under Oklahoma’s adoption of the Uniform Commercial Code (UCC) Article 2, specifically concerning sales of goods, the concept of “perfect tender” is a fundamental principle governing the buyer’s right to reject non-conforming goods. While the UCC generally allows a buyer to reject goods if they “fail in any respect to conform to the contract,” this rule is subject to several important exceptions and limitations. One significant limitation is found in UCC § 2-601, which, while stating the perfect tender rule, is immediately followed by exceptions such as the “cure” provision in § 2-508, the “installment contract” exception in § 2-612, and the “substantial performance” doctrine that has evolved through case law, particularly in situations where strict adherence to perfect tender would lead to commercially unreasonable results. The question probes the nuances of when a buyer can reject goods, focusing on situations where a minor, easily correctable defect might not justify outright rejection if the seller can “cure” the non-conformity. The principle of cure allows a seller, after receiving notice of rejection, to make a conforming delivery within the contract time if the time for performance has not yet expired. Furthermore, if the seller had reasonable grounds to believe the non-conforming tender would be acceptable to the buyer, they may have a further reasonable time to substitute a conforming tender even if the contract time has expired. The question is designed to test the understanding that the perfect tender rule is not absolute and that commercial reasonableness and the seller’s right to cure often temper a buyer’s right to reject for minor defects.
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                        Question 15 of 30
15. Question
Consider a scenario in Oklahoma where a contract for the sale of specialized industrial components requires delivery by May 1st. The buyer, “Prairie Dynamics,” receives a shipment on April 28th. Upon inspection, Prairie Dynamics discovers that a critical calibration setting on half of the components is incorrect, rendering them unusable for their intended purpose. The seller, “Tulsa Tech Manufacturing,” is promptly notified of this non-conformity. Tulsa Tech Manufacturing immediately begins to recalibrate and replace the defective components, ensuring that a fully conforming shipment is ready for delivery and is, in fact, delivered to Prairie Dynamics on April 30th. Can Prairie Dynamics rightfully reject the second shipment delivered on April 30th, given that the original contract deadline was May 1st?
Correct
The Uniform Commercial Code (UCC) Article 2, as adopted in Oklahoma, governs contracts for the sale of goods. When a buyer rejects goods due to a non-conformity, the seller may have a right to cure the defect, provided certain conditions are met. Under UCC § 2-508, if the time for performance has not yet expired, the seller may notify the buyer of their intention to cure and then make a conforming tender within the contract time. If the seller had reasonable grounds to believe the non-conforming tender would be acceptable to the buyer, with or without a money allowance, and the seller seasonably notifies the buyer, the seller may have a further reasonable time to cure beyond the contract time. This provision aims to prevent unfair rejection of goods and allows sellers an opportunity to rectify mistakes, fostering efficient commerce. In this scenario, the contract specified delivery by May 1st. The initial delivery on April 28th was non-conforming. The seller, upon notification of the defect, immediately began working on a replacement. Since the contract time for performance had not yet expired when the buyer rejected the goods, the seller could cure by making a conforming tender within the original contract period. The seller’s ability to provide conforming goods by May 1st, even if it required a second attempt after the initial rejection, falls within the seller’s right to cure under UCC § 2-508. Therefore, the buyer cannot reject the conforming goods delivered on April 30th.
Incorrect
The Uniform Commercial Code (UCC) Article 2, as adopted in Oklahoma, governs contracts for the sale of goods. When a buyer rejects goods due to a non-conformity, the seller may have a right to cure the defect, provided certain conditions are met. Under UCC § 2-508, if the time for performance has not yet expired, the seller may notify the buyer of their intention to cure and then make a conforming tender within the contract time. If the seller had reasonable grounds to believe the non-conforming tender would be acceptable to the buyer, with or without a money allowance, and the seller seasonably notifies the buyer, the seller may have a further reasonable time to cure beyond the contract time. This provision aims to prevent unfair rejection of goods and allows sellers an opportunity to rectify mistakes, fostering efficient commerce. In this scenario, the contract specified delivery by May 1st. The initial delivery on April 28th was non-conforming. The seller, upon notification of the defect, immediately began working on a replacement. Since the contract time for performance had not yet expired when the buyer rejected the goods, the seller could cure by making a conforming tender within the original contract period. The seller’s ability to provide conforming goods by May 1st, even if it required a second attempt after the initial rejection, falls within the seller’s right to cure under UCC § 2-508. Therefore, the buyer cannot reject the conforming goods delivered on April 30th.
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                        Question 16 of 30
16. Question
A manufacturing firm in Tulsa, Oklahoma, received a shipment of specialized alloy components from a supplier based in Texas. Upon inspection, the firm discovered that a significant portion of the components did not meet the precise tensile strength specifications outlined in the contract. The firm formally notified the supplier of the non-conformity and rightfully rejected the entire shipment. However, due to an urgent production deadline, the firm’s engineers decided to process a small batch of the non-conforming components, using them in a critical sub-assembly, with the intention of returning the processed components along with the rest of the rejected shipment. What is the most likely legal consequence for the manufacturing firm under Oklahoma’s UCC Article 2 regarding the processed components?
Correct
Under Oklahoma’s Uniform Commercial Code (UCC) Article 2, when a buyer rejects goods due to a non-conformity, and the seller has not been notified of the rejection, the buyer’s actions can impact their rights. Specifically, if a buyer retains possession of goods that they have rightfully rejected, and subsequently exercises dominion over those goods in a manner inconsistent with the seller’s ownership or the seller’s right to reclaim them, the buyer may be deemed to have accepted the goods. This principle is rooted in the concept that a buyer’s conduct can signify acceptance, even if they have formally rejected the goods. The UCC distinguishes between rightful rejection and the subsequent duties of the buyer. Merely holding onto rejected goods is generally permissible for a reasonable time to allow for the seller’s instructions or removal. However, actions like reselling the goods, making alterations, or using them in a way that deprives the seller of their ability to cure the defect or reclaim the goods can lead to a finding of acceptance. This is particularly relevant in situations where the seller might have a right to cure the non-conformity, and the buyer’s actions prevent such an opportunity. Therefore, a buyer who rightfully rejects goods but then treats them as their own, thereby impairing the seller’s rights, effectively waives their rejection and accepts the goods.
Incorrect
Under Oklahoma’s Uniform Commercial Code (UCC) Article 2, when a buyer rejects goods due to a non-conformity, and the seller has not been notified of the rejection, the buyer’s actions can impact their rights. Specifically, if a buyer retains possession of goods that they have rightfully rejected, and subsequently exercises dominion over those goods in a manner inconsistent with the seller’s ownership or the seller’s right to reclaim them, the buyer may be deemed to have accepted the goods. This principle is rooted in the concept that a buyer’s conduct can signify acceptance, even if they have formally rejected the goods. The UCC distinguishes between rightful rejection and the subsequent duties of the buyer. Merely holding onto rejected goods is generally permissible for a reasonable time to allow for the seller’s instructions or removal. However, actions like reselling the goods, making alterations, or using them in a way that deprives the seller of their ability to cure the defect or reclaim the goods can lead to a finding of acceptance. This is particularly relevant in situations where the seller might have a right to cure the non-conformity, and the buyer’s actions prevent such an opportunity. Therefore, a buyer who rightfully rejects goods but then treats them as their own, thereby impairing the seller’s rights, effectively waives their rejection and accepts the goods.
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                        Question 17 of 30
17. Question
A wholesale distributor in Tulsa, Oklahoma, contracted with a manufacturing plant in Wichita, Kansas, for the immediate delivery of 500 specialized machine components. The contract stipulated that delivery was to occur on June 1st, and the components must meet precise engineering specifications, including a specific tensile strength of at least \(450\) MPa. Upon arrival on June 2nd, the Tulsa distributor inspects the components and discovers that while they were manufactured on May 28th, their average tensile strength is \(435\) MPa, falling short of the contractual requirement. The distributor immediately notifies the Kansas manufacturer of the non-conformity and the late delivery. The manufacturer, believing they had a reasonable basis to assume the slightly lower tensile strength would be acceptable given the short timeframe for production, requests an additional five days to produce and deliver conforming components. Under Oklahoma’s UCC Article 2, what is the most accurate assessment of the manufacturer’s ability to cure this defect?
Correct
Under Oklahoma’s adoption of the Uniform Commercial Code (UCC) Article 2, the concept of “perfect tender” dictates that a buyer has the right to inspect goods and reject them if they fail in any respect to conform to the contract. However, this rule is subject to several important exceptions. One significant exception is found in UCC § 2-508, which allows a seller, after receiving notice of rejection and having had “a further reasonable time” to substitute a conforming tender, to cure the defect. This cure provision is particularly relevant when the time for performance has not yet expired, or when the seller had reasonable grounds to believe the nonconforming tender would be acceptable. The purpose of the cure provision is to prevent the harshness of the perfect tender rule and to encourage the completion of contracts, promoting commercial reasonableness. If the seller fails to cure within the allowed time or if the defect is substantial and cannot be reasonably cured, the buyer’s right to reject remains. The scenario presented involves a seller delivering non-conforming goods after the contract’s delivery date. While the buyer can generally reject for non-conformity, the seller’s ability to cure is contingent on having reasonable grounds to believe the tender would be acceptable and having a further reasonable time to make a conforming tender. Since the delivery was late and the goods were non-conforming, the seller’s opportunity to cure depends on whether they had a reasonable belief that the late tender of non-conforming goods would be acceptable, and if they can now, within a reasonable time, provide conforming goods. The UCC aims to balance the buyer’s right to conformity with the seller’s opportunity to correct errors, thereby fostering efficient commerce.
Incorrect
Under Oklahoma’s adoption of the Uniform Commercial Code (UCC) Article 2, the concept of “perfect tender” dictates that a buyer has the right to inspect goods and reject them if they fail in any respect to conform to the contract. However, this rule is subject to several important exceptions. One significant exception is found in UCC § 2-508, which allows a seller, after receiving notice of rejection and having had “a further reasonable time” to substitute a conforming tender, to cure the defect. This cure provision is particularly relevant when the time for performance has not yet expired, or when the seller had reasonable grounds to believe the nonconforming tender would be acceptable. The purpose of the cure provision is to prevent the harshness of the perfect tender rule and to encourage the completion of contracts, promoting commercial reasonableness. If the seller fails to cure within the allowed time or if the defect is substantial and cannot be reasonably cured, the buyer’s right to reject remains. The scenario presented involves a seller delivering non-conforming goods after the contract’s delivery date. While the buyer can generally reject for non-conformity, the seller’s ability to cure is contingent on having reasonable grounds to believe the tender would be acceptable and having a further reasonable time to make a conforming tender. Since the delivery was late and the goods were non-conforming, the seller’s opportunity to cure depends on whether they had a reasonable belief that the late tender of non-conforming goods would be acceptable, and if they can now, within a reasonable time, provide conforming goods. The UCC aims to balance the buyer’s right to conformity with the seller’s opportunity to correct errors, thereby fostering efficient commerce.
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                        Question 18 of 30
18. Question
Following a delivery of custom-made industrial components to a manufacturing facility in Tulsa, Oklahoma, the buyer, “Precision Parts Inc.,” rightfully rejected the entire shipment due to significant deviations from the agreed-upon specifications, which rendered the components unusable for their intended purpose. Precision Parts Inc. had already made a substantial advance payment to the seller, “Alloy Fabricators LLC,” and incurred costs for initial inspection and temporary storage of the rejected goods. Considering the provisions of Oklahoma’s UCC Article 2, what specific right does Precision Parts Inc. possess regarding the rejected components to recoup its advance payment and inspection costs?
Correct
Under Oklahoma’s Uniform Commercial Code (UCC) Article 2, when a buyer rejects goods, they generally have the right to exercise certain rights concerning those goods. Specifically, if the buyer has a security interest in goods rightfully rejected, they can resell those goods in a commercially reasonable manner. This security interest arises from any payments made to the seller or expenses incurred in their inspection, receipt, custody, and care. The buyer acts as a secured party with respect to these amounts. The resale must be conducted in good faith and in a commercially reasonable manner. This includes following any commercially reasonable methods of disposition. The proceeds from the resale are applied first to the expenses of the resale and then to the satisfaction of the debt secured. Any remaining balance is then to be held for the benefit of the seller. This right of resale is a crucial remedy for a buyer who has rightfully rejected non-conforming goods, allowing them to recoup their expenses while awaiting further instructions or resolution from the seller. This provision aims to balance the rights of both buyer and seller in situations where a contract for sale has gone awry due to non-conforming goods.
Incorrect
Under Oklahoma’s Uniform Commercial Code (UCC) Article 2, when a buyer rejects goods, they generally have the right to exercise certain rights concerning those goods. Specifically, if the buyer has a security interest in goods rightfully rejected, they can resell those goods in a commercially reasonable manner. This security interest arises from any payments made to the seller or expenses incurred in their inspection, receipt, custody, and care. The buyer acts as a secured party with respect to these amounts. The resale must be conducted in good faith and in a commercially reasonable manner. This includes following any commercially reasonable methods of disposition. The proceeds from the resale are applied first to the expenses of the resale and then to the satisfaction of the debt secured. Any remaining balance is then to be held for the benefit of the seller. This right of resale is a crucial remedy for a buyer who has rightfully rejected non-conforming goods, allowing them to recoup their expenses while awaiting further instructions or resolution from the seller. This provision aims to balance the rights of both buyer and seller in situations where a contract for sale has gone awry due to non-conforming goods.
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                        Question 19 of 30
19. Question
Consider a scenario where a wholesale distributor in Tulsa, Oklahoma, ordered a specialized shipment of custom-engineered machine parts from a manufacturer based in Texas. Upon delivery, the distributor discovered that a significant portion of the parts did not meet the precise technical specifications outlined in the contract, rendering them unusable for their intended purpose. The distributor, acting within a reasonable time, properly rejected the non-conforming goods. What is the distributor’s primary legal recourse under Oklahoma’s UCC Article 2 regarding the rejected parts to recover their initial outlay for those specific components?
Correct
In Oklahoma, when a buyer rightfully rejects goods under UCC Article 2, they generally have the right to resell those goods to recover the purchase price paid for them, provided certain conditions are met. This right is outlined in Oklahoma Statutes Title 12A, Section 2-711(3), which is the Uniform Commercial Code provision regarding the buyer’s remedies. Specifically, after rejection, the buyer holds the goods as a security interest for any payments made on their price and any expenses reasonably incurred in their inspection, receipt, transportation, care, and custody. The buyer may then resell the goods in a commercially reasonable manner. This resale can be at public or private sale. The buyer must act in good faith and in a commercially reasonable manner. The proceeds from the resale are applied first to the expenses of the resale and then to the satisfaction of any debt owed to the buyer by the seller. Any surplus is then returned to the seller. The seller is not entitled to any profit made on the resale. The buyer’s right to resell is a remedy to mitigate their own losses when the seller has breached the contract by delivering non-conforming goods that were rightfully rejected. This right is crucial for buyers to recoup their investment when faced with a seller’s non-performance.
Incorrect
In Oklahoma, when a buyer rightfully rejects goods under UCC Article 2, they generally have the right to resell those goods to recover the purchase price paid for them, provided certain conditions are met. This right is outlined in Oklahoma Statutes Title 12A, Section 2-711(3), which is the Uniform Commercial Code provision regarding the buyer’s remedies. Specifically, after rejection, the buyer holds the goods as a security interest for any payments made on their price and any expenses reasonably incurred in their inspection, receipt, transportation, care, and custody. The buyer may then resell the goods in a commercially reasonable manner. This resale can be at public or private sale. The buyer must act in good faith and in a commercially reasonable manner. The proceeds from the resale are applied first to the expenses of the resale and then to the satisfaction of any debt owed to the buyer by the seller. Any surplus is then returned to the seller. The seller is not entitled to any profit made on the resale. The buyer’s right to resell is a remedy to mitigate their own losses when the seller has breached the contract by delivering non-conforming goods that were rightfully rejected. This right is crucial for buyers to recoup their investment when faced with a seller’s non-performance.
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                        Question 20 of 30
20. Question
Prairie Petrochemical, an Oklahoma-based supplier, contracted with Flint Hills Energy, also in Oklahoma, to deliver a specialized catalyst. Upon delivery, Flint Hills Energy noted a minor discrepancy in the catalyst’s particle size distribution, which did not substantially impair the overall value of the catalyst for its intended industrial processes. Prairie Petrochemical, within the contractually agreed-upon delivery window and prior to the final acceptance date, offered to replace the entire batch with a new shipment that perfectly met the particle size specifications. Flint Hills Energy, however, refused this offer, insisting on canceling the entire contract and demanding a full refund, asserting that the initial non-conformity constituted a material breach. What is the legal consequence of Flint Hills Energy’s refusal of Prairie Petrochemical’s offered cure under Oklahoma UCC Article 2?
Correct
Under Oklahoma’s adoption of the Uniform Commercial Code (UCC) Article 2, when a buyer rejects goods due to a non-conformity that is not a substantial impairment of the value of the entire contract, and the seller has a right to cure the defect, the buyer’s options are limited. If the seller makes a timely proper replacement or repair, the buyer generally cannot revoke acceptance or reject the goods unless the non-conformity, even after cure, substantially impairs the value of the contract. The right to cure is a significant protection for sellers, allowing them to fix minor breaches. Oklahoma law, specifically in the context of UCC Article 2, emphasizes the seller’s opportunity to conform the goods to the contract. If the buyer refuses a valid cure, they may be deemed to have accepted the goods or may be liable for breach themselves. The scenario presented involves a rejection of goods that do not substantially impair the entire contract, and the seller’s ability to cure. In such situations, the buyer’s refusal to accept a proper cure, which would have rectified the non-conformity without substantially impairing the contract’s value, would be improper. The buyer’s continued rejection, after a proper cure attempt that would have met the contract’s essential requirements, would not be justified under Oklahoma UCC Article 2. Therefore, the buyer would be in breach by refusing the conforming tender after the seller’s successful cure.
Incorrect
Under Oklahoma’s adoption of the Uniform Commercial Code (UCC) Article 2, when a buyer rejects goods due to a non-conformity that is not a substantial impairment of the value of the entire contract, and the seller has a right to cure the defect, the buyer’s options are limited. If the seller makes a timely proper replacement or repair, the buyer generally cannot revoke acceptance or reject the goods unless the non-conformity, even after cure, substantially impairs the value of the contract. The right to cure is a significant protection for sellers, allowing them to fix minor breaches. Oklahoma law, specifically in the context of UCC Article 2, emphasizes the seller’s opportunity to conform the goods to the contract. If the buyer refuses a valid cure, they may be deemed to have accepted the goods or may be liable for breach themselves. The scenario presented involves a rejection of goods that do not substantially impair the entire contract, and the seller’s ability to cure. In such situations, the buyer’s refusal to accept a proper cure, which would have rectified the non-conformity without substantially impairing the contract’s value, would be improper. The buyer’s continued rejection, after a proper cure attempt that would have met the contract’s essential requirements, would not be justified under Oklahoma UCC Article 2. Therefore, the buyer would be in breach by refusing the conforming tender after the seller’s successful cure.
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                        Question 21 of 30
21. Question
A manufacturing firm in Oklahoma City contracted with a supplier in Dallas, Texas, for a shipment of custom-machined metal components to be delivered by June 1st. The contract specified that the components must meet precise tensile strength requirements. Upon receiving the shipment on May 28th, the Oklahoma City firm’s quality control department discovered that a small percentage of the components, approximately 5%, fell just below the specified tensile strength due to a minor calibration error during the final machining process. The supplier, unaware of this specific calibration issue, had a standard quality assurance process in place that they reasonably believed ensured compliance. The Oklahoma City firm immediately rejected the entire shipment based on the non-conforming tensile strength. Under Oklahoma UCC Article 2, what is the most likely legal consequence regarding the supplier’s ability to rectify the situation, assuming the supplier acts promptly after receiving notice of the rejection?
Correct
Under Oklahoma’s adoption of the Uniform Commercial Code (UCC) Article 2, the concept of “perfect tender” is a fundamental principle governing the buyer’s right to reject goods. However, this right is not absolute and is subject to several exceptions and limitations. One significant limitation is found in UCC § 2-508, which allows a seller, after their time for performance has expired, to cure a non-conforming tender if the seller had reasonable grounds to believe that the tender would be acceptable and seasonably notifies the buyer of their intention to cure. This cure provision is particularly important when the buyer rejects goods for a defect that the seller could reasonably fix within a reasonable time after the contract’s original delivery date. For instance, if a buyer rejects a shipment of specialized widgets from a manufacturer in Tulsa due to a minor, correctable manufacturing flaw that the seller reasonably believed would not cause rejection, and the contract allowed for delivery by a specific date, the seller may still have the opportunity to replace or repair the defective widgets if they act promptly after notification of the rejection. The seller must cure within the contract time or, if the time for performance has not yet expired, within a reasonable time. If the seller had reasonable grounds to believe the tender was conforming, they have an extended right to cure even beyond the contract time. The key is the seller’s good faith belief in the conformity of the goods and their prompt action upon learning of the non-conformity.
Incorrect
Under Oklahoma’s adoption of the Uniform Commercial Code (UCC) Article 2, the concept of “perfect tender” is a fundamental principle governing the buyer’s right to reject goods. However, this right is not absolute and is subject to several exceptions and limitations. One significant limitation is found in UCC § 2-508, which allows a seller, after their time for performance has expired, to cure a non-conforming tender if the seller had reasonable grounds to believe that the tender would be acceptable and seasonably notifies the buyer of their intention to cure. This cure provision is particularly important when the buyer rejects goods for a defect that the seller could reasonably fix within a reasonable time after the contract’s original delivery date. For instance, if a buyer rejects a shipment of specialized widgets from a manufacturer in Tulsa due to a minor, correctable manufacturing flaw that the seller reasonably believed would not cause rejection, and the contract allowed for delivery by a specific date, the seller may still have the opportunity to replace or repair the defective widgets if they act promptly after notification of the rejection. The seller must cure within the contract time or, if the time for performance has not yet expired, within a reasonable time. If the seller had reasonable grounds to believe the tender was conforming, they have an extended right to cure even beyond the contract time. The key is the seller’s good faith belief in the conformity of the goods and their prompt action upon learning of the non-conformity.
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                        Question 22 of 30
22. Question
A manufacturing firm in Tulsa, Oklahoma, contracted with a supplier in Wichita, Kansas, for the delivery of 500 specialized alloy bolts, designated as “Grade X,” by the end of the month. Upon receiving the shipment, the Tulsa firm’s quality control discovered that 50 of the bolts, while conforming to all dimensional specifications, were inadvertently coated with a slightly different, though functionally equivalent, anti-corrosion agent than specified. The contract explicitly stated “Grade X bolts with proprietary anti-corrosion coating Z.” The supplier, upon notification of this discrepancy, immediately realized the error was due to a temporary mix-up in their coating facility but had no other stock of Grade X bolts readily available. The delivery date was the last day of the month. Considering Oklahoma’s UCC Article 2 provisions, what is the supplier’s most likely recourse if they can secure and apply the correct coating to the entire batch of 500 bolts within three days of the Tulsa firm’s rejection notification?
Correct
Under Oklahoma’s Uniform Commercial Code (UCC) Article 2, specifically concerning the sale of goods, the concept of “perfect tender” dictates that a buyer can reject goods if they fail in any respect to conform to the contract. However, this rule is subject to several important exceptions and limitations. One such exception is the “cure” doctrine, found in Oklahoma UCC § 2-508. This provision allows a seller, who has made an improper tender, to have an opportunity to cure the defect if the time for performance has not yet expired. If the seller had reasonable grounds to believe the non-conforming tender would be acceptable to the buyer, either with or without a money allowance, the seller may have a further reasonable time to substitute a conforming tender. This is particularly relevant when the seller has made a shipment under a contract that allows for replacement of non-conforming goods, or if the seller had a prior course of dealing that suggested such a tender might be acceptable. The seller’s ability to cure is crucial for avoiding breach of contract when a minor non-conformity is discovered. For instance, if a contract specifies delivery of 100 widgets by Friday, and the seller delivers 98 widgets on Thursday, and the buyer rejects them, the seller may have a right to cure by delivering the remaining 2 widgets or replacing the 98 with 100 conforming widgets within the contract’s delivery timeframe, provided the seller had reasonable grounds to believe the initial tender would be accepted. The buyer’s rejection of a non-conforming tender does not automatically terminate the contract if the seller can cure the defect within the contractually agreed-upon performance period.
Incorrect
Under Oklahoma’s Uniform Commercial Code (UCC) Article 2, specifically concerning the sale of goods, the concept of “perfect tender” dictates that a buyer can reject goods if they fail in any respect to conform to the contract. However, this rule is subject to several important exceptions and limitations. One such exception is the “cure” doctrine, found in Oklahoma UCC § 2-508. This provision allows a seller, who has made an improper tender, to have an opportunity to cure the defect if the time for performance has not yet expired. If the seller had reasonable grounds to believe the non-conforming tender would be acceptable to the buyer, either with or without a money allowance, the seller may have a further reasonable time to substitute a conforming tender. This is particularly relevant when the seller has made a shipment under a contract that allows for replacement of non-conforming goods, or if the seller had a prior course of dealing that suggested such a tender might be acceptable. The seller’s ability to cure is crucial for avoiding breach of contract when a minor non-conformity is discovered. For instance, if a contract specifies delivery of 100 widgets by Friday, and the seller delivers 98 widgets on Thursday, and the buyer rejects them, the seller may have a right to cure by delivering the remaining 2 widgets or replacing the 98 with 100 conforming widgets within the contract’s delivery timeframe, provided the seller had reasonable grounds to believe the initial tender would be accepted. The buyer’s rejection of a non-conforming tender does not automatically terminate the contract if the seller can cure the defect within the contractually agreed-upon performance period.
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                        Question 23 of 30
23. Question
Prairie Provisions Inc., an agricultural equipment supplier based in Oklahoma, entered into a contract with Lone Star Tractors LLC, a Texas-based distributor, for the sale of fifty specialized tractors. The contract stipulated that the tractors must have a minimum of 150 horsepower and be delivered by October 1st. Upon inspection of the initial shipment, Lone Star Tractors discovered that twenty of the tractors had only 140 horsepower. Prairie Provisions Inc. promptly notified Lone Star Tractors that they had identified the error and intended to ship twenty replacement tractors meeting the 150 horsepower requirement, ensuring they would arrive by the October 1st deadline. Under Oklahoma’s adoption of the Uniform Commercial Code (UCC) Article 2, what is the legal status of Lone Star Tractors’ ability to reject the entire shipment at the moment they discover the initial non-conformity, given Prairie Provisions Inc.’s timely notification of intent to cure?
Correct
The scenario presented involves a contract for the sale of goods between a merchant in Oklahoma and a buyer in Texas. The Uniform Commercial Code (UCC), adopted in Oklahoma as Title 12A of the Oklahoma Statutes, governs such transactions. Specifically, Article 2 of the UCC addresses the sale of goods. When a contract for the sale of goods is entered into, and the seller is a merchant, the UCC imposes certain obligations. In this case, the seller, “Prairie Provisions Inc.,” is a merchant dealing in agricultural equipment. The buyer, “Lone Star Tractors LLC,” has placed an order. The core issue revolves around the seller’s obligation to provide conforming goods. The UCC defines “conforming goods” as those that meet the contract’s specifications. If the goods delivered do not conform to the contract, the buyer generally has the right to reject them. However, the UCC also provides for cure. Under UCC Section 2-508, if the time for performance has not yet expired, and the seller notifies the buyer of their intention to cure, the seller may make a conforming delivery within the contract time. In this situation, Prairie Provisions Inc. delivered tractors that did not meet the agreed-upon horsepower specifications. The contract deadline for delivery is October 1st. The seller discovered the non-conformity after shipment and notified the buyer of their intent to replace the non-conforming tractors with conforming ones by the contract deadline. This notification and intent to cure, within the contract period, allows the seller the opportunity to provide conforming goods. Therefore, the buyer cannot immediately reject the goods solely based on the initial non-conformity if the seller properly exercises their right to cure within the contract time. The buyer’s right to reject would arise if the seller fails to cure by the deadline or if the contract explicitly disallows any non-conformity, even if curable. Without such an explicit exclusion, the seller’s ability to cure is a significant factor.
Incorrect
The scenario presented involves a contract for the sale of goods between a merchant in Oklahoma and a buyer in Texas. The Uniform Commercial Code (UCC), adopted in Oklahoma as Title 12A of the Oklahoma Statutes, governs such transactions. Specifically, Article 2 of the UCC addresses the sale of goods. When a contract for the sale of goods is entered into, and the seller is a merchant, the UCC imposes certain obligations. In this case, the seller, “Prairie Provisions Inc.,” is a merchant dealing in agricultural equipment. The buyer, “Lone Star Tractors LLC,” has placed an order. The core issue revolves around the seller’s obligation to provide conforming goods. The UCC defines “conforming goods” as those that meet the contract’s specifications. If the goods delivered do not conform to the contract, the buyer generally has the right to reject them. However, the UCC also provides for cure. Under UCC Section 2-508, if the time for performance has not yet expired, and the seller notifies the buyer of their intention to cure, the seller may make a conforming delivery within the contract time. In this situation, Prairie Provisions Inc. delivered tractors that did not meet the agreed-upon horsepower specifications. The contract deadline for delivery is October 1st. The seller discovered the non-conformity after shipment and notified the buyer of their intent to replace the non-conforming tractors with conforming ones by the contract deadline. This notification and intent to cure, within the contract period, allows the seller the opportunity to provide conforming goods. Therefore, the buyer cannot immediately reject the goods solely based on the initial non-conformity if the seller properly exercises their right to cure within the contract time. The buyer’s right to reject would arise if the seller fails to cure by the deadline or if the contract explicitly disallows any non-conformity, even if curable. Without such an explicit exclusion, the seller’s ability to cure is a significant factor.
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                        Question 24 of 30
24. Question
AgriCorp, a merchant based in Oklahoma specializing in agricultural equipment, entered into a contract with Ranchers’ Supply, a Texas-based retailer, for the purchase of 100 specialized irrigation pumps. The written agreement, however, conspicuously omitted any clause specifying the location for delivery of the pumps. Both parties are merchants. Considering the provisions of the Uniform Commercial Code as adopted in Oklahoma, where is the presumptive place of delivery for these irrigation pumps?
Correct
The scenario involves a contract for the sale of goods between a merchant in Oklahoma and a buyer in Texas. The Uniform Commercial Code (UCC) governs such transactions. Specifically, Article 2 of the UCC addresses the sale of goods. When a contract for the sale of goods is entered into, and there is no specific agreement regarding the place of delivery, UCC § 2-308 provides default rules. In the absence of any agreement, the UCC presumes that the place of delivery is the seller’s place of business. If the seller has no place of business, then it is the seller’s residence. In this case, “AgriCorp,” the seller, is a merchant with a place of business located in Oklahoma. “Ranchers’ Supply,” the buyer, is located in Texas. The contract does not specify a place of delivery. Therefore, under UCC § 2-308, the default place of delivery is AgriCorp’s place of business in Oklahoma. This principle is crucial for determining obligations such as when risk of loss passes and where performance is due. The UCC aims to provide certainty and predictability in commercial transactions, especially when parties have not explicitly addressed all terms.
Incorrect
The scenario involves a contract for the sale of goods between a merchant in Oklahoma and a buyer in Texas. The Uniform Commercial Code (UCC) governs such transactions. Specifically, Article 2 of the UCC addresses the sale of goods. When a contract for the sale of goods is entered into, and there is no specific agreement regarding the place of delivery, UCC § 2-308 provides default rules. In the absence of any agreement, the UCC presumes that the place of delivery is the seller’s place of business. If the seller has no place of business, then it is the seller’s residence. In this case, “AgriCorp,” the seller, is a merchant with a place of business located in Oklahoma. “Ranchers’ Supply,” the buyer, is located in Texas. The contract does not specify a place of delivery. Therefore, under UCC § 2-308, the default place of delivery is AgriCorp’s place of business in Oklahoma. This principle is crucial for determining obligations such as when risk of loss passes and where performance is due. The UCC aims to provide certainty and predictability in commercial transactions, especially when parties have not explicitly addressed all terms.
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                        Question 25 of 30
25. Question
Ms. Anya Sharma, operating a farm in Oklahoma, contracted with AgriTech Solutions Inc. for a shipment of advanced agricultural sensors. Upon delivery, Ms. Sharma immediately placed the sensors into active use, integrating them into her farm’s automated irrigation system. She continued to utilize the sensors for two full weeks, a period that encompassed a critical phase of her planting season, before she contacted AgriTech Solutions Inc. to declare the sensors non-conforming due to a slight calibration variance that did not materially affect their primary function. What is the legal consequence of Ms. Sharma’s actions under Oklahoma’s Uniform Commercial Code Article 2 regarding her right to reject the sensors?
Correct
Under Oklahoma’s Uniform Commercial Code (UCC) Article 2, a buyer’s right to reject goods is a crucial remedy when a seller breaches the contract by delivering non-conforming goods. Rejection must occur within a reasonable time after delivery and tender, and the buyer must seasonably notify the seller of the rejection. If the buyer fails to do so, they are deemed to have accepted the goods. Acceptance of goods, as defined in UCC § 2-606, occurs when the buyer, after a reasonable opportunity to inspect the goods, signifies to the seller that the goods are conforming or that they will take them despite their non-conformity, or does any act inconsistent with the seller’s ownership. Furthermore, acceptance also occurs if the buyer fails to make an effective rejection under UCC § 2-602. In the scenario provided, Ms. Anya Sharma, after receiving the specialized agricultural sensors from AgriTech Solutions Inc., continued to use them in her Oklahoma farming operations for two weeks, including during a critical planting season, before attempting to reject them due to a minor calibration issue. This prolonged use, especially after having a reasonable opportunity to inspect and discover the defect, constitutes an act inconsistent with the seller’s ownership and signifies acceptance of the goods. The continued use for a substantial period, far beyond what is necessary for inspection, negates her right to reject. Oklahoma law, mirroring the UCC, emphasizes that acceptance is final unless revoked under specific grounds like a substantial impairment of value that was not discoverable upon reasonable inspection, which is not indicated here. Therefore, Ms. Sharma’s actions lead to acceptance.
Incorrect
Under Oklahoma’s Uniform Commercial Code (UCC) Article 2, a buyer’s right to reject goods is a crucial remedy when a seller breaches the contract by delivering non-conforming goods. Rejection must occur within a reasonable time after delivery and tender, and the buyer must seasonably notify the seller of the rejection. If the buyer fails to do so, they are deemed to have accepted the goods. Acceptance of goods, as defined in UCC § 2-606, occurs when the buyer, after a reasonable opportunity to inspect the goods, signifies to the seller that the goods are conforming or that they will take them despite their non-conformity, or does any act inconsistent with the seller’s ownership. Furthermore, acceptance also occurs if the buyer fails to make an effective rejection under UCC § 2-602. In the scenario provided, Ms. Anya Sharma, after receiving the specialized agricultural sensors from AgriTech Solutions Inc., continued to use them in her Oklahoma farming operations for two weeks, including during a critical planting season, before attempting to reject them due to a minor calibration issue. This prolonged use, especially after having a reasonable opportunity to inspect and discover the defect, constitutes an act inconsistent with the seller’s ownership and signifies acceptance of the goods. The continued use for a substantial period, far beyond what is necessary for inspection, negates her right to reject. Oklahoma law, mirroring the UCC, emphasizes that acceptance is final unless revoked under specific grounds like a substantial impairment of value that was not discoverable upon reasonable inspection, which is not indicated here. Therefore, Ms. Sharma’s actions lead to acceptance.
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                        Question 26 of 30
26. Question
An Oklahoma-based agricultural equipment supplier, “Prairie Plows Inc.”, enters into a contract with a rancher in Amarillo, Texas, “Dusty Boots Ranch”, for the sale of a specialized harvesting machine. The contract explicitly states that Prairie Plows Inc. will deliver the machine to a designated common carrier in Tulsa, Oklahoma, for shipment to Amarillo. Crucially, the contract includes a clause stipulating that Prairie Plows Inc. “retains full title and possession of the goods until they are received and accepted by Dusty Boots Ranch at their premises in Amarillo, Texas.” En route to Texas, the transport vehicle carrying the machine is involved in an accident in Kansas, and the machine is destroyed. Under the Uniform Commercial Code as adopted in Oklahoma, where does the risk of loss primarily lie?
Correct
The scenario describes a contract for the sale of goods between a merchant in Oklahoma and a buyer in Texas. The contract specifies delivery of goods to a common carrier in Oklahoma, and the risk of loss passes to the buyer upon delivery to the carrier, as per UCC § 2-509(1)(a). However, the contract also contains a specific clause stating that the seller retains “full title and possession” of the goods until they are “received and accepted” by the buyer at their Texas location. This explicit contractual term overrides the default rules of UCC § 2-509 regarding the passing of risk of loss. Oklahoma law, as adopted through UCC Article 2, generally permits parties to modify the rules concerning the passing of risk of loss through their agreement. Therefore, despite the delivery to the carrier in Oklahoma, the risk of loss remains with the seller in Oklahoma because the contract explicitly conditions the transfer of risk upon the buyer’s receipt and acceptance in Texas. This contractual stipulation is paramount in determining when the risk of loss shifts.
Incorrect
The scenario describes a contract for the sale of goods between a merchant in Oklahoma and a buyer in Texas. The contract specifies delivery of goods to a common carrier in Oklahoma, and the risk of loss passes to the buyer upon delivery to the carrier, as per UCC § 2-509(1)(a). However, the contract also contains a specific clause stating that the seller retains “full title and possession” of the goods until they are “received and accepted” by the buyer at their Texas location. This explicit contractual term overrides the default rules of UCC § 2-509 regarding the passing of risk of loss. Oklahoma law, as adopted through UCC Article 2, generally permits parties to modify the rules concerning the passing of risk of loss through their agreement. Therefore, despite the delivery to the carrier in Oklahoma, the risk of loss remains with the seller in Oklahoma because the contract explicitly conditions the transfer of risk upon the buyer’s receipt and acceptance in Texas. This contractual stipulation is paramount in determining when the risk of loss shifts.
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                        Question 27 of 30
27. Question
Agri-Tech Solutions of Oklahoma entered into a contract with Mr. Abernathy, a farmer in western Oklahoma, for the sale of specialized agricultural equipment. The contract explicitly stated a delivery date of April 1st. Upon receiving the equipment on April 15th, Mr. Abernathy immediately notified Agri-Tech Solutions that he was canceling the contract due to the late delivery, explaining that the delay had caused him to miss a critical window for planting his crops. Agri-Tech Solutions argued that the equipment was still functional and that the delay was minor. Under Oklahoma’s adoption of the Uniform Commercial Code, what is the most likely legal outcome of Mr. Abernathy’s cancellation?
Correct
The Uniform Commercial Code (UCC) Article 2 governs contracts for the sale of goods. When a buyer rejects goods due to a non-conformity, and the seller has not cured the defect or the time for cure has expired, the buyer generally has the right to cancel the contract. Oklahoma has adopted the UCC, so these principles apply within the state. In this scenario, the delivery of the specialized agricultural equipment was late, which constitutes a material breach of the contract. The contract specified a delivery date of April 1st. The equipment was delivered on April 15th. This delay, especially for agricultural equipment where timing is often critical for planting or harvesting seasons, is a significant deviation from the agreed-upon terms. The buyer, Mr. Abernathy, notified the seller, Agri-Tech Solutions, of the non-conformity (late delivery) and indicated his intent to cancel. Under UCC § 2-602, rejection must occur within a reasonable time after delivery or tender. Mr. Abernathy’s prompt notification after receiving the equipment on April 15th, stating his intention to cancel due to the lateness, is a valid rejection. Furthermore, UCC § 2-608 addresses revocation of acceptance. While revocation of acceptance is generally more difficult than rejection, it is possible if the non-conformity substantially impairs the value of the goods to the buyer. The late delivery, impacting the planting season, clearly substantially impairs the value of the agricultural equipment to Mr. Abernathy. Since Agri-Tech Solutions did not have a prior agreement with Mr. Abernathy allowing for late delivery or a cure period beyond the initial delivery date, and the delay has significantly impacted the buyer’s ability to use the equipment for its intended purpose during the crucial planting season, Mr. Abernathy is within his rights to cancel the contract and seek remedies for the breach. The core issue is the seller’s failure to meet a material term of the contract, which is the delivery date, and the resulting substantial impairment of the goods’ value to the buyer.
Incorrect
The Uniform Commercial Code (UCC) Article 2 governs contracts for the sale of goods. When a buyer rejects goods due to a non-conformity, and the seller has not cured the defect or the time for cure has expired, the buyer generally has the right to cancel the contract. Oklahoma has adopted the UCC, so these principles apply within the state. In this scenario, the delivery of the specialized agricultural equipment was late, which constitutes a material breach of the contract. The contract specified a delivery date of April 1st. The equipment was delivered on April 15th. This delay, especially for agricultural equipment where timing is often critical for planting or harvesting seasons, is a significant deviation from the agreed-upon terms. The buyer, Mr. Abernathy, notified the seller, Agri-Tech Solutions, of the non-conformity (late delivery) and indicated his intent to cancel. Under UCC § 2-602, rejection must occur within a reasonable time after delivery or tender. Mr. Abernathy’s prompt notification after receiving the equipment on April 15th, stating his intention to cancel due to the lateness, is a valid rejection. Furthermore, UCC § 2-608 addresses revocation of acceptance. While revocation of acceptance is generally more difficult than rejection, it is possible if the non-conformity substantially impairs the value of the goods to the buyer. The late delivery, impacting the planting season, clearly substantially impairs the value of the agricultural equipment to Mr. Abernathy. Since Agri-Tech Solutions did not have a prior agreement with Mr. Abernathy allowing for late delivery or a cure period beyond the initial delivery date, and the delay has significantly impacted the buyer’s ability to use the equipment for its intended purpose during the crucial planting season, Mr. Abernathy is within his rights to cancel the contract and seek remedies for the breach. The core issue is the seller’s failure to meet a material term of the contract, which is the delivery date, and the resulting substantial impairment of the goods’ value to the buyer.
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                        Question 28 of 30
28. Question
Rustic Roots Farm, an agricultural producer in Oklahoma, entered into a written consignment agreement with Prairie Harvest Produce, a distributor, for the sale of a substantial quantity of corn, with the total value exceeding $500. The agreement stipulated a specific price per bushel. Later, during a telephone conversation, Mr. Henderson, representing Prairie Harvest Produce, orally agreed to accept a lower price per bushel for the corn due to unforeseen market fluctuations. However, no written confirmation of this price reduction was ever exchanged. When the time for payment arrived, Rustic Roots Farm demanded the original, higher price per bushel, asserting that the oral modification was invalid. Prairie Harvest Produce argued that the oral agreement to reduce the price was binding. Under Oklahoma’s adoption of the Uniform Commercial Code Article 2, what is the enforceability of the oral modification regarding the corn price?
Correct
The core issue here is the enforceability of an oral modification to a contract for the sale of goods, specifically a consignment agreement for agricultural produce. Under the Uniform Commercial Code (UCC) as adopted in Oklahoma, specifically Article 2, certain contracts for the sale of goods priced at $500 or more must be in writing to be enforceable. This is known as the Statute of Frauds. However, the UCC also allows for oral modifications to existing contracts, even those that would normally require a writing, unless the modification itself falls within the Statute of Frauds. In this scenario, the original consignment agreement between Prairie Harvest Produce and Rustic Roots Farm was for a quantity of wheat exceeding $500, thus it was subject to the Statute of Frauds and was properly in writing. The subsequent oral agreement by Mr. Henderson to accept a reduced price for the corn, which was also a sale of goods exceeding $500, constitutes a modification of the original terms. Oklahoma’s UCC, like most states, has specific provisions addressing modifications. UCC § 2-209(3) states that the requirements of the statute of frauds section of this Article (§ 2-201) apply to the enforcement of a modification or rescission of a contract within its provisions. Therefore, if the oral modification alters the contract in such a way that the modified contract would have been subject to the statute of frauds, the modification must also be in writing to be enforceable. The oral agreement to accept a lower price for the corn, even though it’s a reduction, still pertains to a sale of goods that, in its original form, was subject to the Statute of Frauds. The key is whether the *modification itself* changes the nature of the contract such that it would require a writing. In this case, the modification is to the price term of a sale of goods that was already over $500. While UCC § 2-209(1) permits oral modifications, UCC § 2-209(3) brings the Statute of Frauds back into play for such modifications if the modified contract falls within its scope. Since the sale of corn was a transaction for goods priced at $500 or more, and the oral modification altered a key term (price) of this transaction, the modification itself must satisfy the Statute of Frauds. As there is no writing evidencing this oral modification, it is not enforceable. Therefore, Rustic Roots Farm can still demand the originally agreed-upon price for the corn.
Incorrect
The core issue here is the enforceability of an oral modification to a contract for the sale of goods, specifically a consignment agreement for agricultural produce. Under the Uniform Commercial Code (UCC) as adopted in Oklahoma, specifically Article 2, certain contracts for the sale of goods priced at $500 or more must be in writing to be enforceable. This is known as the Statute of Frauds. However, the UCC also allows for oral modifications to existing contracts, even those that would normally require a writing, unless the modification itself falls within the Statute of Frauds. In this scenario, the original consignment agreement between Prairie Harvest Produce and Rustic Roots Farm was for a quantity of wheat exceeding $500, thus it was subject to the Statute of Frauds and was properly in writing. The subsequent oral agreement by Mr. Henderson to accept a reduced price for the corn, which was also a sale of goods exceeding $500, constitutes a modification of the original terms. Oklahoma’s UCC, like most states, has specific provisions addressing modifications. UCC § 2-209(3) states that the requirements of the statute of frauds section of this Article (§ 2-201) apply to the enforcement of a modification or rescission of a contract within its provisions. Therefore, if the oral modification alters the contract in such a way that the modified contract would have been subject to the statute of frauds, the modification must also be in writing to be enforceable. The oral agreement to accept a lower price for the corn, even though it’s a reduction, still pertains to a sale of goods that, in its original form, was subject to the Statute of Frauds. The key is whether the *modification itself* changes the nature of the contract such that it would require a writing. In this case, the modification is to the price term of a sale of goods that was already over $500. While UCC § 2-209(1) permits oral modifications, UCC § 2-209(3) brings the Statute of Frauds back into play for such modifications if the modified contract falls within its scope. Since the sale of corn was a transaction for goods priced at $500 or more, and the oral modification altered a key term (price) of this transaction, the modification itself must satisfy the Statute of Frauds. As there is no writing evidencing this oral modification, it is not enforceable. Therefore, Rustic Roots Farm can still demand the originally agreed-upon price for the corn.
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                        Question 29 of 30
29. Question
Ms. Anya, a licensed agricultural equipment dealer operating in Oklahoma, contracted with AgriTech Solutions, a company based in Texas, for the purchase of specialized irrigation systems. Upon delivery, Ms. Anya rightfully rejected the entire shipment due to substantial non-conformities that rendered the systems unfit for their intended purpose, as permitted by Oklahoma’s UCC Article 2. AgriTech Solutions was notified promptly of the rejection. The delivered irrigation systems are robust and not prone to rapid deterioration or spoilage. Despite several follow-up communications from Ms. Anya, AgriTech Solutions has failed to provide any reasonable instructions regarding the disposition of the rejected goods within a commercially reasonable period. Ms. Anya, as a merchant buyer, is now considering her options. Which of the following actions is most consistent with her duties and rights as a merchant buyer under Oklahoma’s UCC Article 2 when the seller fails to provide instructions for non-perishable rejected goods?
Correct
Under Oklahoma’s Uniform Commercial Code (UCC) Article 2, when a buyer rejects goods, they generally have a duty to hold the goods with reasonable care for a time sufficient to permit the seller to remove them. This duty applies if the buyer has a security interest in the goods, for example, if they have paid part of the purchase price or incurred expenses with respect to them. If the buyer is a merchant, their duties are more extensive. A merchant buyer who has possession of goods that they have rightfully rejected and that the seller has no agent or place of business at the market of rejection must follow any reasonable instructions from the seller. If the seller gives no instructions within a reasonable time after notification of rejection, and the goods are perishable or threaten to decline speedily in value, the merchant buyer must make reasonable efforts to sell them for the seller’s account. The buyer may then deduct the expenses of sale from the proceeds. If the goods are not perishable, the merchant buyer may store the goods for the seller’s account or reship them to the seller. The buyer is not entitled to reimbursement for expenses incurred in holding, storing, or reshipping the goods unless the seller has failed to give reasonable instructions. In this scenario, Ms. Anya, a merchant buyer, rightfully rejected the specialized agricultural equipment from AgriTech Solutions of Texas. AgriTech Solutions failed to provide reasonable instructions for the return of the non-perishable goods within a reasonable time. Therefore, Ms. Anya has the option to store the equipment for AgriTech Solutions’ account or reship it. She is not obligated to sell the equipment as it is not perishable. She may recover any reasonable expenses incurred in holding the goods.
Incorrect
Under Oklahoma’s Uniform Commercial Code (UCC) Article 2, when a buyer rejects goods, they generally have a duty to hold the goods with reasonable care for a time sufficient to permit the seller to remove them. This duty applies if the buyer has a security interest in the goods, for example, if they have paid part of the purchase price or incurred expenses with respect to them. If the buyer is a merchant, their duties are more extensive. A merchant buyer who has possession of goods that they have rightfully rejected and that the seller has no agent or place of business at the market of rejection must follow any reasonable instructions from the seller. If the seller gives no instructions within a reasonable time after notification of rejection, and the goods are perishable or threaten to decline speedily in value, the merchant buyer must make reasonable efforts to sell them for the seller’s account. The buyer may then deduct the expenses of sale from the proceeds. If the goods are not perishable, the merchant buyer may store the goods for the seller’s account or reship them to the seller. The buyer is not entitled to reimbursement for expenses incurred in holding, storing, or reshipping the goods unless the seller has failed to give reasonable instructions. In this scenario, Ms. Anya, a merchant buyer, rightfully rejected the specialized agricultural equipment from AgriTech Solutions of Texas. AgriTech Solutions failed to provide reasonable instructions for the return of the non-perishable goods within a reasonable time. Therefore, Ms. Anya has the option to store the equipment for AgriTech Solutions’ account or reship it. She is not obligated to sell the equipment as it is not perishable. She may recover any reasonable expenses incurred in holding the goods.
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                        Question 30 of 30
30. Question
A wholesale distributor located in Tulsa, Oklahoma, contracts with a boutique retailer in Dallas, Texas, to purchase 500 units of artisanal pottery. The contract states, “Seller shall ship the goods via reliable carrier, F.O.B. Tulsa.” While en route from Oklahoma, the shipment is destroyed by an unexpected, severe hailstorm. The distributor had properly packaged the goods and tendered them to a reputable interstate carrier in Oklahoma. The retailer refuses to pay, asserting that the goods never arrived in Dallas. What is the legal status of the tender of delivery and the passing of risk of loss under Oklahoma’s adoption of the Uniform Commercial Code, Article 2?
Correct
The scenario involves a contract for the sale of goods between a merchant in Oklahoma and a buyer in Texas. The contract specifies delivery to a carrier in Oklahoma. Under UCC § 2-503, tender of delivery requires the seller to hold conforming goods available for the buyer and give the buyer any notification reasonably necessary to enable him to take delivery. When the contract requires or authorizes the seller to ship the goods but does not require him to deliver them at a particular destination, then, unless otherwise agreed, the seller must: (a) put the goods into the possession of a carrier; and (b) make a contract for their transportation that is reasonable in the circumstances. If the seller is authorized to send the goods but not to ship them, the seller must make a reasonable contract for their transportation. The UCC also distinguishes between shipment contracts and destination contracts. In a shipment contract, risk of loss passes to the buyer when the goods are duly delivered to the carrier. In a destination contract, risk of loss passes to the buyer when the goods are tendered at the destination. Since the contract requires the seller to ship the goods but does not specify a particular destination within Texas, it is presumed to be a shipment contract. Therefore, the seller’s obligation is fulfilled by putting the goods into the possession of a carrier in Oklahoma. The subsequent damage to the goods while in transit, due to a storm, means the seller has properly tendered delivery, and the risk of loss has passed to the buyer at the point of shipment in Oklahoma. The buyer’s remedy for non-conformity, if any, would be against the carrier or through a claim for breach of warranty if the goods were not conforming at the time of shipment, but the seller’s tender of delivery was valid.
Incorrect
The scenario involves a contract for the sale of goods between a merchant in Oklahoma and a buyer in Texas. The contract specifies delivery to a carrier in Oklahoma. Under UCC § 2-503, tender of delivery requires the seller to hold conforming goods available for the buyer and give the buyer any notification reasonably necessary to enable him to take delivery. When the contract requires or authorizes the seller to ship the goods but does not require him to deliver them at a particular destination, then, unless otherwise agreed, the seller must: (a) put the goods into the possession of a carrier; and (b) make a contract for their transportation that is reasonable in the circumstances. If the seller is authorized to send the goods but not to ship them, the seller must make a reasonable contract for their transportation. The UCC also distinguishes between shipment contracts and destination contracts. In a shipment contract, risk of loss passes to the buyer when the goods are duly delivered to the carrier. In a destination contract, risk of loss passes to the buyer when the goods are tendered at the destination. Since the contract requires the seller to ship the goods but does not specify a particular destination within Texas, it is presumed to be a shipment contract. Therefore, the seller’s obligation is fulfilled by putting the goods into the possession of a carrier in Oklahoma. The subsequent damage to the goods while in transit, due to a storm, means the seller has properly tendered delivery, and the risk of loss has passed to the buyer at the point of shipment in Oklahoma. The buyer’s remedy for non-conformity, if any, would be against the carrier or through a claim for breach of warranty if the goods were not conforming at the time of shipment, but the seller’s tender of delivery was valid.