Ready Construction Buys a Computer System from Ace That Ace

question 101

Multiple Choice

Ready Construction buys a computer system from Ace that Ace will also service. Two years after the sale, a disagreement develops. Ace has determined that the common law of contracts favors it. Article 2 favors Ready. Ace should:

• A) realize that the agreement is for the sale of goods so it must be covered by Article 2, so work to settle on the best terms possible
• B) try to show that the value of service dominates
• C) establish the contract as one for the sale of tangible goods
• D) define itself as a merchant under Article 2 of the UCC
• E) none of the other choices

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Definitions:

Interest Rate Swaps

A financial derivative instrument involving the exchange of interest payments between two parties on a specified principal amount.

Option Contract

An agreement that gives the holder the choice, but not the obligation, to buy or sell an underlying asset at a set price on or before a certain date.

Foreign Currency

Currency used in a country other than one’s own, reflecting the economic practices and transactions in foreign nations.