blaw ch 22
SUV Motors Corporation contracts to buy brakes from Top Stop, Inc., which wrongfully fails to deliver the goods. SUV can recover damages equal to the difference between the contract price and the market price at the time: -SUV filed a suit against Top Stop. -SUV learned of the breach. -Top Stop was required to tender the brakes. -the parties contracted.
-SUV learned of the breach.
UPG agreed to purchase gasoline from Will Petroleum, Inc. The contract was to be performed within one month of the contract date. During that month, gasoline prices declined, and UPG calculated that performing under the contract would cost $1.5 million more than purchasing the gasoline at prevailing market prices. At the same time, rumors began circulating that Will Petroleum might file for bankruptcy. One of the ships carrying the gasoline from Will Petroleum arrived ahead of schedule, but UPG refused it permission to dock. UPG then demanded that Will Petroleum provide oral assurances within twenty-three hours that it intended to perform the contract. There was no response. The next evening, UPG sent Will Petroleum a telex stating that it considered the contract repudiated and that it had covered the agreement. Will Petroleum eventually sold the gasoline for $5.5 million less than the original contract price and the next day filed for bankruptcy. Will Petroleum filed a lawsuit for breach of contract seeking damages in the amount of $5.5 million from UPG. UPG claimed that Will Petroleum had repudiated the agreement by failing to provide assurances. The court most likely held that: -UPG had breached the contract, because it had no reasonable grounds on which to demand assurances. -UPG had appropriately repudiated the contract, because the contract had become commercially impracticable. -Will Petroleum had repudiated the contract, because it had breached its duty to cooperate. -Will Petroleum had repudiated the contract, because it had failed to give assurances to UPG when requested.
-UPG had breached the contract, because it had no reasonable grounds on which to demand assurances.
While passing by the American Kennels pet store, owned by George Rosenthal, Ruby Dempsey decided to purchase a pedigreed white male poodle. Dempsey told Rosenthal that she wanted a dog suitable for breeding. Five days after she purchased the poodle, Dempsey had the dog examined by a veterinarian and learned that it had an undesirable congenital defect. The defect did not prevent the dog from being bred but made it undesirable to breed it. Dempsey returned to the store and demanded a refund of her purchase price. Rosenthal refused, and Dempsey filed a lawsuit claiming that Rosenthal had breached the implied warranties of merchantability and fitness for a particular purpose. Rosenthal claimed that the poodle was capable of breeding and that no warranties had been breached. The court agreed with Dempsey that the sale of the dog fell under the UCC. It also agreed that Rosenthal had breached the warranty of merchantability, because although the dog could breed, its congenital defect made the dog not reasonably fit for the purpose of breeding. On the question of the breach of the warranty of fitness for a particular purpose, the court most likely held that the warranty had: -been breached, solely on the ground that the dog was not fit for Dempsey's purpose. -been breached, because Rosenthal knew Dempsey's purpose in buying the dog and Dempsey relied on Rosenthal's skill in furnishing a dog appropriate for that purpose. -not been breached, because Dempsey did not rely on Rosenthal's skill in providing an appropriate animal. -not been breached, because Rosenthal had no reason to know the particular purpose for which Dempsey was purchasing the dog.
-been breached, because Rosenthal knew Dempsey's purpose in buying the dog and Dempsey relied on Rosenthal's skill in furnishing a dog appropriate for that purpose.
Can-Key Industries, Inc., manufactured a newly developed product, a turkey-hatching unit, which it sold to Industrial Leasing Corp. (ILC). ILC agreed to buy the unit only on the condition that it was accepted by a customer, Rose-A-Linda, which would then lease the unit from ILC. Can-Key agreed to the condition and agreed to allow Rose-A-Linda to test the hatching unit to find out if it could be integrated into its turkey-raising operations. Rose-A-Linda changed the hatching unit four times and kept the unit for over fifteen months while it attempted to make the unit meet its specifications. Ultimately, however, Rose-A-Linda refused to lease the unit, because it failed to meet the company's specifications. ILC then refused to go through with its contract with Can-Key. Can-Key filed a lawsuit in an Oregon state court against ILC for breach of contract, alleging that ILC and Rose-A-Linda had accepted the hatching unit by keeping and using it for so long and by making several alterations to it that were inconsistent with rejecting it. The court most likely held that ILC had: -accepted the hatching unit, because it made unauthorized alterations to the unit. -accepted the hatching unit, because it kept the unit for an unreasonable length of time before notifying Can-Key of its rejection. -rejected the hatching unit, because it was a nonconforming good. -rejected the hatching unit, because it took a reasonable amount of time to inspect the unit and made foreseeable modifications.
-rejected the hatching unit, because it took a reasonable amount of time to inspect the unit and made foreseeable modifications.
Lupofresh, Inc., contracted to sell a quantity of hops to Pabst Brewing Co. Lupofresh processed the hops and notified Pabst that they were ready for shipment. Pabst responded with a letter expressly accepting the hops. When Pabst later refused to issue shipping orders, Lupofresh filed a lawsuit in a Delaware state court seeking the full purchase price from Pabst. Pabst claimed that it had not accepted the hops but that they had merely been identified to the contract. It claimed that Lupofresh was required to attempt to resell the hops before it was entitled to recover the purchase price. The court held that Pabst had accepted the hops, because it had expressed its acceptance in writing. The court also held that Lupofresh: -was not required to attempt to resell the hops, because a seller has the right to damages when goods have been accepted by a purchaser. -was not required to attempt to resell the hops, because resale is not required when the goods are perishable. -was required to attempt to resell the hops, because the letter signifying acceptance was irrelevant when not accompanied by shipping orders. -was required to attempt to resell the hops, because the UCC favors resale whenever possible.
-was not required to attempt to resell the hops, because a seller has the right to damages when goods have been accepted by a purchaser.
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: 10 days of Bailey's receipt of the television. 30 days of Bailey's receipt of the television. 1 year of Bailey's receipt of the television. 6 months of Bailey's receipt of the television.
10 days of Bailey's receipt of the television.
Bella, Inc. entered a contract with Furniture Builder Co. to supply cloth. Furniture Builder called Bella and said that it would not be able to accept the cloth because it was unable to get other supplies it needed to make furniture. In fact, Furniture Builder is likely to go bankrupt. Which of the below would be the best advice for Bella? Ship the cloth in anticipation that payment will be forthcoming. Treat Furniture Builder Co.'s phone call as a breach. Retract performance Hold the cloth for thirty days to prevent Furniture Builder from suing for breach.
Treat Furniture Builder Co.'s phone call as a breach.
As a general rule, which of the following may a non-breaching party do when faced with an anticipatory repudiation by the other party? -Sue for punitive damages -Wait and hope that the repudiating party will perform -File a claim against the breaching party with the FDA -Request an annulment
Wait and hope that the repudiating party will perform
Radio Inc. has ordered component parts from Electro Co. deliverable on January 31. On January 28, Electro Co. tells Radio that the parts cannot be delivered until February 2. Has Electro breached the contract? No, because two days is not a material delay. No, because the January 28 communication was only anticipatory in nature. Yes, because the communication materially changed Electro's position. Yes, because anticipatory repudiation is a breach.
Yes, because anticipatory repudiation is a breach.
Sid and Tony enter a contract for a sale of Sid's collection of electric guitars. Before the time for performance, Sid tells Tony that he does not want to deliver the guitars. Has Sid breached the contract? Yes, under the doctrine of anticipatory repudiation. Yes, under the doctrine of retraction. No, because the contract time has not yet expired. No, because a repudiation may be retracted.
Yes, under the doctrine of anticipatory repudiation.
Anticipatory repudiation is: a breach of contract. a compromise between two parties who are unable to perform. a remedy available only to a non-breaching party. a remedy available only to a breaching party.
a breach of contract.
An encumbrance on a property to satisfy a debt or protect a claim for payment of a debt is called: an infringement. a liability. a warranty. a lien.
a lien.
If some of the goods delivered do not conform to the contract and the seller or lessor has failed to cure, the buyer or lessee can make: a partial acceptance. a qualified assurance. a qualified acceptance. a partial repudiation.
a partial acceptance.
When the seller or lessor refuses to deliver the goods, the remedies available to the buyer or lessee may include the right to: cancel the contract. sue to obtain damages. all of these choices. sue to obtain specific performance.
all of these choices
Based on the UCC definition, an example of a commercial unit is: a suite of bedroom furniture. one microwave oven. all of these choices. a gross of canned peaches.
all of these choices.
For lemon laws to apply: the car must be defective in a way that significantly affects the vehicle's value or use. the seller or manufacturer must be given a number of opportunities to remedy the defect. all of these choices. the seller or manufacturer fails to cure the persistent problem.
all of these choices.
When the goods are in the possession of the seller or lessor, and the buyer or lessee breaches the contract, the seller or lessor may: withhold or discontinue performance. resell or dispose of the goods. all of these choices. cancel the contract.
all of these choices.
Kathleen Inniss purchased an automobile from Methot Buick-Opel, Inc. The car, which was a demonstrator model, was accompanied by a new-car, twelve-month or twelve-thousand-mile warranty. It had a history of significant mechanical and electrical problems, which Methot failed to mention to Inniss. Shortly after Inniss took possession, she experienced problems with the car. Within the next four months, she took the car back to Methot eight times for repairs. The horn, rear-window defogger, throttle, and brakes were repaired, but by the end of the warranty period, several other problems still had not been fixed. The temperature gauge continued to malfunction, the car would intermittently fail to start, the front end vibrated, and the directional indicators intermittently flashed incorrectly when in use. In addition, although the purchase agreement had provided that the car would be rustproofed, much of it had not been. The state of Maine did not have a lemon law at the time. Just before the twelve-month warranty lapsed, Inniss filed a lawsuit in a Maine state court seeking to revoke her acceptance of the contract. The court most likely: -allowed Inniss to revoke, because it was difficult to discover the car's defects before acceptance and she notified Methot of the revocation within a reasonable time. -allowed Inniss to revoke, because the warranty period had not yet run. -did not allow Inniss to revoke, because she accepted the car and a buyer's acceptance is final. -did not allow Inniss to revoke, because she waited too long to notify Methot of her revocation.
allowed Inniss to revoke, because it was difficult to discover the car's defects before acceptance and she notified Methot of the revocation within a reasonable time.
If, after having had a reasonable opportunity to inspect the goods, the buyer or lessee signifies to the seller or lessor that the goods either are conforming or are acceptable in spite of their nonconformity, this constitutes: an acceptance. a repudiation. an incidental acceptance. an offer.
an acceptance.
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 consequential remedy. an exclusive remedy. a specific performance remedy. an unconscionable remedy.
an exclusive remedy.
A salesperson says to a buyer, "These drill bits will penetrate stainless steel, without dulling." This statement is an example of: an implied warranty. an express warranty. a warranty disclaimer. a warranty of title.
an express warranty.
A woman with a prize rose garden discovers an insect unknown to her on her roses, 2 weeks before the Community Flower Show. She cuts a clipping with the insect on it, puts it in a bag, and takes it to her local garden store. She tells the salesman she wants something to kill the bugs without killing her roses. Without saying a word, the salesman walks to a shelf, pulls off a container, and hands it to her. This is an example of: an express warranty. an implied warranty of merchantability. none of these choices. an implied warranty of fitness for a particular purpose.
an implied warranty of fitness for a particular purpose.
Your road bicycle blows a tire. You take the old tire to the bike store and ask for a new tire for your model of road bike. Instead, the salesperson sells you a mountain bike tire. Here, the sales person has breached: an implied warranty of merchantability. an implied warranty of fitness for a particular purpose. an implied warranty of conscionability. an implied warranty from trade custom.
an implied warranty of fitness for a particular purpose.
Every sale or lease of goods made by a merchant who deals in goods of the kind sold or leased automatically gives rise to: an implied warranty disclaimer. an implied warranty of fitness for a particular purpose. an implied warranty of merchantability. an implied warranty from prior dealings or trade custom.
an implied warranty of merchantability.
The UCC permits the breaching party to retract his or her repudiation (subject to some limitations) by: amending the contract to reflect the breaching party's intent to perform. any method that clearly indicates the party's intent to perform. performing within reasonable proximity of the contract terms. petitioning a court for reinstatement.
any method that clearly indicates the party's intent to perform.
Citrus Groves contracts with four food companies to sell its entire crop of oranges. When half of the crop is lost to an unexpected insect infestation, Citrus must: apportion its surviving crop fairly among its customers. breach some of its contracts. substitute other fruit for the oranges. buy elsewhere as many oranges as needed to satisfy its contracts.
apportion its surviving crop fairly among its customers.
The general rule regarding the warranty of title in most sales contracts is that the warranty: arises only after the buyer has inspected the goods. arises only when the seller specifically mentions it. arises automatically in most sales contracts. does not apply to sales contracts, only to lease contracts.
arises automatically in most sales contracts.
Unless the parties otherwise agree, the buyer or lessee has an absolute right to inspect the goods: before making payment. after acceptance. after shipment. before signing the contract.
before making payment.
Under the UCC's perfect tender rule, when a seller delivers nonconforming goods, a buyer: -must accept all of the goods. -can accept all, part, or none of the goods. -can accept the goods only after informing the nearest chamber of commerce of the breach. -must reject all of the goods.
can accept all, part, or none of the goods.
Custom Tableware, Inc., contracts for a sale of cutlery to Diners Cafe under a shipment contract. Custom must: contract for transportation of the cutlery and tender to Diners documents to obtain its possession. neither contract for transportation of the cutlery nor tender to Diners documents to obtain its possession. only tender to Diners documents to obtain possession of the cutlery. only contract for transportation of the cutlery.
contract for transportation of the cutlery and tender to Diners documents to obtain its possession.
Inspection of goods can take place at any reasonable place and time and in any reasonable manner. Generally, what is reasonable is determined by: custom of the trade or past practices of the parties. future agreed-to terms of the parties. none of these choices. a court of law.
custom of the trade or past practices of the parties.
The seller has the right to stop delivery of the goods until the time when: a. the buyer obtains possession of the goods. b. a negotiable document of title covering the goods has been properly transferred to the buyer. c. the carrier acknowledges the rights of the buyer in the goods. d. all of these choices.
d
The perfect tender rule of the UCC generally requires that the seller: be courteous and polite to the buyer. be a good faith dealer when negotiating a sale of goods. provide the buyer with a right to reclaim the goods. deliver or hold at the buyer's disposal goods that conform to the contract's terms in every respect.
deliver or hold at the buyer's disposal goods that conform to the contract's terms in every respect.
In a shipment contract, the seller is not obligated to: place the goods in the hands of the carrier. deliver the goods to the buyer at a particular destination. promptly notify the buyer that shipment has been made. obtain and promptly deliver or tender to the buyer any documents necessary for the buyer to get the goods from the carrier.
deliver the goods to the buyer at a particular destination.
Collins is required by contract to deliver 500 lamps to Thomas on or before August 1, and the locations are to be specified later by Thomas. Collins repeatedly requests delivery locations, but Thomas never responds. Collins does not ship by August 1. Collins is not held liable under the perfect tender doctrine due to the exception known as: right of assurance. commercial impracticability. duty of cooperation. duty of partial performance.
duty of cooperation.
If a court holds that warranties are inconsistent, the rule it will apply to interpret which warranty is most important is that: inconsistent general descriptions take precedence over mere samples. general descriptions displace technical specifications. implied warranties take precedence over express warranties. express warranties displace inconsistent implied warranties, except for implied warranties of fitness for a particular purpose.
express warranties displace inconsistent implied warranties, except for implied warranties of fitness for a particular purpose.
Jy, Inc. contracted to supply Kaya Co. with coffee beans. Jy informed Kaya one month before the scheduled delivery that it would not be able to supply the coffee. If Kaya does not find an alternate supplier, Kaya will be in breach. True False
f
An action for breach of contract under the UCC must be commenced within: four years after the cause of action accrues. five years after the cause of action accrues. ten years after the cause of action accrues. eight years after the cause of action accrues.
four years after the cause of action accrues.
Heavy Concrete Company contracts for a sale of its products to Interstate Construction, Inc. For Heavy to tender delivery of goods, it must: give Interstate notice to take delivery and hold conforming goods at its disposal. neither give Interstate notice nor hold conforming goods at its disposal. only hold conforming goods at Interstate's disposal. only give Interstate notice.
give Interstate notice to take delivery and hold conforming goods at its disposal.
Servbest Foods, Inc., had a contract with Emessee Industries, Inc., under which Emessee was to purchase 200,000 pounds of beef trimmings from Servbest at 52.5 cents per pound. Servbest delivered the warehouse receipts and invoices for the beef trimmings to Emessee. The price of beef trimmings then fell significantly, and Emessee returned the documents to Servbest and canceled the contract. Servbest then sold the beef trimmings for 20.25 cents per pound and filed a lawsuit in an Illinois state court against Emessee for breach of contract, seeking the difference between the contract price and the market price plus incidental damages. The court most likely: -granted Servbest the damages it sought, because Emessee's breach was unconscionable. -granted Servbest the damages it sought, because it made a commercially reasonable resale and was entitled to the difference in price. -did not grant Servbest the damages it sought, because the resale amount was what the goods were worth and it was not entitled to more. -did not grant Servbest the damages it sought, because the sale was commercially impracticable for Emessee.
granted Servbest the damages it sought, because it made a commercially reasonable resale and was entitled to the difference in price.
Myrtle Carpenter purchased hair dye from a drugstore. The use of the dye caused an adverse skin reaction. She filed a lawsuit against the local store and the manufacturer of the dye, Alberto Culver Co., alleging that the defendants had breached an express warranty. Carpenter claimed that a sales clerk had indicated that several of Carpenter's friends used the product and that their hair turned out "very nice." The clerk purportedly also told Carpenter that she would get very fine results. The package gave cautionary instructions about how to make a preliminary skin patch test to determine if the user was unusually sensitive to the product. Carpenter failed to conduct the preliminary skin test. The court most likely held that an express warranty about the hair dye: -had been made, because Carpenter relied on the expertise of the clerk and the warning was inadequate. -had been made, because hair dye is known to be an inherently dangerous product and sellers cannot limit their liability for known dangers. -had not been made, because the product expressly disclaimed any liability for skin reactions. -had not been made, because the clerk merely stated an opinion and the package included a warning about the possibility of the product's causing the type of a reaction that Carpenter experienced.
had not been made, because the clerk merely stated an opinion and the package included a warning about the possibility of the product's causing the type of a reaction that Carpenter experienced.
Donald Laird discussed the purchase of corn with the manager of Scribner Coop, Inc., Gary Ruwe, a man whom Laird had trained for his job as manager of the co-op. Ruwe told Laird that Scribner was having some heating problems in its corn storage bins, but Laird said that he would take four loads of corn if Ruwe would "pull out all the damaged corn from the center." On inspecting the corn after it was delivered, Laird noticed damaged corn and a silage odor (which is a result of a fermentation process caused by heating). Although Laird was dissatisfied with the corn, he did not reject it. After Laird began feeding his hogs the corn, the hogs became ill. The veterinarian tending Laird's hogs testified that their symptoms were the direct result of feed containing vomitoxin. Laird had the University of Nebraska test the corn, and traces of vomitoxin were found in it. Laird filed a lawsuit against Scribner for breach of the implied warranties of merchantability and fitness for a particular purpose. The court most likely found that Scribner: -had breached the implied warranty of fitness for a particular purpose but not the implied warranty of merchantability. -had not breached the implied warranty of fitness for a particular purpose but had breached the implied warranty of merchantability. -had breached neither the implied warranty of fitness for a particular purpose nor the implied warranty of merchantability. -had breached both the implied warranty of fitness for a particular purpose and the implied warranty of merchantability.
had not breached the implied warranty of fitness for a particular purpose but had breached the implied warranty of merchantability.
All costs resulting from a breach of contract, including all reasonable expenses incurred because of the breach, are called: incidental damages. consequential damages. compensatory damages. punitive damages.
incidental damages.
Drew contracts for a sale of tools to Engineering Company (EC). If the tools fail to conform to the contract, EC: may accept or reject the shipment in part or in whole. must accept the shipment. must renegotiate the contract. must reject the shipment.
may accept or reject the shipment in part or in whole.
The three types of title warranties imposed by the Uniform commercial Code (UCC) are good title, no liens, and: no liabilities. no warrants. no encumbrances. no infringements.
no infringements.
Under the UCC, parties to a contract can limit or exclude consequential damages, provided the limitation is: acceptable. reasonable. unconscionable. not unconscionable.
not unconscionable.
An installment contract will be breached if: the seller tenders any nonconforming goods. the buyer accepts nonconforming goods. one or more nonconforming installments substantially impair the value of the whole contract. the buyer fails to deliver goods in a timely fashion.
one or more nonconforming installments substantially impair the value of the whole contract.
Summit Supply Company contracts for a sale of medical equipment to Valley Immediate Care Corporation. Summit can enforce its right to payment: only after Valley has actually inspected the goods. only after Valley has had an opportunity to inspect the goods. whether or not Valley has had the chance to inspect the goods. only before Valley has inspected the goods.
only after Valley has had an opportunity to inspect the goods.
Athletic Footwear Company contracts to buy 100 pairs of boots from Bigg Boots, Inc. Athletic Footwear becomes insolvent. Bigg Boots may insist that Athletic: accept early delivery of the order. pay cash. submit a letter from a court providing additional assurances of payment. post a bond to guarantee payment.
pay cash
Under the Uniform Commercial Code (UCC), the basic obligation of the buyer or lessee, with respect to contract performance, is to: deliver conforming goods. insure the contract goods before delivery. tender conforming goods. pay for conforming goods.
pay for conforming goods.
Under the common law, the seller was obligated to deliver goods in conformity with the terms of the contract in every detail. This was called the: exact tender doctrine. precise tender doctrine. absolute tender doctrine. perfect tender doctrine.
perfect tender doctrine.
There has been sharp disagreement among state courts as to the extent to which warranty liability should extend to third parties. In view of this disagreement, the UCC: provides that warranty liability can never extend to third parties because this is precluded by the doctrine of privity of contract. provides that warranty liability always extends to third parties, regardless of the type of injury or harm involved. decided not to include any provisions in the UCC concerning warranty liability to third parties. provides three alternatives for liability to third parties; states can adopt whichever alternative they choose.
provides three alternatives for liability to third parties; states can adopt whichever alternative they choose.
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: reasonably foreseeable. negotiated between buyer and seller. all of these choices. written in the contract per the statute of frauds.
reasonably foreseeable.
Garden Vegetable Farm and Hungry Restaurant, Inc., enter into a contract for a sale of tomatoes. Hungry declares bankruptcy. Garden can stop delivery of the goods in transit: only if the quantity is at least a carload. only if the quantity is at least a planeload. regardless of the quantity. only if the quantity is at least a truckload.
regardless of the quantity.
When the seller or lessor delivers nonconforming goods, the buyer or lessee may: reject the goods. accept the goods, thereby giving up the right to recover damages. all of these choices. accept the goods, and later exercise the right of rejection.
reject the goods.
An action to recover identified goods in the hands of a party who is wrongfully withholding them from the other party is called: repossession. revocation. retraction. replevin.
replevin.
On May 1, City Auto & Truck Sales agrees to sell a car to Dino. Five days later, Dino refuses delivery and cancels the contract. City is entitled to: force Dino to accept the car. recover any damages from Dino but not resell the car. resell the car but not recover any damages from Dino. resell the car and recover any damages from Dino.
resell the car and recover any damages from Dino.
On May 1, A-Plus Auto Sales agrees to sell a car to Bob. Five days later, Bob cancels the contract. A-Plus is entitled to: force Bob to take the car. recover any resulting damages from Bob but not resell the car. resell the car but not recover any damages from Bob. resell the car and recover any resulting damages from Bob.
resell the car and recover any resulting damages from Bob.
Hidebound Stores, Inc., rejects a shipment of leather goods that does not conform to its contract with International Cowhide Corporation (ICC), but is unable to obtain instructions from ICC. Hidebound may: resell or return the goods only. resell or store the goods only. resell, return, or store the goods. return or store the goods only.
resell, return, or store the goods.
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 the: right of specific performance. right of cover. right of revocation. right of repudiation.
right of cover
If two warranties on a good are inconsistent,: implied warranties always displace express warranties. samples displace technical specifications. general descriptions displace technical specifications. samples displace inconsistent general descriptions.
samples displace inconsistent general descriptions.
When a sale is made on credit, the credit period usually begins on the date of: delivery. shipment. agreement. acceptance.
shipment.
Karen contracts to buy 10,000 CDs from Larry. After the CDs have been loaded onto a truck and are en route to Karen, Larry discovers that Karen is bankrupt (insolvent). In this case, Larry may: stop the delivery. cure the delivery. seasonably reject the tender. cover the tender.
stop the delivery.
If a new car has a persistent problem that the dealer or manufacturer failed to solve after repeated attempts, lemon laws require the aggrieved new-car owner to: take the case to small claims court. take the case to a state trial court. submit a complaint to an arbitration panel. submit a complaint to the Better Business Bureau.
submit a complaint to an arbitration panel.
A delay in delivery of goods under a sales contract is not a breach if performance is commercially impracticable. True False
t
A party cannot retract a repudiation of a contract after the other party has canceled. True False
t
A party cannot retract a repudiation of a contract after the other party has indicated that the repudiation is final. True False
t
A party cannot retract a repudiation of a contract after the other party has materially changed position. True False
t
A party to a contract may retract a repudiation to reinstate rights under the contract. True False
t
A seller can exercise the right to cure within the contract time for performance. True False
t
A seller cannot exercise the right to cure once the time for performance under the contract has expired. True False
t
A seller fulfills a contract by delivering goods that conform to the terms. True False
t
A substitution of one commercially reasonable carrier for another can be a valid tender of delivery if it is done within the time for performance. True False
t
Acceptance can be revoked if the nonconformity of goods substantially impairs their value and acceptance was predicated on the reasonable assumption that the buyer would cure within a reasonable time but did not. True False
t
The duties and obligations of the parties to a contract include those specified by custom. True False
t
To specifically disclaim an implied warranty of merchantability, a seller must mention the word merchantability. True False
t
Under a shipment contract, the seller is responsible for making sure that the goods are shipped properly. True False
t
When one party fails to cooperate with the other party in carrying out the terms of a contract, the other party may be excused from performing. True False
t
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: acceptance of delivery. delivery. secured delivery. tender of delivery.
tender of delivery.
The commercial impracticability exception to the perfect tender doctrine extends only to problems: caused by a natural disaster. that could not have been foreseen. in which the identified goods were destroyed. that prevent delivery of any installment of the goods.
that could not have been foreseen.
What distinguishes a C.O.D. order from a regular sales contract is that: the seller must arrange for an overnight shipment of the goods. the buyer has no right of inspection. the seller has a right of rejection. the buyer has a right of inspection.
the buyer has no right of inspection.
The performance of a party in a sales contract might be excused on the ground of commercial impracticability only if: the contingency was foreseeable. the contingency results in increased costs to the seller. a war breaks out. the contingency was unforeseeable and would not normally have been contemplated by the parties.
the contingency was unforeseeable and would not normally have been contemplated by the parties.
Superior Furniture Company contracts to buy from Timber Products, Inc., a shipment of wood that Superior will use to make furniture. Half of the wood does not conform to the contract. Superior can recover damages equal to the difference between the contract price and _____ the cost to manufacture the furniture. the cost to obtain the rest of the wood elsewhere. the sale price of the furniture. the profit that Superior would have made on the furniture.
the cost to obtain the rest of the wood elsewhere.
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: -the value of the goods as accepted. -the value of the goods if they had been delivered as warranted. -the value of the goods as accepted plus their value if they had been delivered as warranted. -the difference between the value of the goods as accepted and their value if they had been delivered as warranted.
the difference between the value of the goods as accepted and their value if they had been delivered as warranted.
An implied warranty of merchantability means that: the goods are of less than average quality. the goods are reasonably fit for the ordinary purpose for which they are sold. the goods do not meet federal standards of safety. the goods are fit for a particular use specified by the buyer.
the goods are reasonably fit for the ordinary purpose for which they are sold.
In the performance of a sales or lease contract, the basic obligation of the seller or lessor is to: transfer and deliver conforming goods. accept and pay for conforming goods. produce conforming goods and price them fairly. offer conforming goods.
transfer and deliver conforming goods.
Under the UCC, the right to replevy goods is usually available to a buyer: at any time. when the buyer is unable to cover. never. when the buyer is unable to cure.
when the buyer is unable to cover.
Goods may be rejected only if they are substantially nonconforming with the terms of the contract. True False
f
If a contract does not specify where the goods are to be delivered and the buyer is to pick them up, the place of delivery is the location of the goods. True False
f
Tender of delivery can occur in any manner. True False
f
Ample Country Stables contracts to buy 1,000 horseshoes from Blacksmith, Inc., for $1 per shoe. When the market price decreases to 50 cents per shoe, Ample refuses to go through with the deal. Blacksmith can recover: $1,500. $1,000. $500. $0.
$500.
The implied warranty of merchantability applies to food. Merchantable food would include which of the following? A bag of apples with a razor blade inside. A jar of applesauce with an earthworm inside. A package of green beans with a dead grasshopper inside. A can of peaches with a portion of a peach pit inside.
A can of peaches with a portion of a peach pit inside.
Campbell has a contract to buy a truck from Torrez. Campbell repudiates the contract while Torrez is still in possession of the truck. Torrez sues for the contract price. Prior to collection of the judgment, Torrez sells the truck to another buyer for a lower price than required by the contract with Campbell. In this situation: Torrez must accept the loss as an unrecoverable debt. Torrez must accept the loss because he could not legally resell the truck. Campbell must still pay Torrez the full contract price. Campbell must pay Torrez the deficiency between the resale price and the contract price.
Campbell must pay Torrez the deficiency between the resale price and the contract price.
Radio Inc. has ordered component parts from Electro Co. deliverable on January 31. On January 28, Electro Co. sends Radio an e-mail clearly stating that the parts cannot be delivered until February 2. Later in the day on January 28 before Radio sees the e-mail, Electro Co. tells Radio that it can meet the January 31 deadline after all. Which of the below is true? Electro Co. has retracted its repudiation. Electro Co. is in breach of the contract. The contract is repudiated because the e-mail was clear. There can be no retraction because Radio did not see the e-mail.
Electro Co. has retracted its repudiation.
Phil and Kelsey enter into a contract for a sale of Harmonica, a dog. Phil pays the price, but Kelsey does not deliver. Phil can use specific performance as a remedy if: Kelsey is lawfully withholding delivery of Harmonica. Phil cannot effectively cure the defect. Harmonica has not been identified to the contract. Harmonica is unique.
Harmonica is unique.
Assume that Karen contracts to buy 10,000 CDs from Larry. Larry ships the CDs to Karen and she accepts them, but then fails to pay Larry. In this case, which of the following may Larry do? He may sue to recover the purchase price. He may cure the tender. He may reject the goods. He may cover the sale.
He may sue to recover the purchase price.
Radio Inc. has ordered component parts from Electro Co. deliverable on January 31. On January 28, Electro Co. sends Radio an e-mail clearly stating that the parts cannot be delivered until February 2. Later in the day on January 28 Radio contracts with another supplier for the parts. Late on January 29, Electro Co. notifies Radio that it can supply the parts on time after all. Radio tells Electro not to ship the parts. Has Radio breached the contract? -Yes, because Electro Co. has retracted its repudiation. -Yes, because Radio should have spoken with Electro Co. before contracting with a new supplier. -No, Radio could not have retracted after Electro contracted with the new supplier. -No, Radio could not retract the repudiation more than twenty-four hours later.
No, Radio could not have retracted after Electro contracted with the new supplier.
Murray, the buyer, breaches a contract with Rashad, the seller. Rashad notifies Murray that the contract is cancelled. In this situation: Murray may retract at any time. all of Murray's remaining obligations under the contract are discharged. Rashad can still pursue remedies against Murray for breach. Rashad must hold the goods for a reasonable time to give Murray an opportunity to retract.
Rashad can still pursue remedies against Murray for breach.
Under the UCC's perfect tender rule, what options does a buyer have when the seller tenders nonconforming goods? The buyer may only accept the goods. The buyer may accept all, or part, or none of the goods. The buyer may accept the goods only after informing the nearest Chamber of Commerce of the breach. The buyer must reject all the goods.
The buyer may accept all, or part, or none of the goods.
Topps Publishing, Inc., contracts for a sale of textbooks to University Bookstores, Inc. (UBI). Value Shipping Company, the carrier, transports the books to Wit Warehouse Company. Topps' right to stop delivery is lost when UBI's rights to the goods are acknowledged by: the appropriate government agency only. Value only. Value or Wit. Wit only.
Value or Wit.
