Which of the Following Is an Example of a Valid

question 29

Multiple Choice

Which of the following is an example of a valid contract according to the UCC?

• A) Bob offers to sell either of his bikes, red or blue, to Sam the coming Monday for $1,000, to which Sam agrees. On Saturday Bob goes to race dirt bikes on his red bike; due to a minor collision, the red bike's brakes stop working. He does not get time to get the brakes repaired. On Monday, however, he offers the red bike to Sam, who was out of town for the weekend.
• B) Bob offers to sell either of his bikes, red or blue, to Sam the coming Monday for $1,000, to which Sam agrees. On Monday, Bob sells his blue bike to Sam and asks for $1,500 in return.
• C) Bob offers to sell either of his bikes, red or blue, to Sam the coming Monday. Sam agrees to buy the blue bike and to pay $1,000 or $1,200. On Monday, Bob asks Sam to pay $1,200 for his red bike.
• D) Bob offers to sell either of his bikes, red or blue, for $1,000 to Sam the coming Monday, to which Sam agrees. Bob also asks Sam, as part of the deal, not to buy a bike during the weekend, again agreed to by Sam. Sam goes out of town for the weekend and buys a bike for $700. Bob asks Sam to pay him $1,000 for his bike on Monday.
• E) Bob offers to sell either of his bikes, red or blue, to Sam for $1,000 on a Monday, to which Sam agrees. On the second Monday of the month, Sam asks Bob to sell his blue bike for $1,000.

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Definitions:

Negotiable

Capable of being transferred or converted into cash or equivalent value, often used in reference to financial instruments.

Payable on Demand

Refers to a financial obligation that must be paid by the debtor when the creditor requests it.

Drawer

In the context of banking, the person who writes or issues a check or draft instructing the drawee to pay someone else.

Drawee

The party upon whom a cheque or draft is drawn, and who is expected to pay the amount specified to the payee.