Practice test chapter 21
Fruit of the Plant, Inc., agrees to sell a certain quantity of a high-quality grain seed to Grange Co-op. Fruit of the Plant can obtain only half of the quantity ordered, so the seller also ships a lesser quality seed in twice the amount of the remainder of the order for the same price. Grange Co-op rejects the lesser quality seed. With time for performance not yet expired, Fruit of the Plant can a. attempt to cure the defect. b. recover the amount of its expected profit plus incidental damages. c. cancel the contract. d. resell or dispose of the seed and hold Grange Co-op liable for any loss.
a. attempt to cure the defect.
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. $500. b. $0. c. $1,500. d. $1,000.
a. $500.
Game Source Stores are open to consumers. The UCC requirement of good faith imposes a. a higher duty on Game Source than on consumers. b. no duty on either Game Source or consumers. c. the same duty on Game Source and consumers. d. a higher duty on consumers than Game Source
a. a higher duty on Game Source than on consumers.
Asian Noodle Company contracts to sell 1,000 cases of rice noodles to Bob's Bistros, Inc., but refuses to deliver. Bob's right to obtain substitute goods for those that were due under the contract is the right to obtain a. cover. b. tender. c. cure. d. specific performance
a. cover.
Minerals Ltd. contracts to provide several manufacturers with tin. When a cartel of tin-producing countries suddenly embargoes future shipments of tin to Minerals so that it cannot fulfill its contracts, the distributor a. is excused from the performance of its contracts. b. can substitute some other material for the tin. c. must still supply the tin needs of its customers. d. is liable for breach of contract.
a. is excused from the performance of its contracts.
Speedy's Auto Parts orders twenty tires from Tough Tires, Inc. Ten of the tires are delivered in a damaged condition. Speedy's a. may accept the shipment with a reduction in price. b. must pay for all of the tires at the contract price. c. cannot reject the entire shipment. d. must reject the entire shipment.
a. may accept the shipment with a reduction in price.
Tarts & Pies Bakery contracts with Sweet Fruits for strawberries to be delivered by Refrigerated Trucking Company. On the day of delivery, the refrigeration on the trucks is not working. Sweet Fruits a. may ship the strawberries to the buyer using a different carrier. b. must cancel the contract. c. must wait to ship the strawberries until the carrier fixes its trucks. d. must ship the goods through a different carrier and pay damages
a. may ship the strawberries to the buyer using a different carrier.
Oh! Wow! Markets, Inc., rejects a shipment of non-perishable canned turkey that does not conform to its contract with Poultry Processing Corporation, but is unable to obtain instructions from the seller. Oh! Wow! Markets can a. reship or store the goods for the seller. b. cure the goods to make them conform to the contract. c. destroy the goods. d. retain the goods without paying for them.
a. reship or store the goods for the seller.
Refined Mills orders "Grade A" oats from Sweet Valley Farm to grind and sell to Town Co-op Grocery. Sweet Valley ships "Grade B" grain, which Refined Mills accepts. To recover damages for the nonconformity, Refined Mills must give notice of the breach within a reasonable time to a. Town Co-op. b. Sweet Valley. c. no one. d. the appropriate state government agency.
b. Sweet Valley.
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. must reject the entire shipment. b. can reject the entire shipment. c. must accept the entire shipment. d. cannot reject the entire shipment.
b. can reject the entire shipment.
Business Rental Corporation (BRC) and Cartage Trucking Company enter into a contract for a lease of ten hydraulic lifts. Under the perfect tender rule, BRC must ship or tender goods to the lessee that a. entirely conform to the contract description except in one or two details. b. conform to the contract description in every way. c. approximately conform to the contract description. d. substantially conform to the contract description in most details.
b. conform to the contract description in every way.
Pine Mills Inc. and Quality Lumber Company enter into a contract for a sale of plywood to be delivered under a destination contract. This contract requires Pine Mills, the seller, to a. allow the buyer to reject the goods for any reason. b. deliver the goods to a particular destination. c. place the goods into the hands of a carrier. d. inspect the goods before tendering their delivery
b. deliver the goods to a particular destination.
Medical Supply Company and Health Care, Inc., enter into a contract for a sale of medical equipment and supplies. Under either a shipment contract or a destination contract, the seller must a. allow the buyer to reject the goods for any reason. b. give the buyer any necessary documents of title. c. place the goods into the hands of a carrier. d. deliver the goods to a particular destination
b. give the buyer any necessary documents of title.
Beef Burgers, Inc. contracts to buy five hundred head of cattle from Cattle Ranch. Before the seller delivers, an outbreak of disease causes a quarantine of the ranch. In this circumstance, the perfect tender rule a. applies to both parties. b. no longer applies. c. applies only to Beef Burgers. d. applies only to Cattle Ranch.
b. no longer applies.
Hydro Source Company contracts to sell pumps, tanks, and water storage systems to InFlo Irrigation, Inc. Before the goods are delivered, InFlo indicates that it will not be able to pay. Hydro Source can pursue the following relief a. require InFlo to find a buyer for the goods. b. resell the goods and recover any damages from InFlo. c. None of these answers are correct. d. force InFlo to accept and pay for the goods.
b. resell the goods and recover any damages from InFlo.
TackMaker, Inc., and Silver Stallion Stables enter into a contract for a sale of bridles, saddlery, and other equine equipment. TackMaker delivers, but Silver Stallion does not pay. TackMaker can normally recover as damages a. whatever amount the seller wishes to claim. b. the purchase price plus incidental damages. c. any profit lost minus any loss avoided. d. the market price at the place at which the seller delivered the goods.
b. the purchase price plus incidental damages.
Natural Eggs, Inc. agrees to supply Omelet Express with five hundred eggs. Natural Eggs can not reasonably ask Omelet Express to pick up the eggs at a. 2:00 p.m. b. 1:00 p.m. c. 2:00 a.m. d. 3:00 p.m.
c. 2:00 a.m.
Bayou Boats, Inc., contracts for the sale of seven swamp boats to Eventide Fishing Tours. Bayou repudiates the contract. Eventide's recovery is measured at the time a. Bayou advertised the goods. b. Eventide ordered the goods. c. Eventide learned of the breach. d. Bayou knew that it would repudiate the contract.
c. Eventide learned of the breach.
Clear View Company, which is based in Delaware, agrees to sell fifty windows, currently stored in Florida, to Far Sight, Inc., which is based in Hawaii. Absent an agreement to the contrary, the place of delivery is in a. California. b. Delaware. c. Florida. d. Hawaii
c. Florida.
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. to the best of the lessor's ability under the circumstances. b. to a reasonable extent. c. in every way. d. to a substantial degree
c. in every way.
Field Farms and Gourmet Restaurant enter into a contract for a sale of produce. After Field Farms ships the lettuce but before the restaurant receives it, the buyer declares bankruptcy. The seller can stop delivery of the goods in transit a. only if the quantity is in a single "unit." b. only if the quantity is at least 50 percent of the contract amount. c. regardless of the quantity. d. only if the quantity is at least a truckload.
c. regardless of the quantity.
On May 1, Garage Prefabricators, Inc., agrees to sell four portable garages to Hiway Truck Service Center. Five days later, Hiway refuses delivery and cancels the contract. Garage Prefabricators is entitled to a. force Hiway to accept the garages. b. recover any damages from Hiway but not resell the garages. c. resell the garages and recover any damages from Hiway. d. resell the garages but not recover any damages from Hiway.
c. resell the garages and recover any damages from Hiway.
Fact Pattern 22-1 Daily Bread Bakeries, Inc., contracts to buy all of its ingredient requirements for bread making, at a certain minimum per year, from Enriched Flour & Grain Corporation for six years. After three years, Daily Bread tells Enriched that it plans to sell its assets to Flat Bread Shops, Inc. Flat Bread refuses to assure Enriched that it will continue Daily Bread's contract. Refer to Fact Pattern 22-1. Enriched can pursue the following relief a. assign its rights under the contract but cannot terminate it. b. None of these answers are correct. c. terminate the contract and seek damages. d. suspend performance under the contract until Enriched is fully paid
c. terminate the contract and seek damages.
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 actual price and the hoped-for price. c. the contract price and the market price. d. the current prices in the parties' locations.
c. the contract price and the market price.
Dairy Goods agrees to sell a certain quantity of ice cream to Event Caterers, but their contract does not specify the address at which the goods are to be delivered. Event Caterers is aware that Dairy Goods stores its ice cream at Creamy Warehouse. If the parties fail to specify the address before the delivery date a. the seller Dairy Goods must deliver the ice cream to Event Caterers' address. b. the ice cream must be delivered by Dairy Goods to a neutral location, and Dairy Goods must promptly notify Event Caterers of the location. c. the seller Event Caterers must pick up the ice cream at Creamy Warehouse. d. the contract is canceled.
c. the seller Event Caterers must pick up the ice cream at Creamy Warehouse.
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. unlimited time to cure. b. no right to cure. c. until July 15 to cure. d. until the end of the business day on July 13 to cure
c. until July 15 to cure.
Elegant Carpets, Inc., and Fantastic Floors Stores enter into a contract for a sale of carpeting to be delivered under a shipment contract. This contract requires Elegant Carpets, the seller, to a. allow the buyer to reject the goods for any reason. b. deliver the goods to a particular destination. c. inspect the goods before shipping them. d. place the goods into the hands of a carrier
d. place the goods into the hands of a carrier
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. Go-Flo's place of business. b. the current location of the hose couplings and fittings. c. the U.S. Postal Service office nearest to Go-Flo's place of business. d. Fuel Connector's place of business.
d. Fuel Connector's place of business.
Fact Pattern 22-1 Daily Bread Bakeries, Inc., contracts to buy all of its ingredient requirements for bread making, at a certain minimum per year, from Enriched Flour & Grain Corporation for six years. After three years, Daily Bread tells Enriched that it plans to sell its assets to Flat Bread Shops, Inc. Flat Bread refuses to assure Enriched that it will continue Daily Bread's contract. Refer to Fact Pattern 22-1. Flat Bread's refusal is a. an assignment of Daily Bread's rights under the contract. b. a breach of the original contract between Enriched Flour and Daily Bread. c. a reasonable suspension of performance under the contract. d. a repudiation of the contract
d. a repudiation of the contract
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 await Soft's performance for a commercially reasonable time. b. only suspend its own performance. c. only sue Soft for breach of contract. d. await performance, sue Soft, or suspend its own performance.
d. await performance, sue Soft, or suspend its own performance.
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. asks to be paid. b. verifies that the buyer has the money to pay for the purchase. c. enters into the contract with the buyer. d. complies with the terms and conditions of the letter of credit.
d. complies with the terms and conditions of the letter of credit.
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. consider the contract repudiated and sue the seller for breach. b. buy the equipment from a different firm and bill Excavation for the price. c. buy the equipment from a different firm and bill the seller for the price. d. demand assurances of performance from the seller.
d. demand assurances of performance from the seller.
ABC Toy Store orders one hundred board games from Big Board Games Inc. When the games are delivered, they are all missing pieces. ABC rejects the shipment. To cure, Big Board Games must a. enter into a new contract with Axel's. b. pick up the nonconforming games before the end of the business day. c. pay a cure fee. d. promptly notify ABC of the intent to cure.
d. promptly notify ABC of the intent to cure.
Precious Stones, Inc., and Sparkling Jewelry stores enter into a contract for a sale of gemstones. Precious Stones does not deliver. The buyer can normally recover as damages the difference between a. any loss avoided and any profit gained. b. the actual price and the hoped-for price. c. the current prices in the parties' locations. d. the contract price and the market price.
d. the contract price and the market price.
River Gear Company and Scenic Trips, Inc., enter into a contract on August 1 for the sale of fifty inflatable river rafts. Scenic cancels the contract ten days later, before the goods have been delivered. River Gear's available remedies include all of the following except a. the right to cancel the contract. b. the right to resell or dispose of the goods. c. the right to withhold delivery. d. the right to replevy the goods.
d. the right to replevy the goods.