Chap. 23 acct. 203
Article 2A authorizes liquidated damages payable by either party for default or any other act or omission
True
A buyer's commercially reasonable charges for the care and custody of goods that a buyer has rightfully rejected are known as: a. incidental damages. b. liquidated damages. c. consequential damages. d. cover charges.
A
A buyer's right to purchase, in good faith and without unreasonable delay, substituted goods from Seller B when Seller A breaches a sales contract is: a. cover. b. specific performance. c. replevin. d. reclamation.
A
A seller's remedies upon the buyer's default: a. may be goods oriented, money oriented, or obligation oriented. b. are subject to the doctrine of election of remedies. c. are, under the UCC, the same as a buyer's remedies for the seller's breach. d. All of the above.
A
The Code permits the seller to recover the price plus incidental damages in which of the following situation(s)? a. Where the buyer has accepted the goods. b. Where conforming goods have been lost or damaged before risk of loss has passed to the buyer. c. Where the goods have been identified to the contract and there is a ready market available for their resale at a reasonable price. d. None of the above. e. All of the above.
A
The amount of liquidated damages included in a contract that would be upheld by a court: a. must be reasonable in light of the inconveniences or lack of feasibility of obtaining an adequate remedy. b. may be so high as to be punitive to the breaching party. c. may be regarded as a penalty. d. All of the above. e. None of the above.
A
Tom breached a contract he had with Jim. In addition to other remedies available, Jim may be able to recover commercially reasonable expenses incurred as a result of the breach. These expenses are: a. incidental damages. b. punitive damages. c. liquidated damages. d. extraordinary damages.
A
A seller has breached his contract by providing unfit seed for the planting of beans. Damages would include: a. the lost profits from a contract to sell the bean crop. b. the cost of keeping the defective seed in a storeroom. c. the cost of replacement seed. d. All of the above.
D
Amy agrees to buy goods from Van for a contract price of $2,000 payable on delivery. Amy repudiates the contract and refuses to pay anything. Van resells the goods in compliance with the Code for $1,700, incurring $200 in sales commissions but saving $250 in shipping costs. Van would recover from Amy: a. the contract price of $2,000. b. $500. c. $350. d. $250.
D
After a breach by the seller, buyer may replevy the goods after identification if: a. he acts within 30 days. b. he cannot buy replacement goods. c. the seller is insolvent. d. he cannot buy replacement goods or the seller is insolvent.
B
Damages a buyer may recover for loss resulting from requirements, the needs of which the seller had reason to know at the time of contracting and which could not reasonably be prevented by cover, are: a. incidental. b. consequential. c. punitive. d. liquidated.
B
In the Bigelow-Sanford, Inc. v. Gunny Corp. case, the court found: a. the buyer did not purchase substitute goods in good faith and without unreasonable delay. b. the Code permits a buyer to cover by buying substitute goods if the buyer acts in good faith and without unreasonable delay. c. since the buyer did not specifically allocate the spot market replacements to the individual sellers' accounts, the cost of cover could not be determined in this case. d. the buyer was required to obtain cover and its failure to do so bars other Code remedies.
B
Which of the following is not a remedy available to an unpaid seller against the buyer? a. Recovery of the price. b. Cover and sue for damages. c. Recovery of incidental damages. d. Cancellation of the contract.
B
Which of the following is not a remedy of the buyer? a. The buyer has the right of cover and to receive damages. b. The buyer has the right to stop delivery of the goods. c. The buyer may have the right to obtain specific performance. d. The buyer may have the right to recover incidental and consequential damages.
B
Which of the following would not be a remedy available to the seller on account of buyer's breach? a. Stop delivery of the goods by the carrier. b. Require the financially sound buyer to return the goods. c. Recover the price. d. Cancel the contract.
B
A seller's incidental damages for a buyer's breach would include all but which one of the following? a. Cost to store the widgets in buyer's city. b. Cost to ship widgets back to seller. c. Cost to initially ship the widgets to buyer. d. Cost to reload widgets onto seller's truck at buyer's city.
C
Perry is building his house and orders a hot water heater from Jones Co. to be installed by them. The hot water heater they sent has a 45-gallon capacity, but Perry had ordered a 60-gallon capacity. Jones cannot provide a 60-gallon heater for two months, so Perry cancels the contract and gets a heater from another company. Jones Co. says it must be allowed to install the replacement heater. What result? a. Jones wins; Perry can only cancel the portion of the contract regarding the goods. b. Jones wins; Perry can only cancel if installation is also delayed two months. c. Perry wins since the contract breach concerns the whole contract. d. Perry can cancel the whole contract, but he is then limited in his recovery of damages.
C
The seller may resell the goods identified to a contract: a. only at a public sale. b. only if the goods are sold as a unit. c. at a public or private sale. d. only if the goods are perishable.
C
Andrews Manufacturing Company has repudiated its contract to sell 500 computers to a computer store. What recourse does the retailer have under the circumstances? a. It must await the seller's performance. b. It can recover punitive damages. c. It can seek specific performance. d. It can "cover" by procuring goods elsewhere and then sue for any difference between the cost of cover and the contract price, plus incidental and consequential damages less expenses saved by the breach.
D
As the result of a seller's breach, a buyer may ask for incidental damages. Incidental damages include costs incurred in: a. storing goods in a warehouse. b. making calls to obtain replacement goods. c. inspecting the goods. d. All of the above.
D
On February 21, Cara wrote to Pandora Mfg. asking for shipment of 100 swimsuits on 90-day credit. In the letter, she gave references that indicated that her store was financially sound. Actually she had bills that she could not pay and hoped to turn the business around with the summer swimsuit sales. Pandora shipped the suits on April 2; they were received April 15. Cara immediately put them on display and 27 were sold by April 30 when Pandora discovered that Cara had lied. Pandora could: a. recover 73 suits plus incidental damages. b. recover 10 suits provided that Pandora acted within 10 days of discovering the misrepresentation. c. recover no suits since it had been more than 10 days since delivery. d. recover 73 suits.
D
Rachel agrees to sell Bill goods for $2,000. The value of the goods accepted is $1,500. If the goods had been as warranted, their value would have been $2,600. What are the buyer's damages for breach of warranty? a. $500. b. $600. c. $1,000. d. $1,100.
D
The buyer's incidental damages resulting from the seller's breach include: a. expenses reasonably incurred in inspection of rightfully rejected goods. b. any commercially reasonable charges or commissions in connection with obtaining cover. c. any reasonable expenses connected to the delay. d. All of the above e. None of the above.
D
The fair market value of a 10-foot fishing boat is $1,000. In a special promotion, J's Marina purchases a 10-foot fishing boat for $900. The boat is badly scratched when it arrives. J's Marina, however, accepts the shipment and notifies the seller of the defect. The boat as delivered has a value of $800. If the damaged boat is a breach of warranty by the seller, the buyer may recover from the seller: a. $100. b. $100 plus incidental and consequential damages. c. $200. d. $200 plus incidental and consequential damages.
D
Under the CISG, if the contract is avoided and the seller has resold the goods in a reasonable manner and within a reasonable time after avoidance, the seller may recover: a. the difference between the contract price and the resale price. b. incidental damages only. c. consequential damages. d. Both (a) and (c).
D
Under the CISG, the seller may require the buyer to: a. pay the price. b. take delivery. c. perform the contractual obligations. d. All of the above.
D
Under what circumstances may the buyer seek the remedy of replevin? a. Where the buyer has been unable to obtain cover. b. Where the goods have been shipped under reservation of a security interest in the seller and that interest has been satisfied. c. Where the goods are specially manufactured but can be purchased from another source. d. Both (a) and (b) above are correct.
D
Which of the following is correct with respect to consequential damages under the Code? a. Consequential damages include damages for destruction of a warehouse caused by the explosion of nonconforming goods. b. Consequential damages include damages for lost profits from a contract to resell goods which the seller never delivers. c. Particular needs of the buyer need to be made known to the seller before the seller can be held responsible for consequential damages relating to those needs. d. All of the above are correct.
D
Which of the following remedies are mutually exclusive and could not be obtained simultaneously? a. Cover, incidental and consequential damages. b. Identification of the goods and withholding delivery. c. Withholding delivery and suit to recover incidental and consequential damages. d. None of the above. The Code's remedies are cumulative unless under the facts of an individual case one remedy bars another.
D
Which type of contractual provision affects remedies? a. Cover. b. Liquidation or limitation of damages. c. Modification or limitation of remedy. d. Both (b) and (c) are correct.
D
An aggrieved seller may: a. withhold delivery. b. resell or recover damages for nonacceptance or recover the price. c. recover incidental damages. d. cancel the contract. e. All of the above.
E
A company may be considered insolvent under the Code only if it is unable to pay its debts as they are due.
False
An aggrieved seller who resells wrongfully rejected goods is accountable to the original buyer for any profit made on the resale.
False
Breach of one installment of an installment contract never gives rise to breach under the whole contract.
False
If the buyer received goods on credit while he was insolvent by misrepresenting his solvency in writing within three months prior to deliver of the goods, the seller is able to reclaim the goods only if the seller makes a demand on the buyer within ten days after the buyer has received the goods.
False
If the seller has failed to comply with Code requirements in making a resale of goods that were wrongfully rejected, a good faith purchaser at the resale takes the goods subject to rights of the original buyer.
False
Landview Appliances sells a stove to Evan for his home. The contract of sale excludes liability for consequential damages. When Evan turns on the stove, it catches fire, burning Evan severely. Evan cannot recover for his injuries because of the exclusion of damages clause.
False
Robert paid William $1,000 for a rare first edition of an Edgar Allen Poe novel. The sales contract states that the book is to be delivered within ten days. William, however, refused to deliver the book as promised. In order to sue for specific performance under the UCC, Robert must prove that money damages will not be adequate compensation for his loss
False
Since the purpose of remedies under the Code is compensation, punitive damages are generally available.
False
The contract between the buyer and the seller cannot provide for any additional remedies other than those specified in the Code.
False
The right of the buyer to recover from an insolvent seller the goods in which he has a special property interest and for which he has paid, existed at common law before being included in the Code.
False
Under the CISG, avoidance of a contract cancels any provision for settlement of disputes.
False
Under the UCC, the aggrieved party must choose one remedy to ask for and forfeit the others.
False
Vandehal Company's total liabilities are $520,000 and its total assets are $460,000. It falls within the bankruptcy meaning - but not the Code's definition - of insolvency.
False
A buyer who does not cover is precluded from consequential damages that could have been prevented if the buyer did obtain cover.
True
A contractual remedy is optional unless the parties expressly agree that it is to be exclusive.
True
A lessor retains title to the goods and has the right to recover possession of them upon default by the lessee
True
Demrow Co., which contracted to buy 400 fishing poles from Royal Industries, anticipatorily breached the contract. Royal may proceed to identify to the contract conforming goods in its possession so that it can exercise the remedy of resale of the goods.
True
If the breach by the seller concerns the whole contract, the buyer may cancel the entire contract.
True
If the buyer is insolvent and has not paid for goods it has received, the seller may reclaim the goods.
True
If the buyer makes a wrongful rejection, the seller may resell the goods in good faith and in a commercially reasonable manner and the seller may recover from the buyer the difference between the contract price and the resale price, plus any incidental damages.
True
If the buyer makes substitute purchases in good faith and without unreasonable delay, she may recover, as damages, the difference between the cost of cover and the contract price, plus incidental damages but minus any expenses she saved because of the seller's breach.
True
If the seller has the right to cancel, he may recover damages for breach without having to tender any further performance.
True
Incidental damages include reasonable expenses or commissions in effecting cover.
True
Massey Fabrications sells some equipment to Keiser Co., warranting its suitability for Keiser's purpose. The equipment, which is not suitable for Keiser's purpose, causes $5,000 in damage to Keiser's property and $12,000 in personal injuries. Keiser can recover $17,000 in consequential damages.
True
One hundred crystal flower vases have been identified to the contract and a down payment of $1,000 of the $10,000 purchase price has been paid. If the seller becomes insolvent, the buyer may still pay $9,000 and get the goods.
True
Replevin is an action at law to recover specific goods in the possession of the defendant which are being unlawfully withheld from the plaintiff.
True
Specific performance is an equitable remedy which seeks to compel the party in breach to perform the contract according to its terms.
True
The Code's remedies are cumulative, therefore, a seller may both withhold delivery of the goods and identify goods to the contract.
True
The availability of some buyer's remedies depends on the buyer's actions.
True
The buyer may deduct from the price due on the contract any damages resulting from any breach of contract by seller.
True
The contract between the buyer and the seller may expressly limit or exclude consequential damages so long as the contract is not unconscionable.
True
The recovery for a lessee's wrongful repudiation of a lease is the difference between the present value of the old rent due under the original lease and the new rent due under the new lease.
True
Under the CISG, if the buyer fails to perform any obligations, the seller may either require the buyer to pay the price or fix an additional period of time for the buyer to perform.
True
When existing goods are identified to the contract of sale, the buyer acquires a special property interest in the goods.
True
When the buyer breaches a sales contract, if the difference between the contract price and the market price will not place the seller in as good a position as performance would have, then the seller may recover the lost profit.
True
Where the seller fails to make delivery, the buyer can cancel the contract, but he must give the seller notice of his cancellation
True
