Chapter 14

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

False

A contract for a sale of real property or services is a contract for a sale of goods. True Or False

False

The United Nations Convention on Contracts for the International Sale of Goods (CISG) is the uniform international sales law of countries that account for more than two-thirds of all global trade. True Or False

True

Merchants are held to a higher standard of performance or duty than are nonmerchants. True Or False

True

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

True

Jill buys a refrigerator and pays the company to have it delivered. While the contract covers both a good and a service, it likely is governed by: a. Article 2 of the UCC. b. Article 2B of the UCC. c. Article 2A of the UCC. d. common law.

a. Article 2 of the UCC.

Qua n' Quench Café buys twenty-five bags of Columbia coffee beans from Roasted Bean Brokers, Inc. The parties agree to ship the coffee beans "F.O.B. Qua n' Quench " via Swiftline Trucking Company. The coffee beans rot in transit. The loss is suffered by a. Roasted Bean b. Qua n' Quench c. Swiftline d. Columbia

a. Roasted Bean

Outdoor Outfitters Store contracts to buy fifty tents from Pitched Camp, Inc. Unless the contract states otherwise, it is assumed to be a. a shipment contract b. a destination contract c. none of the choices d. a delivery ex-ship

a. a shipment contract

Janice is shopping for something to put on the floor of her dairy barn that won't cause the cows to slip but will clean it up a bit. She goes to Gabe's Farm Store and Gabe tells Janice that he has just the thing, a special rubber flooring that works well in dairy barns and has an anti-slip property to it. Based on Gabe's comments, Janice buys the floor covering and installs it. Right away, two dozen cows slip, fall, and are injured on the slippery rubber. Janice sues Gabe, contending that Gabe breached: a. an implied warranty of fitness for a particular purpose. b. an implied warranty of merchantability. c. a warranty of title. d. a void warranty.

a. an implied warranty of fitness for a particular purpose.

Umberto contracts with Allison in Seattle to purchase 10,000 bags of marbles for shipment to Umberto's New York factory. If Umberto and Allison agree to a shipment contract, title passes to Umberto, the buyer: a. at the time and place of shipment. b. when the carrier reaches the midway point of transporting the goods. c. at the time and place of delivery. d. when Umberto, the buyer, is in possession of the goods.

a. at the time and place of shipment.

Trucks & Trailers, Inc. (T&T), and United Delivery Service enter into a contract for a lease of trucks. T&T is a merchant who deals in goods of the kind leased. Under the UCC, an implied warranty of merchantability arises a. automatically b. only if the lessee asks for such a warranty c. only if the lessor expresses such a warranty d. only in conjunction with sales contracts, not lease contracts

a. automatically

Harvey buys a used Jet Ski from Taylor's Sports Store. Harvey takes the Jet Ski to the river and discovers that it doesn't work. He immediately notifies the seller of the problem. Taylor's can: a. cure the defect. b. reclaim the Jet Ski. c. cover. d. give Harvey an assurance in writing that the Jet Ski was working when he sold it.

a. cure the defect.

Beef Burgers, Inc. contracts to buy ve hundred steers from Fattening Feedlots. Before Fattening Feedlots can deliver the steers, there is an outbreak of the disease in the feedlot, and all the cattle are quarantined. In this case the perfect tender rule a. does not apply b. applies to both parties c. applies to only Beef Burgers d. applies only to Fattening Feedlots

a. does not apply

Joey sells a clock from his store through an online auction website. He has never met the buyer, Rod, and had no communication with him before the sale agreement. When he sends the clock, he does not disclaim any warranties. The sale most likely automatically carries with it the implied warranty of: a. merchantability. b. fitness for a particular purpose. c. inspection. d. opinion.

a. merchantability.

Andrea is a famous rodeo competitor. She contracts with Wild Ride Horse Sales to purchase five pedigreed horses, which are designated by their registration numbers. In this contract, identification: a. takes place when the contract is made. b. cannot take place in sales involving live animals. c. takes place when the horses are delivered to Andrea. d. takes place when Andrea pays in full for the horses.

a. takes place when the contract is made.

Kelly, a farmer, tells Farm Fresh Onions, Inc., that he will not be able to deliver the quantity of onions agreed to under the contract. If, before the time for performance has occurred, Farm Fresh Onions has not pursued an alternative source for onions and Kelly contacts Farm Fresh Onions to tell them that he can now perform: a. the repudiation is retracted. b. Kelly is still in breach of contract. c. Farm Fresh Onions does not have to accept his retraction. d. Farm Fresh Onions can still sue for damages.

a. the repudiation is retracted.

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 a. until July 15 to cure. b. no right to cure. c. until the end of the business day on July 13 to cure. d. unlimited time to cure.

a. until July 15 to cure.

Susan agrees to sell Ben a truckload of blankets for $10,000. Susan delivers the blankets to Ben's factory on a Sunday at 4:00 a.m. Seeing no one at the factory, Susan waits for twenty minutes and leaves with the goods. Susan has: a. met her obligation under the contract, and can successfully sue Ben for breach. b. not properly provided tender of delivery. c. properly provided tender of delivery to the buyer's place of business. d. met her obligation under the contract, and Ben must pay any additional delivery costs.

b. not properly provided tender of delivery.

David contracts to purchase seven bulldozers from Jena. Jena manufactures the bulldozers, but David is unable to pay. After notifying David of her intentions, Jena may: a. keep the bulldozers and sue David for the full purchase price. b. resell or dispose of the goods in the open market. c. resell or dispose of the goods to a friend in order to maximize the damages that Jena can claim against David. d. resell the bulldozers, but she must give all profits to David.

b. resell or dispose of the goods in the open market.

James contracts with Zeke to purchase 1,000 cotton tents from a lot that contains 10,000 tents made of cotton, nylon, felt and polyester. If identification is not specifically mentioned in the contract, these tents are identified: a. when the tents are received by James. b. when Zeke marks, ships, or somehow designates them as the goods in the contract. c. 30 days after the tents are received by James. d. when Zeke and James sign the contract.

b. when Zeke marks, ships, or somehow designates them as the goods in the contract.

Collin offers to sell to Phillip an antique chest of drawers worth more than $2,500. Phillip agrees to buy the chest and signs a contract for the purchase. The price of the chest, however, is left out of the contract. Collin and Phillip have: a. no contract, because parties cannot leave the price term out of a valid contract under the Uniform Commercial Code (UCC). b. a valid contract only if Phillip is able to produce evidence that Collin defrauded him. c. a valid contract as long as the court can determine a reasonable price at the time for delivery. d. a valid contract only if Collin refuses to name a price.

c. a valid contract as long as the court can determine a reasonable price at the time for delivery.

Kacey purchases custom windows from Custom Windows, Inc., and wants to ensure that the goods are shipped by common carrier and that title does not pass until the windows are tendered to her address. The contract should specify that it is a: a. warehouse contract. b. shipment contract. c. destination contract. d. carrier contract.

c. destination contract.

Prasanna contracts to buy 10,000 CDs from Louis. Louis ships the CDs to Prasanna. The CDs are exactly as stipulated in the contract and Prasanna accepts them. If Prasanna fails to pay Louis for the CDs, Louis can: a. cure the tender. b. reject the goods. c. file a lawsuit to recover the purchase price. d. cover the sale.

c. file a lawsuit to recover the purchase price.

James routinely sells office supplies to a large retailer under contracts covered by the Uniform Commercial Code (UCC). He is covered by liability insurance for as long as necessary under UCC rules under each contract. James retains an insurable interest in the goods he sells: a. for 90 days or six months. b. until they are sold by the retailer. c. for as long as he retains title to the goods. d. forever.

c. for as long as he retains title to the goods.

Tyler, who runs his business in the United States, enters into a contract with Abigail, a business owner in Australia. Tyler offers to sell factory equipment to Abigail for $30,000. Abigail responds that she will, "take it, but you have to give me a warranty on top of it." Under the CISG, Tyler and Abigail have: a. a contract for the factory equipment only. b. a contract for the factory equipment and the warranty. c. no contract because of the mirror image rule. d. no contract because of the UCC.

c. no contract because of the mirror image rule.

Bart contracts with Stanley to purchase 10,000 boxes of widgets for delivery next month pursuant to a destination contract. Under a destination contract, risk of loss passes when the widgets: a. are created. b. are identified. c. reach the buyer. d. are delivered to the carrier.

c. reach the buyer.

Holly comes into Matthew's bicycle shop to learn about the Easy Ride bicycle she saw in his newspaper ad. Matthew shows her the floor sample of the bicycle and says that it is designed to shift and brake more easily than her current model does. She decides to purchase one. Matthew gets a box from the back of the shop and sells it to her, stating that contains the bicycle Holly wants. Matthew does NOT create an express warranty with his statement that the bicycle inside the box: a. conforms to his promise about the bicycle's shifting and braking ability. b. conforms to his description of the Easy Ride. c. was purchased from a disreputable manufacturer. d. conforms to the floor sample he showed to Holly.

c. was purchased from a disreputable manufacturer.

Randolph contracts to buy a load of high-quality granite rocks for his landscaping company. The contract does not contain any explicit agreements regarding when the passage of title will occur. Under the provisions of the Uniform Commercial Code (UCC) 2-401, the passage of title will occur: a. at the time the contract is made. b. when Randolph pays for the rocks. c. when the seller delivers the rocks to Randolph. d. twenty-four hours after delivery of the rocks.

c. when the seller delivers the rocks to Randolph.

Andrew is a soybean farmer. He has a contract with a cooperative company called Big Beans, Inc. Every year Big Beans agrees to buy all the soybeans that Andrew grows on his farm. Big Beans acquires an insurable interest in Andrew's soybeans: a. when the soybeans are harvested. b. when the contract is made. c. when the soybeans are planted. d. when the soybeans are delivered to Big Beans' warehouse.

c. when the soybeans are planted.

Gabby, an accountant who is planning to move, offers to sell her sofa to her friend Trent, a baker, for $750. Trent says, "I'll take it, and I would like you to throw in the coffee table along with it." Under the Uniform Commercial Code (UCC), Gabby and Trent have: a. a contract for the sofa and coffee table. b. no contract, because of the mirror image rule. c. no contract because Gabby did not accept the counteroffer. d. a contract for the sofa only.

d. a contract for the sofa only.

Richie goes to Buster's Trailers to purchase a trailer. He tells Buster that he plans to use the trailer to haul fish from the ocean to his wholesalers. The sales contract has a disclaimer in large, boldface type, "Trailers sold with no warranties of merchantability or of fitness for a particular purpose." Richie signs the contract. The fish slosh around in the trailer and are killed and worthless by the time they get to market. When Richie sues Buster for his losses, the disclaimer will: a. be allowed, but because Richie used the trailer for a particular purpose Richie will likely prevail. b. not be allowed because it is fraudulent; merchants may not disclaim liability. c. not be allowed, and Richie will most likely prevail because Buster, a merchant, had a duty to advise against using a trailer. d. be allowed, and Richie will most likely not prevail.

d. be allowed, and Richie will most likely not prevail.

Bart orders 20,000 Class A widgets from Salvatore. Salvatore promptly ships to Bart 20,000 Class B widgets instead. Under the Uniform Commercial Code (UCC), Salvatore has: a. not accepted the contract. b. accepted the contract and not breached the contract. c. made a counteroffer to Bart's offer. d. both accepted and breached the contract.

d. both accepted and breached the contract.

Adele decides to purchase several silver tea sets from Vaughn's gift store. In their sales contract, Adele and Vaughn do not specify how many silver tea sets Adele will purchase. They now have: a. a valid contract with an open delivery term. b. a valid contract with an open price term. c. a valid output contract. d. no contract at all.

d. no contract at all.