UCC Sales -Article 2
1)On April 15, a wholesaler of tulip bulbs telephoned a local nursery and offered to sell to the nursery 80 gross of tulip bulbs for $8,000, not including delivery charges. The nursery accepted immediately. On April 17, the nursery sent the wholesaler a letter confirming the deal for the sale of 80 gross of tulip bulbs for $8,000, and stating that it anticipated a waiver of the delivery charges because of the size of the order. On May 3, the wholesaler telephoned the nursery and stated that, due to a poor growing season for tulips, it would not be able to supply any tulip bulbs to the nursery. If the nursery brings suit against the wholesaler and the wholesaler asserts the Statute of Frauds as a defense, will the nursery prevail? (A) Yes, because its April 17 letter contained the quantity term. (B) Yes, because its April 17 letter contained the quantity term and the price term. (C) No, because the nursery 's April 17 letter varied the terms of the wholesaler's offer. No statute of fraud issues (D) No, because the wholesaler is the party to be charged and has signed nothing.
(A) Yes, because its April 17 letter contained the quantity term.
The order department of a machine tools manufacturing company received a phone call from a factory owner who placed an order for two of the company's standard "Type-A" machines. The factory owner and the company came to an oral agreement whereby the total price for both machines was agreed to be $10,000. The first machine was to be delivered on May 1, with payment of $5,000 due 30 days after delivery, and the second machine was to be delivered on June 1 on the same terms (payment of $5,000 due 30 days after delivery). Although the company did not carry the machine in stock, no retooling was required because the Type-A machine was a standard model. The first machine was duly delivered on May 1. The second machine arrived on June I, but the factory owner refused to accept delivery and also refused to pay for the first machine. The company sued the factory owner on June 2. Assume that it cost the company $3,000 to manufacture each Type-A machine, and that the company could resell the machine for only $3,000. What damages should be awarded aside from any incidental damages? (A) $3,000. (B) $5,000. (C) $7,000. (D) $10,000.
(B) $5,000
On February 15, 1984, The Alumalloy Co., a manufacturer of metal sidings for home exteriors, received the following Westside Construction Co.: "Please ship 300 sheets if ¼ refabricated aluminum siding. Delivery by April 1, 1984. On March 8, 1984, The Alumalloy Co. (hereinafter referred to as Alumalloy) shipped 300 sheets of 1/2" refabricated aluminum siding which were received by Westside Construction Co. (hereinafter referred to as Westside) on March 10, 1984. The following day, Dave Shell, owner of Westside, sent the following wire to Timothy Trister, Alumalloy's president: "Be advised that your shipment is rejected. Order stipulated 1/4" sheets." This was received by Trister on March 13, 1984. Westside, however, did not ship the nonconforming aluminum sheets back to Alumalloy. On March 14, 1984, Trister sent the following telegram to Shell: "Will ship conforming ¼" aluminum sheets before April 1, 1984." This telegram was received by Shell on March 15, 1984, but he did not respond to it. On March 27, 1984, Alumalloy tendered 300 sheets of 1/4' refabricated aluminum siding to Westside, which the latter refused to accept. Did Westside properly reject the aluminum sheets delivered on March 27, 1984? (A) No, because under the UCC a contract for sale of goods can be modified without consideration. (B) No, because Alumalloy cured the March 8th defective shipment by its tender of conforming goods on March 27th. (C) Yes, because Alumalloy's shipping of the ½" sheets on March 8th constituted an anticipatory breach. (D) Yes, because Alumalloy's shipping of the ½" sheets on March 8th constituted a present breach of contract.
(B) No, because Alumalloy cured the March 8th defective shipment by its tender of conforming goods on March 27th.
An electronics store located in Los Angeles, California, purchases electronics from an electronics corporation located in San Antonio, Texas. On January 19, the electronics store mailed to the corporation an order for $200,000 worth of electronics, specifying that delivery was to be no later than February 25, F.O.B. South Texas Railroad Depot, San Antonio, Texas. The corporation delivered the electronics to the railroad depot on February 15 and notified the electronics store by fax that its order was scheduled to arrive at the Southern Pacific Railroad Depot in Los Angeles on February 20. On February 17, the electronics were stolen from the South Texas railroad car while stopped at an interim stop. Who bears the risk of loss of the electronics? (A) The Texas electronics store. (B) The California electronics store. (C) The railroad (D) The Texas electronics store to the extent of their insurance
(B) The California electronics store.
3)On August 10th, The Clip Joint, a retail stationery store, sent the following purchase order to American Office Supply Company (hereafter referred to as American), a wholesaler of office supply equipment: "Please ship immediately 24 pairs (two dozen) 3 ½ inch, right-handed scissors at your current list price of $4 per pair." American received this purchase order on August 12th. The day, Sam Shipley, American's shipping clerk, ascertained that there were only 18 pairs of 3 ½ inch, right-handed scissors in stock. Shipley, however, found that American had 6 pairs of 3 ½ inch, left-handed scissors in stock. Without notifying The Clip Joint, Shipley went ahead and shipped the 18 pairs of right-handed scissors along with the 6 pairs of left-handed scissors to the stationery store. The Clip Joint was aware that the wholesale price for the left-handed scissors was $3 per pair, or $1 less than the list price for the right-handed scissors. Which of the following is the most accurate statement regarding The Clip Joint's legal rights following receipt of the scissors? (A) The Clip Joint may either accept or reject all of the scissors upon seasonable notice to American, but it cannot accept only the right-handed scissors without American's approval. (B) The Clip Joint may either accept or reject all of the scissors, or accept any combination of right- or left-handed pairs and reject the rest, but must give American seasonable notice of either total or partial rejection (C) . The Clip Joint may either accept or reject all of the scissors, or accept the right-handed pairs and reject the left-hand pairs, but it cannot accept any combination of the two pairs. (D) The Clip Joint may either accept or reject all of the scissors, or, provided American seasonably gave notice that the shipment was made for accommodation only. The Clip Joint may accept any combination of right- and left-handed scissors and reject the rest.
(B) The Clip Joint may either accept or reject all of the scissors, or accept any combination of right- or left-handed pairs and reject the rest, but must give American seasonable notice of either total or partial rejection
2)The owner of an art gallery entered into a written contract with an avid art collector whereby the art collector agreed to buy and the gallery owner agreed to sell for $7,500 any painting in the gallery by artist Alpha. The contract was to be executed on July 6 according to its written terms. The art collector went to the gallery on July 6 with a certified check in the amount of $7,500. The art collector pointed out a painting by a different artist hanging on the wall, and told the gallery owner that that was the painting he wanted, and that he would also take its old-fashioned $250 gilt frame to go with it. The gallery owner responded that the painting was by the artist Beta, but that the art collector could have it with the frame if he was willing to pay $250 extra for it. This enraged the art collector, and he filed suit against the gallery owner, asserting in his pleading that he remains able and willing to tender $7,500 to the gallery owner. He also asserts that prior to signing the contract, the parties agreed orally that the art collector could have a painting by Beta for the same price in lieu of one by Alpha, and that the gallery owner would throw in the frame for whatever painting he chose. The gallery owner denied that any such conversation took place. There are no other witnesses. The court should allow the art collector to testify regarding: (A) The oral agreement for the painting, but not the oral agreement for the frame. (B) The oral agreement for the frame, but not the oral agreement for the painting. (C) Both the oral agreement for the painting and the oral agreement for the frame. (D) Neither the oral agreement for the painting nor the oral agreement for the frame.
(B) The oral agreement for the frame, but not the oral agreement for the painting.
2)The owner of an old car parked it in front of his house with a "for sale" sign in the wind shield. In response to an inquiry from his neighbor, the car owner said that he would take $400 for the car. The neighbor responded, "You've got a deal." Because it was a Sunday, and the banks were closed, the neighbor told the car owner that he would come to his house with the $400 the next day at about 6p.m. The car owner said that was fine. At 9:15 the next morning, the car owner called his neighbor and told him that when they had talked the previous day, he forgot that he had just put two new tires on that car and that he would need an extra $50 to cover their cost. The neighbor agreed to bring $450 in cash to the car owner's house at about six o'c1ock. Is the neighbor legally bound to pay the car owner the additional $50? (A) Yes, because the original contract was not in writing. (B) Yes, because the contract, as modified, does not need to be in writing. (C) No, because no additional consideration was given for the oral modification. (D) No, because neither the neighbor nor the car owner is a merchant.
(B) Yes, because the contract, as modified, does not need to be in writing.
A hardware store ordered 200 cans of wood stain in various shades. The written contract between the store and manufacturer provided that 100 cans of stain would be delivered on April 30, and the remaining 100 cans would be delivered on June 30. Payment would be due at the time of each delivery. The first shipment arrived on April 30. Sales of the stain were brisk, but 25 customers almost immediately returned their stain, complaining that it was not the color indicated on the can. The store owner called the manufacturer and informed it of the problem. The manufacturer truthfully told the owner that they had had a small problem with their labeling machine and a few cans in the store owner's lot must have been mislabeled before they caught the problem. The manufacturer offered to replace all 100 cans from the original order. The store owner refused the offer and told the manufacturer not to deliver the second lot, because he could no longer trust the manufacturer. The owner was very sensitive to the hardware store's good reputation, which he felt was harmed by this incident. If the manufacturer brings a claim of breach regarding the second shipment which was due on June 30, the court will find that: (A) The buyer had the right to cancel the second shipment, because of legitimate fears that it would contain the same defects as the first shipment. (B) The buyer had the right to cancel the second shipment, because the first delivery was defective. (C) The buyer did not have the right to cancel the second shipment, because the defects in the first shipment did not substantially impair the value of the entire contract. (D) The buyer did not have the right to cancel the second shipment, because he failed to make a demand upon the manufacturer for adequate assurances that the second shipment would be free of defects.
(C) The buyer did not have the right to cancel the second shipment, because the defects in the first shipment did not substantially impair the value of the entire contract.
1)On April 1, a music store offered to sell a rare piano to a concert pianist for $100,000. The following day, the pianist wrote to the store owner: "I have decided to purchase the piano. A check for $100,000 is enclosed. I am leaving for Canada for six months and will pick up the piano when I return. I will pay you to store the piano in an air- conditioned warehouse." The letter that the pianist wrote to the store owner is: (A) A counteroffer, because it changes the terms of the offer. (B) A rejection of the offer. (C) An acceptance, and the store owner must store the piano but is entitled to the reason able value of that service. (D) An acceptance, and the store owner is not bound to store the piano.
(D) An acceptance, and the store owner is not bound to store the piano.
A widget manufacturer entered into a written agreement with a retailer to sell the retailer 500 widgets for a total price of $10,000. Prior to the date set for execution of the contract, the price of the raw material essential to manufacture of widgets had soared because of a civil war in the country that produces 80% of the world supply of the material. The manufacturer informed the retailer that it would now cost $11,000 to manufacture the widgets and requested that the contract price be adjusted to $12,000 for the 500 widgets. The retailer agreed orally to pay the $12,000, but no written confirmation was exchanged between the parties. (need answer) May the manufacturer enforce his demand for an additional $2,000 in a court of law? (A) No, because of the parol evidence rule. (B) No, because of the Statute of Frauds. (C) Yes, because the parol evidence rule would allow evidence of a changed price term, as it is material to the contract. (D) Yes, because a subsequent modification can also be a waiver after the initial agreement.
(D) Yes, because a subsequent modification can also be a waiver after the initial agreement.
On February 15, 1984, The Alumalloy Co., a manufacturer of metal sidings for home exteriors, received the following Westside Construction Co.: "Please ship 300 sheets if ¼ refabricated aluminum siding. Delivery by April 1, 1984. On March 8, 1984, The Alumalloy Co. (hereinafter referred to as Alumalloy) shipped 300 sheets of 1/2" refabricated aluminum siding which were received by Westside Construction Co. (hereinafter referred to as Westside) on March 10, 1984. The following day, Dave Shell, owner of Westside, sent the following wire to Timothy Trister, Alumalloy's president: "Be advised that your shipment is rejected. Order stipulated 1/4" sheets." This was received by Trister on March 13, 1984. Westside, however, did not ship the nonconforming aluminum sheets back to Alumalloy. On March 14, 1984, Trister sent the following telegram to Shell: "Will ship conforming ¼" aluminum sheets before April 1, 1984." This telegram was received by Shell on March 15, 1984, but he did not respond to it. On March 27, 1984, Alumalloy tendered 300 sheets of 1/4' refabricated aluminum siding to Westside, which the latter refused to accept. Did Westside properly reject the first shipment delivered on March 10, 1984? A) Yes, because the aluminum sheets were nonconforming goods. B) Yes, because Alumalloy did not notify Westside that the ½" sheets were for accommodation only. C) No, because Westside waived its right to reject the non-conforming goods by not returning them promptly to Alumalloy. D) No, because Alumalloy could not accept Westside's offer by prompt shipment of either conforming or nonconforming goods.
A) Yes, because the aluminum sheets were nonconforming goods.
1. A buyer contracted to purchase a used car from a seller for $10,000. On the date the sale was to take place, the buyer tendered a $10,000 cashier's check to the seller. The seller rejected the tender of the $10,000 cashier's check and refused to deliver the car to the buyer. If the buyer brings an action for breach of contract against the seller, the buyer is entitled to which of the following remedies? A. Damages measured by the difference between the market price and the contract price for the car. B. Recovery of the contract price of the car. C. Specific performance. D. Recovery of the market price of the car.
A. Damages measured by the difference between the market price and the contract price for the car.
1. In a written contract, a seller agreed to deliver to a buyer 1,000 widgets at a stipulated price of $10 each, FOB at the seller's place of business. On March 1, the seller placed the widgets on board a cargo vessel that was destined to transport the widgets to the buyer. On March 2, the buyer received the following telegram from the seller: "Please be advised that the widgets are in transit." The next day, the ship carrying the widgets sank in a violent storm, destroying its entire cargo. If the buyer brings an appropriate action against the seller, the former will most likely recover A. Nothing, because the buyer bears the loss. B. Nothing, because the buyer never received the widgets. C. The contract price of $10,000 D. The difference between the contract price and the market value of the widgets.
A. Nothing, because the buyer bears the loss.
1. On January 1, a manufacturer of widgets received an e-mail from a widget distributor about purchasing widgets. The manufacturer sent the following return e-mail: "Have 1,000 widgets available at $10 each for February delivery. Be advised that this offer will remain open until February 1. On January 31, the distributor sent the following fax to the manufacturer: "Your offer is hereby accepted, but request delivery of 500 widgets in February and 500 widgets in March." The manufacturer received the fax the same day, but did not respond. Which of the following is the most accurate statement regarding the legal effect of the distributor's January 31 fax? A. It constitutes a counteroffer, because it contains different terms from those contained in the original offer. B. It constitutes a rejection because the offer limited acceptance to the terms contained therein. C. It creates an enforceable contract with delivery of 500 widgets in February and delivery of 500 widgets in March. D. It creates a modification to the contract subject to acceptance by the seller.
C. It creates an enforceable contract with delivery of 500 widgets in February and delivery of 500 widgets in March.
1. A store owner placed an order by phone from a wholesale supplier for "three dozen pairs of purple cashmere socks." The supplier orally accepted the order at the agreed price of $250 per dozen. The supplier then mailed a signed and dated letter that confirmed the purchase of "36 dozen pairs of purple cashmere socks at the agreed price of $250 per dozen." The owner received the letter but did not notice the "36 dozen socks" wording. Three weeks later he received 36 dozen socks, which he rejected on the grounds that he had only ordered three dozen. The supplier resold the socks for a lower price and sued the owner for the difference. May the store owner successfully assert the Statute of Frauds as a defense? A. Yes, because the store owner never signed a written document as required by the Statute of Frauds for a contract like this for more than $500. B. Yes, because the agreed price for three dozen socks was over $500, and the supplier's written memo incorrectly stated the quantity of goods ordered. C. No, because the supplier's written memo was sufficient to satisfy the Statute of Frauds as against the supplier, and the owner, having reason to know of the memo's contents, failed to give notice of objection within 10 days of receipt. D. No, because the supplier's written memo operated as an acceptance with a proposal for different terms that may or may not be accepted by the owner.
C. No, because the supplier's written memo was sufficient to satisfy the Statute of Frauds as against the supplier, and the owner, having reason to know of the memo's contents, failed to give notice of objection within 10 days of receipt.
1. A manufacturer of widgets entered into a written agreement to deliver 500 widgets to a buyer. The contract provided that the widgets would be shipped C.O.D. The manufacturer subsequently delivered 490 widgets, which were accepted and paid for by the buyer. If the buyer brings suit for breach of contract against the manufacturer, the buyer will most likely A. Not recover, because under circumstances the manufacturer sufficiently performed. B. Not recover, because the buyer accepted delivery of the 490 widgets. C. Recover, because the manufacturer failed to perform his contractual obligation. D. Recover, because the manufacturer's failure to deliver the additional widgets did not result in a material breach.
C. Recover, because the manufacturer failed to perform his contractual obligation.
1. On September 1, a buyer contracted to buy 1000 widgets from a seller at $10 per widget, delivery to take place on or before September 15. On September 5, the buyer discovered that another widget seller was selling widgets for $8 per widget. The buyer then sent the following letter to the seller: "Please cancel our order for 1000 widgets. Your price is too high. We have found another supplier at a cheaper price." On receipt of this letter, the seller would be legally justified in pursuing which of the following courses? A. Shipping the widgets to the buyer. B. Sue for the price of the widgets. C. Selling the widgets to another buyer by means of either a public or private sale. D. Selling the widgets to another buyer, but only if the seller is successful in whatever claims it has against the buyer.
C. Selling the widgets to another buyer by means of either a public or private sale.
A coin collector agreed to purchase a mint rare coin from a seller for $10,000. The contract stipulated that delivery would be "F.O.B at the collector's establishment." When the collector received the coin, she noticed a large scratch across the face, but accepted delivery anyway. Two weeks later the collector sold the coin to a friend for $12,000. Who should recover, and in what amount? A. Neither party. B. The collector, for nominal damages. C. The seller, for $10,000. D. The seller, for $12,000.
C. The seller, for $10,000.
1. A supermarket signed a contract with a bakery to provide the supermarket with 100 loaves of whole wheat bread per week for 12 consecutive weeks. The loaves were to be delivered on the first day of each week, with payment to be made within four days of delivery. For the first four weeks, the bakery delivered loaves to the supermarket and the supermarket made the appropriate payments. When the fifth delivery arrived, the supermarket discovered that the shipment contained 80 whole wheat loaves and 20 sourdough loaves. The manager of the supermarket immediately called the bakery to complain about the shipment. The operator of the bakery apologized and offered to send 20 loaves of whole wheat bread within 24 hours. What is the probable legal effect of the operator's conversation with the manager with regard to the fifth shipment? A. The supermarket would have the right to reject the fifth shipment and cancel their contract. B. The supermarket would have the right to reject the fifth shipment, but would be held liable for the remaining deliveries. C. The supermarket would not be entitled to reject the operator's offer to "cure". D. The supermarket would have a right to "cover" by purchasing substitute loaves of bread.
C. The supermarket would not be entitled to reject the operator's offer to "cure".
1. A bookstore entered into an oral contract to purchase from the publisher 100 copies of the latest edition of a certain textbook for $3 per book. Three days after the contract was formed, but prior to delivery of the textbooks, the publisher called the owner of the bookstore and informed him that, because of a calculation error, the price for the textbook should have been $13 per book, and the shipment could not be delivered unless the owner promised to pay that amount. The owner reluctantly agreed. The owner's agreement to pay $13 per book is A. Enforceable, even though it was not supported by any new consideration. B. Enforceable, under the principle of promissory estoppel. C. Unenforceable, because it violates of the statute of frauds. D. Unenforceable, because the error resulted from the publisher's computational error.
C. Unenforceable, because it violates of the statute of frauds.
1. On September 1, a manufacturer of portable drinking fountains mailed to a drinking fountain retailer a signed offer that stated: "Have 200 drinking fountains available at $100 each for October delivery. Be advised that this offer will remain open until October 1." On September 30, the retailer faxed the following letter, which was received by the manufacturer on October 1: "Your offer is hereby accepted." However, on September 29, the manufacturer sent a fax to the retailer revoking its offer, which was received the same day. This revocation is A. Valid, because the retailer had not changed its position in reliance on the September 1 offer. B. Valid, because there was no consideration to support an option contract. C. Not valid, because the retailer had 90 days in which to accept. D. Not valid, because the manufacturer gave assurance that the offer would remain open until October 1.
D. Not valid, because the manufacturer gave assurance that the offer would remain open until October 1.
1. A restaurant ran a promotion in a local newspaper, stating the following: "MOTHER'S DAY SPECIAL We will be open for brunch on Mother's Day from 10 am to 2 pm offering an extensive selection of dishes to honor Mothers of all ages. Call us to reserve your table." The response to the promotion was more than the restaurant expected and the restaurant was soon overbooked for the Mother's Day brunch. On the day before Mother's Day, the restaurant owner decided to double-check inventory to make sure the restaurant had enough food and supplies to handle the large Mother's Day crowd. To her horror, she discovered that the restaurant was almost out of eggs. Knowing that a large supply of eggs would be needed for the omelet station, the owner immediately sent the following e-mail to her egg supplier: "Desperately need 20 flats of Grade AA eggs for tomorrow's brunch. Money is no object. The eggs must be delivered today." The supplier e-mailed back: "No problem! I'll load them on the truck and deliver them within the hour." With respect to the agreement between the owner and the supplier, which of the following statements is most accurate regarding the omittance of a fixed contract price? A. The contract is unenforceable as it violates the statute of frauds. B. The contract is unenforceable, because of indefiniteness. C. The contract may be enforceable if it is later modified to include the price term. D. The contract is enforceable with reasonable price being fixed at time of delivery.
D. The contract is enforceable with reasonable price being fixed at time of delivery
