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DEFNITIONS
LEASES I
FINANCE LEASES
LEASES II
POTPOURRI
100
The person who acquires the right of possession and use of goods under a lease is called: (A) LESSOR (B) LANDLORD (C) TENANT (D) LESSEE
What is a (D) LESSEE?
100
With respect to lease contracts, the Statute Fraud means: (A) A formal enactment by a legislative authority that governs fraud. (B) A statute that regulates the leasing of counterfeit goods (C) A federal law that requires lease contracts to be in writing (D) Lease contracts over $1000 are required by the UCC to be in writing and signed by the party against whom enforcement is sought.
What is (D) Lease contracts over $1000 are required by the UCC to be in writing and signed by the party against whom enforcement is sought.
100
In the case of a lease contract (excluding a finance lease) risk of loss: (A) Is retained by the lessor. (B) Passes to lessee upon delivery to the carrier. (C) Passes to the lessee. (D) Passes to lessee upon tendered for delivery. Source: § 2A-219
What is (A) Is retained by the lessor.
100
Statute of Limitations for action for default under a lease contract, including breach of warranty or indemnity, must be commenced (A) within 4 years after the cause of action accrued. (B) within a reasonable time after the cause of action accrued. (C) no later than 5 years after cause of action accrued even if the party knew of the default. (D) no later than 10 years if the party did not discover the breach. Source: § 2A-506
What is (A) within 4 years after the cause of action accrued.
100
Which of the following statements is correct if the judicial forum chosen by the parties to a consumer lease is a forum that would not otherwise have jurisdiction over the lessee? (A) The choice is enforceable. (B) The choice is unenforceable. (C) The choice is enforceable but the lessee may change at his discretion. (D) The choice is enforceable but the lessor may change at his discretion. Source: § 2A-106(2)
What is (B) The choice is unenforceable?
200
A lease that a Lessor regularly engaged in the business of leasing or selling makes to a Lessee who is an individual and who takes under the lease primarily for personal, family, or household purposes. (A) FINANCE LEASE (B) CONSUMER LEASE (C) INSTALLMENT LEASE CONTRACY (D) PURCHASE MONEY LEASE
What is (B) CONSUMER LEASE?
200
An offer to lease goods that gives assurance it will be held open is not revocable for lack of consideration and will be held open if no time is stated: (A) Two months (B) One month (C) Three months (D) Four months
What is (C) Three months?
200
TRUE OR FALSE All warranties, whether express or implied, extends to the lessee to the extent of the lessee's leasehold interest under a finance lease.
What is FALSE?
200
If a repairman's lien [a person in the ordinary course of business furnishes services or materials] has been filed against lessee whose interest takes priority? (A)The lessor's (B) The lessee's (C)The repairman's lien (D) The lessor's creditors
What is (C)The repairman's lien?
200
Which statement concerning modifying a leasing contract is correct? (A) A signed lease agreement that excludes modification except by a signed writing can only be modified by a signed writing. (B) An agreement modifying a lease needs consideration to be binding. (C) Once a party makes a waiver affecting a performance obligation of a lease contract it cannot be retracted. (D) he parties may modify a lease contract by oral agreement even though it contains a clause stating it can only be modified in writing. Source: § 2A-208
What is (A) A signed lease agreement that excludes modification except by a signed writing can only be modified by a signed writing?
300
A three–party transaction involving a Lessor, Lessee, and Supplier. In such leases, the Lessor basically provides only financing and does not select, manufacture, or supply the goods, and the Lessee looks to the Supplier for all issues with respect to the performance of goods leased. (A) CONSUMER LEASE (B) PURCHASE MONEY LEASE (C) INSTALLMENT LEASE CONTRACT (D) FINANCE LEASE
What is (D) FINANCE LEASE?
300
If lessor discovers the lessee to be insolvent: (A) The lessor must proceed by judicial process to terminate the agreement (B) The lessor may refuse to deliver the goods (C) The lessor must immediately recall all pending orders (D) The lessee has up to 360 days to become solvent and take possession of the goods without additional cost to lessee.
What is (B) The lessor may refuse to deliver the goods?
300
Which statement is correct concerning the benefit that extend to the lessee under the supply contract? (A) Is not subject to the terms of the warranty, supply contract and all defense or claims arising from the supply contract. (B) Excludes any third party warranties provided in connection with the supply contract. (C) Imposes duties and liabilities under the supply contract on lessee. (D) All warranties, whether express or implied, extends to the lessee to the extent of the lessee's leasehold interest under a finance lease. Source: § 2A-209(1)(2)(ii)
What is (B) Excludes any third party warranties provided in connection with the supply contract.
300
Concerning the exclusion or modification of warranties, (A) unless the circumstances indicate otherwise, all implied warranties are excluded by expressions like "as is" or "with all faults". (B) this is not legal to do in a lease contract. (C) even if the lessee has refused to examine the goods, there is an implied warranty with regard to defects that an examination ought in the circumstances to have revealed.(D) an implied warranty may not be excluded or modified by course of dealing, course of performance, or usage of trade. Source: § 2A-214(3)
What is (A) unless the circumstances indicate otherwise, all implied warranties are excluded by expressions like "as is" or "with all faults"?
300
Incidential damages to an aggrieved lessor include: (A) Any commercially reasonable charges, expenses, or commissions incurred in stopping delivery (B) Charges for transportation, care and custody of goods after the lessee's default (C) Charges in connection with return to disposition of the goods (D) All of the above
What is (D) All of the above?
400
This means a parcel or single article that is subject matter of a separate lease or delivery, whether or not it is sufficient to perform the lease contract. (A) LOT (B) COMMERCIAL UNIT (C) CONFORMING GOODS (D) DELIVERY
What is (A) LOT?
400
A transaction in the form of a lease creates a security interest if the consideration that the lessee is to pay the lessor for the right to possession and use of the goods is an obligation for the term of the lease and is not subject to termination by the lessee, and (A) The original term of the lease is equal to or smaller than the remaining economic life of the goods. (B) The lessee is bound to renew the lease for the remaining economic life of the goods or is bound to become the owner of the goods. (C) The lessee does not have an option to renew the lease for the remaining economic life of the goods for no additional consideration or for nominal additional consideration upon compliance with the lease agreement.(D) The lessee has an option to become the owner of the goods for additional consideration. Source: § 1-203(b)
What is (B) The lessee is bound to renew the lease for the remaining economic life of the goods or is bound to become the owner of the goods.
400
TRUE OR FALSE In the case of a finance lease the risk of loss passes to the lessee on the lessee's receipt of the goods if the supplier, is a merchant.
What is TRUE?
400
An implied warranty of fitness for a particular purpose exists at the time the lease agreement is made: (A)If the goods are manufactured in accordance with the lessor's specifications. (B) If the goods are sold "with all faults". (C) If the lessee is relying on the lessor's skill or judgment to select or furnish suitable goods (D) If the goods are purported by the lessor to be fungible goods that conform to the description skill or judgment to select or furnish suitable good.
What is (D) If the goods are purported by the lessor to be fungible goods that conform to the description skill or judgment to select or furnish suitable good.
400
Except as otherwise provided with respect to goods that threaten to decline in value speedily, after rejection of the goods in lessee's possession, lessee shall: (A) Hold them with reasonable care, for a reasonable time after lessee's notification of rejection (B) Promptly return goods to lessor at lessee's expense without waiting for instructions (C) Discard the goods immediately. (D) Dispose of the goods even though the lessor provides instructions to the contrary.
What is (A) Hold them with reasonable care, for a reasonable time after lessee's notification of rejection?
500
§2A- 218(3) The lessor retain the following interest in leased goods: (A) Financial interest (B) Security interest (C) Insurable interest (D) Special property interest
What is (C) Insurable interest?
500
Under an installment lease contract a lessee: (A) May not reject any delivery if a nonconformity is a defect in the required document. (B) May reject any delivery that is nonconforming if the nonconformity substantially impairs the value of that delivery and cannot be cured. (C) Must accept nonconforming units if bundled in lots. (D) May reject all further deliveries based upon the previous non-conformity.
What is (B) May reject any delivery that is nonconforming if the nonconformity substantially impairs the value of that delivery and cannot be cured.
500
Unless otherwise stated in the agreement, which of the following is true regarding a finance lease: (A) There is an implied warranty against infringement. (B) Express Warranties apply to the Lessor. (C) There is an implied warranty of merchantability. (D) Risk of loss remains with the Lessor.
What is (B) Express Warranties apply to the Lessor?
500
Which of the following is NOT a remedy for Lessor should Lessee default? (A) Lessor can cancel the lease contract (B) Lessor can withhold delivery of the goods and take possession of goods previously delivered (C) Lessor can dispose of the goods and recover damages (D) Lessor can place a lien against lessee's existing inventory even if such remedy is not identified in the lease contract.
What is (D) Lessor can place a lien against lessee's existing inventory even if such remedy is not identified in the lease contract?
500
What statement is correct concerning Lessee's entitlement to damages resulting from lessor's breach: (A) Does not include injury to person or property proximately resulting from any breach of warranty (B) Includes any loss resulting from general or particular requirements and needs of which the lessor at the time of contracting had reason to know (C) Does not include any loss resulting from general or particular requirements and needs of which lessor had a reason to know (D) Does not include consequential damages
What is (B) Includes any loss resulting from general or particular requirements and needs of which the lessor at the time of contracting had reason to know?