Chapter 11

Goods must be of the highest quality possible to be merchantable.

False

Merchants are not required to warrant that the goods they sell are fit for their ordinary purpose.

False

Under a destination contract, the risk of loss passes to the buyer when the goods are duly delivered to the carrier

False

The contract term "free on board" indicates that the selling price of goods includes transportation costs to the specific F.O.B. place named in the contract.

True

Under a shipment contract, if the seller does not make a reasonable contract for transportation or notify the buyer of the shipment, the buyer can reject the goods if a material loss results.

True

Under the UCC, good faith means honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade.

True

A buyer who rightfully rejects nonconforming goods may obtain cover or cancel the contact, but may not seek damages.

False

A buyer's failure to cover will bar him or her from using any other remedies available under the UCC.

False

Chord Guitars Inc. sells guitars and other stringed instruments to consumers. A Chord salesperson says to a potential customer, "This Chord is the best guitar you'll find anywhere, even online." This statement is

None of the choices

Megan, an agent for a department store, orders one hundred dresses from Sal's Clothing Shop for the Spring Blossom Sale. There is no specific agreement in the sale contract indicating when title will pass to the department store. The title will pass to the department store when

Sal's Clothing Shop physically delivers the dresses to the department store.

A warranty of good title means that a seller warrants that he or she has valid title to the goods and that transfer of the title is rightful.

True

Goods associated with real estate often fall within the scope of Article 2.

True

Statements of fact made during the bargaining process are express warranties.

True

Riverside Ranch is a horse breeding facility. Steed Stables is a customer looking for a new stallion for its breeding program. Riverside's representative Tomas shows Steed a stallion that he says is very fertile and can easily breed twenty mares per year. This statement is

an express warranty.

Beef Burgers, Inc. contracts to buy five hundred steers from Fattening Feedlots. Before Fattening Feedlots can deliver the steers, there is an outbreak of disease in the feedlot, and all the cattle are quarantined. In this case the perfect tender rule

does not apply

Sweet Fruits contracts with Fruits to You, Inc. for a delivery of two hundred pounds of strawberries to be delivered by Keep Kool Trucking, a trucking company with refrigerated trucks. On the day of delivery, the refrigeration units on Keep Kool's trucks are not working. Fruits to You

may ship the goods to Sweet Fruits using another trucking company with refrigerated trucks.

Fresh Dairy, Inc., is the offeror and Gelato Ice Cream Company is the offeree under a unilateral sales contract in which Hector's Helado Corporation is also interested. Gelato is not notified of Fresh Dairy's performance within a reasonable time. Gelato

may treat the offer as having lapsed

Arnold buys a backhoe from Big Dig Equipment Inc. Arnold is unaware that Credit Collection Company holds a lien against the backhoe when he buys it. If Credit Collection repossesses the backhoe, Arnold can

recover from Big Dig for breach of warranty

Outdoor Outfitters Store contracts to buy fifty tents from Pitched Camp, Inc. Unless the contract states otherwise, it is assumed to be

shipment contract

On July 10, Pet Supply Store orders fifty small dog collars from Quality Collars, Inc. to be delivered by July 15. On July 13, Quality Collars tenders fifty large dog collars. Pet Supply rejects the shipment. Quality Collars has

until July 15 to cure