Free CCCM Practice Questions

Question 1

Two merchants exchange forms for a $48,000 valve order. The buyer's purchase order states, "Acceptance is limited to the terms of this offer." The seller's prompt acknowledgment accepts the order without making acceptance conditional, but adds a consequential-damages exclusion. The buyer never agrees to that addition. Before either party performs, what contractual effect does UCC Article 2 give the acknowledgment?

Accepted Answer

A contract formed, but the seller's added exclusion did not become part of the parties' agreement.

Answer

No contract formed because an acknowledgment containing an additional term necessarily rejects the original offer.

Answer

A contract formed with the added exclusion because both parties are merchants and the buyer remained silent.

Answer

No contract can form until performance begins, because the parties' written forms contain inconsistent terms.

Question 2

A printing company selects a press and its supplier. A finance company, which neither selects nor manufactures nor supplies the press, buys it solely for a true lease for business use and gives the printer the supply contract before the printer signs the lease. The printer inspects and accepts the press. Two months later, a component covered by the supplier's warranty fails. The finance company has performed its obligations and has not consented to payment relief. Under UCC Article 2A, what is the printer's obligation while the warranty dispute is resolved?

Accepted Answer

Continue making the scheduled rental payments to the finance company and enforce the supplier's repair warranty separately.

Answer

Withhold rent until the supplier restores the press, because the failure substantially impairs its value.

Answer

Pay rent into a separate escrow account until the finance company ensures completion of the repair.

Answer

Cancel the lease and return the press, treating the supplier's failure as a breach by the finance company.

Question 3

An equipment agreement is titled "Operating Lease." The user cannot terminate its four-year payment obligation and may buy the machine for $1 at the end. At signing, its expected value at that time is $28,000, and returning it would cost an estimated $1,200. The user also pays maintenance and insurance. Which classification follows from UCC Article 1?

Accepted Answer

A security interest, because the nonterminable obligation is paired with a nominal purchase option.

Answer

A true lease, because the parties labeled the agreement an operating lease.

Answer

A true lease, because ownership remains with the lessor until the user exercises the purchase option.

Answer

A security interest, because requiring the user to pay maintenance and insurance makes any lease secured financing.

Question 4

A bank qualifies as a holder in due course of a negotiable note issued in a business equipment purchase. The maker raises a defense based on the seller's conduct. Which fact, if established, would permit the maker to resist the bank's enforcement under UCC Article 3?

Accepted Answer

The maker was deceived into believing it was a delivery receipt and had no reasonable opportunity to discover its true character.

Answer

The seller knowingly overstated the machine's expected output, and the maker relied on that statement when knowingly signing the note.

Answer

The delivered machine failed to achieve the output expressly promised in the purchase contract, substantially impairing its value to the maker.

Answer

The seller never delivered the machine for which the maker knowingly signed the note, leaving the purchase price wholly unsupported by performance.

Question 5

Acceptance testing of a packaging line records 31, 32, and 31 cartons per minute under the operating conditions specified in the signed sales agreement. That agreement expressly promises at least 40 cartons per minute. Elsewhere, conspicuous language states, "AS IS; NO WARRANTIES, EXPRESS OR IMPLIED." The buyer gives timely notice and asserts breach of the written production promise. The seller relies on the disclaimer. Under UCC Article 2, how should the production requirement and disclaimer be reconciled?

Accepted Answer

The specific production promise creates an express warranty that the inconsistent general disclaimer cannot negate.

Answer

The conspicuous disclaimer defeats express warranties as well as implied warranties.

Answer

The claim depends on proving that the line also fails the ordinary-purpose standard for merchantable goods.

Answer

The output figures support a claim only if the agreement labels the production requirement as a warranty.

Question 6

An acquisition file for a wholesaler reports that a proposed transfer represents 68% of inventory by unit count, 57% by book value, and 43% by fair market value, all measured when the agreement becomes enforceable. The sale is outside the ordinary course, and the buyer knows the wholesaler will close. Applying the 1989 Revised UCC Article 6, which assessment correctly addresses the majority-inventory element of a bulk sale?

Accepted Answer

The element is not met because less than half of the inventory's fair market value will transfer.

Answer

The element is met because more than half of the individual inventory units will transfer.

Answer

The element is met because the inventory transferring represents more than half of total inventory book value.

Answer

The element cannot be evaluated until the parties establish whether more than half of all business assets will transfer.

Question 7

At 4:20 p.m., a manufacturer's treasurer learns that its bank has executed an unauthorized $180,000 wire. The agreed, commercially reasonable authentication procedure required both a valid security code and a callback to a registered telephone number. A fraudster used a stolen code; the bank skipped the callback to expedite payment. No authorized employee requested or ratified the transfer, and the manufacturer notified the bank immediately. Under UCC Article 4A, how is responsibility for the principal allocated?

Accepted Answer

The bank must refund the debit because it did not comply with the agreed security procedure.

Answer

The manufacturer bears the loss because the fraudster supplied the correct security code.

Answer

The parties must share the loss equally because compromised credentials and an omitted callback establish shared responsibility.

Answer

The manufacturer bears the loss unless it proves the bank knew the payment order was fraudulent when executing it.

Question 8

A rental company seeks to enforce an alleged oral 18-month lease of standard forklifts with total rent of $18,000. Both parties are merchants. The company sent a signed confirmation identifying the goods and term; the business customer read it but did not object for 12 days. The customer has signed nothing, denies making the agreement, and has received no goods. Applying UCC Article 2A, does the unanswered confirmation itself defeat the customer's statute-of-frauds defense?

Accepted Answer

No; Article 2A has no merchant-confirmation exception that makes this writing enforceable against a customer who has not signed.

Answer

Yes; a merchant's failure to object in writing within ten days makes the confirmation sufficient against that merchant.

Answer

Yes; the rental company's signature is sufficient because the confirmation identifies both the goods and the lease term.

Answer

No; enforcement requires one document bearing both parties' signatures, rather than a writing signed by only one party.

Question 9

At the owner's request, a warehouse validly issues a negotiable paper receipt to bearer for goods the owner has deposited. A thief steals the receipt, not the goods, and delivers it to a purchaser who pays value in a regular-course business purchase, in good faith and without notice of any claim or defense. The owner later discovers the theft. Between that owner and purchaser, whose rights to the goods prevail under UCC Article 7?

Accepted Answer

The purchaser's, because due negotiation protects against this claim arising from theft of the bearer receipt.

Answer

The original owner's, because theft prevents the receipt from conveying any rights in the goods.

Answer

The original owner's, because a warehouse receipt cannot transfer title without a separate bill of sale.

Answer

The purchaser's initially, but the owner may reclaim the goods by reporting the theft before warehouse delivery.

Question 10

After a seller wrongfully refuses to deliver components priced at $40,000, the buyer promptly makes a reasonable substitute purchase in good faith for $46,500. The original price was unpaid. Separate reasonable expediting charges are $900. The buyer also saves $400 in freight it would have paid on the original transaction. Its claim includes $3,000 in lost profits from a disruption it could reasonably have prevented by using suitable stock already on hand. No contractual remedy limitation applies. Applying UCC Article 2, what amount of damages is recoverable for these stated losses?

Accepted Answer

$7,000; add expediting charges and deduct the original freight expense avoided.

Answer

$6,500; limit recovery to the purchase-price difference.

Answer

$7,800; add both the expediting charge and the avoided freight expense to the price difference.

Answer

$10,000; include the lost profits as well as expediting charges, after deducting the freight saved.

Free CCCM Practice Questions

Domain 1: General Provisions

Question 1

Domain 2: Sales

Question 2

Question 3

Question 4

Domain 3: Leases

Question 5

Question 6

Domain 4: Negotiable Instruments

Question 7

Domain 6: Funds Transfer

Question 8

Domain 8: Bulk Sales

Question 9

Domain 9: Documents of Title

Question 10

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