Law 2 - Chapter 16 Practice Quiz

Bailey accepted delivery of a television that he purchased on credit from ABC Company. Later, ABC Company discovered that Bailey is insolvent. ABC Company can demand return of the television if the demand is made within: a. 10 days of Bailey's receipt of the television. b. 6 months of Bailey's receipt of the television. c. 1 year of Bailey's receipt of the television. d. 30 days of Bailey's receipt of the television.

a. 10 days of Bailey's receipt of the television.

Inspection of goods can take place at any reasonable place and time and in any reasonable manner. Generally, what is reasonable is determined by: a. custom of the trade or past practices of the parties. b. a court of law. c. None of these choices. d. future agreed-to terms of the parties.

a. custom of the trade or past practices of the parties.

Consequential damages are special damages that compensate for indirect losses (such as lost profits) resulting from a breach of contract. For the non-breaching party to recover consequential damages, these damages must be: a. reasonably foreseeable. b. written in the contract per the statute of frauds. c. All of these choices. d. negotiated between buyer and seller.

a. reasonably foreseeable.

The commercial impracticability exception to the perfect tender doctrine extends only to problems: a. that could not have been foreseen. b. that prevent delivery of any installment of the goods. c. in which the identified goods were destroyed. d. caused by a natural disaster.

a. that could not have been foreseen.

If a contract does not designate the place of delivery, then the goods must be made available to the buyer at: a. the seller's place of business. b. the post office closest to the buyer. c. the buyer's residence. d. the buyer's place of business.

a. the seller's place of business.

Murray, the buyer, breaches a contract with Rashad, the seller. Rashad notifies Murray that the contract is cancelled. In this situation: a. Rashad must hold the goods for a reasonable time to give Murray an opportunity to retract. b. Rashad can still pursue remedies against Murray for breach. c. Murray may retract at any time. d. all of Murray's remaining obligations under the contract are discharged.

b. Rashad can still pursue remedies against Murray for breach.

Averill Company agrees to sell a printing press to Zenon Corporation. The contract limits Zenon's remedy to repair or replacement of any defective parts. This remedy is an example of: a. a consequential remedy. b. an exclusive remedy. c. an unconscionable remedy. d. a specific performance remedy.

b. an exclusive remedy.

The standards that provide the framework for every contract are: a. legality and commercial reasonableness. b. good faith and commercial reasonableness. c. good faith and enforceability. d. legality and enforceability.

b. good faith and commercial reasonableness.

All costs resulting from a breach of contract, including all reasonable expenses incurred because of the breach, are called: a. consequential damages. b. incidental damages. c. compensatory damages. d. punitive damages.

b. incidental damages.

If a seller fails to deliver the goods, the buyer may purchase the goods from another seller to substitute for those due under the contract. This remedy for breach is called: a. right of specific performance. b. right of cover. c. right of repudiation. d. right of revocation.

b. right of cover.

The seller has the right to stop delivery of the goods until the time when: a. the buyer obtains possession of the goods. b. the carrier acknowledges the rights of the buyer in the goods. c. All of these choices. d. a negotiable document of title covering the goods has been properly transferred to the buyer.

c. All of these choices.

When the seller or lessor refuses to deliver the goods, the remedies available to the buyer or lessee include the right to: a. sue to obtain damages. b. sue to obtain specific performance. c. All of these choices. d. cancel the contract.

c. All of these choices.

Under the UCC, a contract that requires or authorizes delivery in two or more separate lots to be accepted and paid for separately is: a. a carrier contract. b. a shipment contract. c. an installment contract. d. a destination contract.

c. an installment contract.

An action for breach of contract under the UCC must be commenced within: a. eight years after the cause of action accrues. b. ten years after the cause of action accrues. c. four years after the cause of action accrues. d. five years after the cause of action accrues.

c. four years after the cause of action accrues.

When the seller or lessor delivers nonconforming goods, the buyer or lessee may: a. accept the goods, and later exercise the right of rejection. b. All of these choices. c. reject the goods. d. accept the goods, thereby giving up the right to recover damages.

c. reject the goods.

A seller's or lessor's act of placing conforming goods at the disposal of the buyer or lessee and giving the buyer or lessee whatever notification is reasonably necessary to enable the buyer or lessee to take delivery is called: a. acceptance of delivery. b. delivery. c. tender of delivery. d. secured delivery.

c. tender of delivery.

Unless the parties otherwise agree, the buyer or lessee has an absolute right to inspect the goods: a. after acceptance. b. before signing the contract. c. after shipment. d. before making payment.

d. before making payment.

A buyer who has accepted nonconforming goods may keep the goods and recover damages caused by the breach. In addition to incidental and consequential damages, the buyer is entitled to damages equal to: a. the value of the goods if they had been delivered as warranted. b. the value of the goods as accepted. c. the value of the goods as accepted plus their value if they had been delivered as warranted. d. the difference between the value of the goods as accepted and their value if they had been delivered as warranted.

d. the difference between the value of the goods as accepted and their value if they had been delivered as warranted.

In the performance of a sales or lease contract, the basic obligation of the seller or lessor is to: a. accept and pay for conforming goods. b. offer conforming goods. c. produce conforming goods and price them fairly. d. transfer and deliver conforming goods.

d. transfer and deliver conforming goods.