JMU COB 318 CHAPTER 14 | COMPREHENSIVE BUSINESS STUDY GUIDE,
PRACTICE QUESTIONS & ANSWERS 2026/2027
conforming goods - ANS ✔✔Goods that conform to the contract specifications.
cover - ANS ✔✔A buyer or lessee's purchase on the open market of goods to substitute for those
promised but never delivered by the seller. Under the Uniform Commercial Code, if the cost of cover
exceeds the cost of the contract goods, the buyer or lessee can recover the difference, plus incidental
and consequential damages.
cure - ANS ✔✔Under the Uniform Commercial Code, the right of a party who tenders nonconforming
performance to correct his or her performance within the contract period.
express warranty - ANS ✔✔A seller's or lessor's oral or written promise, ancillary to an underlying sales
or lease agreement, as to the quality, description, or performance of the goods being sold or leased.
firm offer - ANS ✔✔An offer (by a merchant) that is irrevocable without consideration for a period of
time (not longer than three months). A firm offer by a merchant must be in writing and must be signed
by the offeror.
implied warranty - ANS ✔✔A warranty that the law derives by implication or inference from the nature
of the transaction or the relative situation or circumstances of the parties.
implied warranty of fitness for a particular purpose - ANS ✔✔A warranty that goods sold or leased are fit
for the particular purpose for which a buyer or lessee will use the goods.
implied warranty of merchantability - ANS ✔✔A warranty that goods being sold or leased are reasonably
fit for the ordinary purpose for which they are sold or leased, are properly packaged and labeled, and are
of fair quality.
intangible property - ANS ✔✔A contract for the sale of goods under which the ownership of goods is
transferred from a seller to a buyer for a price.
lease agreement - ANS ✔✔In regard to the lease of goods, an agreement in which one person (the
lessor) agrees to transfer the right to the possession and use of property to another person (the lessee)
in exchange for rental payments.
lessee - ANS ✔✔One who acquires the right to the possession and use of another's goods in exchange
for rental payments.
lessor - ANS ✔✔One who transfers the right to the possession and use of goods to another in exchange
for rental payments.
merchant - ANS ✔✔A person who is engaged in the purchase and sale of goods. Under the UCC, a
person who deals in goods of the kind involved in the sales contract or who holds herself or himself out
as having skill or knowledge peculiar to the practices or goods being purchased or sold.
PRACTICE QUESTIONS & ANSWERS 2026/2027
conforming goods - ANS ✔✔Goods that conform to the contract specifications.
cover - ANS ✔✔A buyer or lessee's purchase on the open market of goods to substitute for those
promised but never delivered by the seller. Under the Uniform Commercial Code, if the cost of cover
exceeds the cost of the contract goods, the buyer or lessee can recover the difference, plus incidental
and consequential damages.
cure - ANS ✔✔Under the Uniform Commercial Code, the right of a party who tenders nonconforming
performance to correct his or her performance within the contract period.
express warranty - ANS ✔✔A seller's or lessor's oral or written promise, ancillary to an underlying sales
or lease agreement, as to the quality, description, or performance of the goods being sold or leased.
firm offer - ANS ✔✔An offer (by a merchant) that is irrevocable without consideration for a period of
time (not longer than three months). A firm offer by a merchant must be in writing and must be signed
by the offeror.
implied warranty - ANS ✔✔A warranty that the law derives by implication or inference from the nature
of the transaction or the relative situation or circumstances of the parties.
implied warranty of fitness for a particular purpose - ANS ✔✔A warranty that goods sold or leased are fit
for the particular purpose for which a buyer or lessee will use the goods.
implied warranty of merchantability - ANS ✔✔A warranty that goods being sold or leased are reasonably
fit for the ordinary purpose for which they are sold or leased, are properly packaged and labeled, and are
of fair quality.
intangible property - ANS ✔✔A contract for the sale of goods under which the ownership of goods is
transferred from a seller to a buyer for a price.
lease agreement - ANS ✔✔In regard to the lease of goods, an agreement in which one person (the
lessor) agrees to transfer the right to the possession and use of property to another person (the lessee)
in exchange for rental payments.
lessee - ANS ✔✔One who acquires the right to the possession and use of another's goods in exchange
for rental payments.
lessor - ANS ✔✔One who transfers the right to the possession and use of goods to another in exchange
for rental payments.
merchant - ANS ✔✔A person who is engaged in the purchase and sale of goods. Under the UCC, a
person who deals in goods of the kind involved in the sales contract or who holds herself or himself out
as having skill or knowledge peculiar to the practices or goods being purchased or sold.
