Sales - Diagnostic Exercises Test I: Contract Types

A contract where one party (the seller) agrees to transfer ownership of a specific good to another party (the buyer) in exchange for a fixed price.

A contract where one party (the contractor) agrees to create a specific item or perform a specific service for another party (the client) in exchange for a fixed price.

In a contract of sale, it is the amount of money the buyer agrees to pay the seller for the specific good being transferred.

In the context of a contract of sale for goods, it is the good itself that is being transferred from the seller to the buyer.

A contract of sale is valid whether the monetary consideration is higher or lower than the actual value of the good being sold. The agreement between the buyer and seller is what determines the price, not the market value of the item.

The price of a good in a contract of sale must be certain. If it depends entirely on the subjective discretion of one party and the other party doesn't accept the set price, it remains uncertain and the agreement is not binding.

In an 'on sale or return' arrangement, the buyer gets to decide whether to keep the good or return it. Ownership only transfers to the buyer if they decide to keep the good. Until then, the seller retains ownership.

When the buyer arranges for the goods to be delivered by a carrier (like a shipping company), ownership transfers to the buyer when the goods are delivered, with no reservation by the seller to control the goods.

In a contract of sale where the buyer pays in installments, a vendor (seller) can't use foreclosure as a remedy if the buyer defaults.

Both statements are false. The contract of sale is valid regardless of whether the monetary consideration is more or less than the value of the property consideration. Similarly, the price in a contract of sale is considered certain unless it depends entirely on the discretion of one party and the other party does not accept the price set.