To Simplify,clarify,and Modernize the Law Governing Commercial Transactions,the UCC Permits

question 38

Multiple Choice

To simplify,clarify,and modernize the law governing commercial transactions,the UCC permits the use of "open terms" in sales contracts.In the use of "open terms," which of the following is true?

• A) The court will use market value and other comparable sales to determine what a reasonable price would have been at the time of delivery if the parties have not settled the price in the contract.
• B) If time of payment is not mentioned in the contract, payment within a commercially reasonable time is presumed.
• C) If the contract permits the buyer or seller to determine the price during contract performance, the UCC requires the party to do so in good faith.
• D) All of the above are true.

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Definitions:

Working Capital

The difference between a company's current assets and current liabilities, indicating the liquidity of the business.

Current Liabilities

Short-term financial obligations that are due within one year or within the normal operating cycle of a business.

Liquidity

A company's ability to meet its short-term obligations using its most liquid assets, indicating financial health.

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return.