BLAW 3150 Chapters 19-22 Practice Test

If a sale involves crops that are to be harvested within twelve months, identification takes place when the crops are harvested. a. True b. False

False

In a contract for a sale of goods, the usual measure of compensatory damages is the difference between the retail price and the wholesale price. a. True b. False

False

Restitution is limited to rescission cases. a. True b. False

False

Under the UCC, there are no exceptions to the perfect tender rule. a. True b. False

False

Under the perfect tender rule, if tender is not perfect, the seller is obligated to try again. a. True b. False

False

When no delivery terms are specified in a contract for a sale of goods, the contract will fail for indefiniteness. a. True b. False

False

Acceptance of goods precludes the buyer or lessee from exercising the right of rejection. a. True b. False

True

Generally, all contracts are assumed to be shipment contracts if nothing to the contrary is stated in the contract. a. True b. False

True

Identification takes place when specific goods are designated as the subject mater of a sales or lease contract. a. True b. False

True

If a buyer breaches a contract, the seller can choose to simply cancel the contract. a. True b. False

True

If a buyer repudiates a contract before the time for contract performance, the seller can bring an action to recover damages. a. True b. False

True

If an owner holds fungible goods (e.g. wheat grain) as an owner in common, he or she can pass title without actually separating the goods. a. True b. False

True

If goods identified to a contract are destroyed through no fault of either party, both parties are excused from performance. a. True b. False

True

If the parties to a contract for a sale of goods have not agreed on a price, a court will determine a reasonable price at the time for delivery. a. True b. False

True

Punitive damages are generally not awarded in an action for breach of contract. a. True b. False

True

Reformation is an equitable remedy used when the parties have imperfectly expressed their agreement in writing. a. True b. False

True

The UCC imposes some different rules on merchants. a. True b. False

True

To be characterized as a "good" under the UCC, an item of property must be movable and tangible. a. True b. False

True

Under the UCC, an offeror must be notified within a reasonable time that the offeree has accepted. a. True b. False

True

Under the doctrine of mitigation of damages, the duty owed depends on the nature of the contract. a. True b. False

True

When a document of title is required, title passes to a buyer when and where the document is delivered. a. True b. False

True

When the risk of loss for goods passes from a seller to a buyer is generally determined by the contract between the parties. a. True b. False

True

An award of damages for a breach of contract can elevate the non-breaching party to a better position than he or she would have been in if the contract had not been breached. a. True b. False

False

Damages that compensate the non-breaching party for the loss of a bargain are known as consecutive damages. a. True b. False

False

Even if goods are not identified to the contract, the title and risk of loss can still pass from the seller to the buyer. a. True b. False

False

A seller has an insurable interest in goods as long as the goods are in existence. a. True b. False

False

A firm offer by a merchant may be oral. a. True b. False

False

A merchant is a person who deals in goods of the kind involved in the sales contract or who holds herself or himself out as having skill or knowledge peculiar to the practices or goods being purchased or sold. a. True b. False

True

A party seeking to recover compensatory damages can also recover incidental damages. a. True b. False

True

A party seeking to recover in quasi contract must show that the other party has been unjustly enriched. a. True b. False

True

Rita contracts to work for Social Media Corporation (SMC) during April for $4,500. On March 31, SMC cancels the contract. Rita declines a job of a different type and rank with Tech Talk, Inc., which would have paid $3,500. Rita files a suit against SMC. As compensatory damages, Rita can recover a. $4,500. b. $3,500. c. $1,000 in shares of SMC stock. d. $0.

a. $4,500.

Guido and Hal want to rescind their contract under which Guido sold Hal a mountain bike for $100. To rescind the contract a. Guido must return the $100 and Hal must return the bike. b. Guido must return the $100 only. c. Hal must return the bike only. d. the parties can keep the "benefits" of their bargain.

a. Guido must return the $100 and Hal must return the bike.

Barley that fills County Grain Co-op's silo is fungible if the barley is a. alike naturally, by agreement, or by trade usage. b. fundamentally different. c. fun, good, and edible. d. rotting due to a leaky roof and a delay in shipping

a. alike naturally, by agreement, or by trade usage.

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. cancel the contract. c. recover the amount of its expected profit plus incidental damages. d. resell or dispose of the seed and hold Grange Co-op liable for any loss.

a. attempt to cure the defect.

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. await performance, sue Soft, or suspend its own performance. b. only await Soft's performance for a commercially reasonable time. c. only sue Soft for breach of contract. d. only suspend its own performance.

a. await performance, sue Soft, or suspend its own performance.

Omni Metals Company and Piecework Fabrication, Inc., enter into a contract under which Omni agrees to deliver a certain quantity of sheet metal to Piecework each month. The contract does not include a price term. In a suit between the parties over the price, a court will a. determine a reasonable price at the time for delivery. b. impose the lowest market price. c. impose the highest market price. d. return the parties to the positions they held before the contract.

a. determine a reasonable price at the time for delivery.

Fresh Dairy, Inc., is the offeror and Gelato Ice Cream Company is the offeree under a unilateral sales contract in which Hector's Helado Corporation is also interested. Fresh Dairy is not notified of Gelato's performance within a reasonable time. Fresh Dairy a. may treat the offer as having lapsed. b. must assume that Fresh Dairy has started to perform. c. must contact Fresh Dairy. d. must notify Hector's.

a. may treat the offer as having lapsed.

Pam buys from Midtown Motors a used sport utility vehicle (SUV). The SUV was manufactured by GEM Vehicles, Inc., and previously owned by Ron. Regarding title to the SUV, Pam acquires a. whatever title Midtown had. b. whatever title Gem had. c. whatever title Ron had. d. no title.

a. whatever title Midtown had.

Sara contracts to work exclusively for Thermal Company during July for $5,000. On June 30, Thermal cancels the contract. Sara finds a similar job for the month of July but earns only $3,000. Sara files a suit against Thermal. As compensatory damages, Sara can recover a. $3,000. b. $2,000. c. $1,000. d. $0.

b. $2,000.

Clay Pots pays Dora $25,000 to propose an online marketing campaign. Two days later, Dora tells Clay Pots that she has accepted a job with its competitor Earthenware Inc. and cannot plan the campaign. As compensatory damages, Clay Pots can recover a. $250,000. b. $25,000. c. $2,500. d. $0.

b. $25,000.

Brad leaves an iPod at Computer Sales & Repair (CSR) to have the battery replaced. CSR sells the iPod to Doris, who does not know that it belongs to Brad. Brad can recover from a. no one. b. CSR. c. Doris. d. Apple, Inc., the maker of the iPod.

b. CSR.

Consumers Choice store accepts a shipment of EZ2U-brand tablets from Digital Devices, Inc. Consumers Choice later discovers a defect in the tablets, revokes acceptance, and returns the tablets via GoBack, Inc. During the return, the tablets are lost. The loss is suffered by a. Consumers Choice. b. Digital Devices. c. GoBack. d. Consumers Choice's customers by an increase in prices of other goods.

b. Digital Devices.

Gas & Wood Stove Shop receives Hearthwarm-brand stoves from Independent Dealer, Inc., under a sale or return agreement. While the stoves are in Gas & Wood's possession, title is held by a. Independent Dealer. b. Gas & Wood. c. Gas & Wood's creditors. d. Hearthwarm

b. Gas & Wood.

Garden & Field stores order a specific assortment of rose bulbs from Hybrid Flora Company. Hybrid mistakenly ships a selection of annuals, which Garden & Field rejects and returns via Intra-state Transport, Inc. During the return, the annuals are lost. The loss is suffered by a. Garden & Field. b. Hybrid Flora. c. Intra-state Transport. d. Garden & Field's customers by an increase in the prices of other goods.

b. Hybrid Flora.

County Dentists Clinic offers to buy from Dental & Medical Supplies Company a certain quantity of floss and other items for a certain price. Dental & Medical can accept the offer by a. a material alteration of the terms within a reasonable time. b. a prompt promise to ship or a prompt or current shipment of the goods. c. any of the choices. d. a shipment of nonconforming goods with a notice of accommodation.

b. a prompt promise to ship or a prompt or current shipment of the goods.

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. cannot reject the entire shipment. b. can reject the entire shipment. c. must accept the entire shipment. d. must reject the entire shipment.

b. can reject the entire shipment.

Jason contracts with Golf Carts Unlimited, Inc. to buy five golf carts. The contract lists the five carts as GC001, GC002, GC003, GC004, GC005. Identification a. requires that Jason verify his identity to take possession of the carts. b. has taken place. c. cannot take place until the contract is reviewed by a court. d. will take place only when Jason pays for the golf carts.

b. has taken place.

In a dispute over a sale involving a bicycle, Dain argues that as to this deal Ed's Hobby Shop, where Dain bought the bike, is a merchant. A court may determine whether Ed's is a merchant by assessing whether a. it has sold any bikes within the last year. b. it holds itself out by occupation as having knowledge or skill unique to the bike in the transaction. c. its owner enjoys biking. d. it subscribes to Bike, a biweekly trade magazine.

b. it holds itself out by occupation as having knowledge or skill unique to the bike in the transaction.

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. $1,500. b. $1,000. c. $500. d. $0.

c. $500.

Ferris is refinishing his kitchen floor and needs a floor sander to complete the job. Ferris's neighbor Gena suggests that he call Home Repair Rentals, Inc. Home Repair leases Ferris a floor sander. In this transaction, the lessor is a. Ferris. b. Gena. c. Home Repair. d. none of the parties.

c. Home Repair.

Megan, an agent for Nabob's, a department store, orders one hundred dresses from Original Designs Inc. Absent a specific agreement between the parties to the contrary, title will pass to Nabob's when a. Megan signs the contract. b. Original Designs signs the contract. c. Original Designs physically delivers the dresses. d. Nabob's pays for the dresses.

c. Original Designs physically delivers the dresses.

Ursula buys a Verismooth boat from a Watercraft store, which agrees to keep the boat for Ursula until she picks it up. Before Ursula gets the boat, an unforeseen tornado destroys the store and the boat. The loss of the boat is suffered by a. Ursula. b. Verismooth. c. Watercraft. d. the government agency that failed to foresee the tornado.

c. Watercraft.

Effortless Workouts, Inc., offers to sell a treadmill to Farouk and sends it to him on a trial basis. This is a. a bailment. b. a delivery ex-ship. c. a sale on approval. d. a sale or return.

c. a sale on approval.

Big Red Drinks, Inc. contracts to buy two tons of cranberries from Super Fruits, Inc. The contract states that Super Fruits is required to ship the cranberries to Big Red Drinks by Speedy Wind Air Freight. The contract is a. a bill of lading. b. a destination contract. c. a shipment contract. d. a warehouse receipt

c. a shipment contract.

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. force InFlo to accept and pay for the goods. b. require InFlo to find a buyer for the goods. c. resell the goods and recover any damages from InFlo. d. None of these answers are correct.

c. resell the goods and recover any damages from InFlo.

Paramount Bookstores buys fifty cases of an assortment of books from Quixotic Publishing Company with the right to return the unsold books in lieu of payment. This is a. a bailment. b. a lease. c. a sale on approval. d. a sale or return.

d. a sale or return.

Builders, Inc., agrees to construct an office building for Champ Fitness Clubs, Inc. The project proceeds according to plan, but before it is done, Champ tells Builders to quit. Builders may recover a. the contract price less costs of materials and labor. b. the contract price. c. the costs needed to complete construction. d. profits plus the costs incurred up to the time of the breach.

d. profits plus the costs incurred up to the time of the breach.

Global Outfitters Outlet and Holly, a consumer, enter into a contract for a sale of camping gear. If the contract includes a clause that is perceived as grossly unfair to Holly, its enforcement may be challenged under a. the mirror image rule. b. the principle of fair trade. c. the predominant-factor test. d. the doctrine of unconscionability.

d. the doctrine of unconscionability.