Acct 416 Chapter 14
Precise Parts, Inc., and Quality Auto stores enter into a contract for a sale of auto parts that meet certain specifications. Precise Parts ships goods that do not comply. Quality Auto a. can reject the entire shipment. b. cannot reject the entire shipment. c. must accept the entire shipment. d. must reject the entire shipment.
a. can reject the entire shipment.
EconBank issues a letter of credit in favor of Facile Deals Inc., a U.S. firm, to facilitate an international sales contract to buy certain products from Global Goods, Ltd., a British company. Global is entitled to payment when it a. complies with the terms and conditions of the letter of credit. b. asks to be paid. c. enters into the contract with the buyer. d. verifies that the buyer has the money to pay for the purchase.
a. complies with the terms and conditions of the letter of credit.
Quarry Equipment Corporation and Rock & Gravel Inc. enter into a lease of three bulldozers. Under the perfect tender rule, Quarry must ship or tender goods to Rock & Gravel that, with respect to the contract description, conform a. in every way. b. to the best of the lessor's ability under the circumstances. c. to a substantial degree. d. to a reasonable extent.
a. in every way.
Speedy's Auto Parts orders twenty tires from Tough Tires, Inc. Ten of the tires are delivered in a damaged condition. Speedy's a. cannot reject the entire shipment. b. may accept the shipment with a reduction in price. c. must reject the entire shipment. d. must pay for all of the tires at the contract price.
b. may accept the shipment with a reduction in price.
Owen and Pablo enter into a contract for a sale of irrigation equipment. Pablo pays, but Owen does not deliver. Pablo can normally recover as damages the difference between a. any loss avoided and any profit gained. b. the contract price and the market price. c. the actual price and the hoped-for price. d. the current prices in the parties' locations.
b. the contract price and the market price.
Fuel Connector Products, Inc., agrees to sell Go-Flo, Inc., a certain quantity of hose couplings and fittings located at Fuel Connector's place of business, but the contract does not specify a place of delivery. Go-Flo is expected to pick up the goods. The place of delivery is a. the current location of the hose couplings and fittings. b. Go-Flo's place of business. c. Fuel Connector's place of business. d. the U.S. Postal Service office nearest to Go-Flo's place of business.
c. Fuel Connector's place of business.
Pavers Inc. contracts to buy some heavy equipment from Earthmovers, Inc. Before either party performs, Earthmovers sells its assets to Excavation Corporation. On learning of the sale, Pavers is concerned about its contract with Earthmovers. Pavers should a. buy the equipment from a different firm and bill the seller for the price. b. buy the equipment from a different firm and bill Excavation for the price. c. demand assurances of performance from the seller. d. consider the contract repudiated and sue the seller for breach.
c. demand assurances of performance from the seller.
H2O Company contracts to sell pumps, tanks, and water storage systems to In-Flo Irrigation, Inc. Before the goods are delivered, In-Flo indicates that it will not be able to pay. H2O can a. require the buyer to find a buyer for the goods. b. do nothing. c. resell the goods and recover any damages from the buyer. d. force the buyer to accept and pay for the goods.
c. resell the goods and recover any damages from the buyer.
Banquets & Parties (B&P) contracts to buy 1,000 uninflated balloons from Gas Bags, Inc., for $1 per item. When the market price decreases to 50 cents per balloon, B&P refuses to go through with the deal. Gas Bags can recover a. $0. b. $1,000. c. $1,500. d. $500.
d. $500.
Soft Chair Company contracts to deliver 100 chairs to Stuffy Furnishings Store on May 1 for which Stuffy agrees to pay. Soft tells Stuffy on April 15 that delivery will be delayed until June 1. Stuffy may a. only sue Soft for breach of contract. b. only suspend its own performance. c. only await Soft's performance for a commercially reasonable time. d. await performance, sue Soft, or suspend its own performance.
d. await performance, sue Soft, or suspend its own performance.