Deck 17: The Sales Contract: Performance, Breach, and Remedies for Breach

Question 1

Even if the seller tenders nonconforming goods, the buyer must accept them.

Answer 1

False

Question 2

The buyer has the right to inspect goods before accepting them.

Answer 2

True

Question 3

Lemon, owner of a stationery store, accepted and paid for thirty dozen computer disks from the Zanny Stationery Company. After selling some of the disks, Lemon began to get complaints that the disks were defective. Lemon's legal remedy against the Zanny Stationery Company is

A) none.
B) to resell the goods and sue Zanny for damages.
C) to sue Zanny for breach of warranty.
D) to sue Zanny for specific performance.

Answer 3

C

Question 4

If the seller breaches the sales contract, the buyer has a duty to cover.

Question 5

If the seller breaches the contract prior to delivery of the goods, the buyer may cancel the contract and

A) sue for damages.
B) cover.
C) exercise the right of specific performance or replevin.
D) select one or all of these remedies.

Question 6

The perfect tender rule under the UCC obligates the seller to tender goods that exactly meet the requirements of the contract.

Question 7

A buyer may sue for breach of warranty only after notifying the seller that the goods are nonconforming.

Question 8

An injured party may sue for only one remedy for breach of a sales contract.

Question 9

Only consumers who buy items from merchants have the right to cover.

Question 10

Any breach by a seller entitles the buyer to cancel the contract and sue for damages.

Question 11

A buyer's basic duty under a sales contract includes the obligation to

A) accept nonconforming goods.
B) insist upon delivery of the goods.
C) "cure."
D) accept conforming goods and pay for them.

Question 12

If the seller breaches a sales contract, the buyer may

A) sue for damages.
B) sue for specific performance.
C) cancel the contract and cover.
D) all of these.

Question 13

Remedies for breach of contract may be included in the sales contract.

Question 14

In a breach of warranty suit, damages are the amount needed to correct the defect.

Question 15

The buyer may sue for specific performance for all sales contracts.

Question 16

If some part of a shipment of goods does not conform to the contract, the

A) seller generally must be given an opportunity to cure the defect.
B) buyer can immediately reject the entire shipment and automatically cancel.
C) buyer cannot accept the part that is conforming.
D) buyer must accept the shipment at a reduced price.

Question 17

Remedies for breach of sales contract under the UCC are available only to the buyer.

Question 18

Remedies for breach of sales contract under the UCC are intended to place the injured party in as good a position as if the contract had not been breached.

Question 19

If the seller breaches the contract but no real damages occur, a court is likely to award punitive damages to the buyer.

Question 20

The seller has the right to cure the defect of any nonconforming goods that the buyer rejects.

Question 21

If a sales contract requires the seller to ship the goods to the buyer, a proper delivery occurs when the seller places the goods in the possession of a(n) ____________________ and notifies the buyer that the goods have been shipped.

Question 22

Ronco, a retailer of toys, rejected a shipment of dolls from Jasper, a wholesaler, because they were not the original ones that were ordered. Suppose that the original contract price of each doll was $20.00 and that the price from the other seller Ronco finally purchased the dolls from was $22.00 each. If Ronco had originally ordered 2,500 dolls, what damages would he (Ronco) be entitled to recover from Jasper if he purchased the same number of dolls from the other seller?

A) $5,000
B) $50,000
C) $55,000
D) An amount offered by Jasper

Question 23

An unpaid seller has the right to stop delivery of goods purchased on credit that were delivered to a carrier for shipment to the buyer whenever the

A) buyer fails to make the required payment within the required time once the goods have been delivered to him or her.
B) buyer rejects the contract after receiving the goods.
C) seller becomes insolvent.
D) seller learns of the buyer's insolvency while the goods are still in transit.

Question 24

When a buyer breaches a sales contract by refusing to accept conforming goods, a common remedy of the seller is to

A) exercise the right of replevin.
B) demand specific performance.
C) sue for nondelivery.
D) resell the goods.

Question 25

If either the seller or buyer refuses to carry out his or her part of a sales agreement, a(n) ____________________ occurs.

Question 26

A buyer is insolvent under the UCC when he or she

A) will not pay debts as they become due.
B) cannot pay debts when they become due.
C) wrongfully repudiates a contract.
D) cannot exercise the right of replevin.

Question 27

One remedy that is not available to a seller is

A) suing for breach of warranty.
B) stopping the goods in transit.
C) reclaiming the goods.
D) rescinding the contract.

Question 28

The seller performs a sales contract by offering ____________________ goods to the buyer.

Question 29

If a buyer breaches the sales contract, the seller may sue for

A) the purchase price.
B) the market price.
C) punitive damages.
D) none of these.

Question 30

A buyer can recover goods that are not unique and are wrongfully withheld by the seller through the remedy of

A) cover.
B) replevin.
C) cure.
D) repossession.

Question 31

The price at which goods are currently being sold is called the

A) market price.
B) contract price.
C) cover.
D) tender price.

Question 32

Ronco, a retailer of toys, rejected a shipment of dolls from Jasper, a wholesaler, because they were not the original ones that were ordered. Ronco called Jasper and requested that the proper dolls be shipped. Jasper said he could not because his stock had been depleted. Ronco then went to another seller, purchased the dolls he wanted from that seller, and sued Jasper for the extra costs he (Ronco) incurred. In this case, Ronco used the remedy of

A) specific performance.
B) cover.
C) replevin.
D) conformity.

Question 33

If the seller breaches a contract for the sale of goods by not delivering them to the buyer, the buyer may demand that the seller deliver the goods described in the sales agreement if

A) the goods are very common.
B) the goods are unique or there are no suppliers of equal quality.
C) the buyer first brings a lawsuit.
D) there is no other remedy available to the buyer.

Question 34

The buyer performs a sales contract by accepting and ____________________ for goods according to the terms of the contract.

Question 35

If the seller delivers nonconforming goods to the buyer after time for performance is past, the buyer may:

A) accept the nonconforming goods.
B) reject all the goods
C) accept any part of the goods and reject the rest.
D) all of these.

Question 36

After the buyer accepts nonconforming goods from a seller without objection having had a reasonable opportunity to inspect them the buyer may no longer ____________________ them.

Question 37

If the buyer of goods breaches the sales contract by refusing to accept conforming goods, a remedy available to the seller under the UCC is:

A) cover.
B) simply to cancel all performance due the buyer under the terms of the contract.
C) to resell the goods and sue the buyer for damages.
D) simply to cancel all performance due the buyer under the terms of the contract and to resell the goods and sue the buyer for damages.

Question 38

A seller may reclaim goods delivered to an insolvent buyer if the seller makes a demand within

A) two months.
B) thirty days.
C) ten days.
D) four years.

Question 39

If a seller wishes to reclaim goods sold to a buyer after the buyer has received the goods, the seller must prove

A) that the buyer received the goods on credit.
B) that the buyer was insolvent when the goods were received.
C) that he or she (the seller) demanded the return of the goods within ten days after the buyer received the goods.
D) all of these.

Question 40

The remedy of specific performance will be granted only if

A) the buyer cannot buy substitute goods elsewhere.
B) the goods are unique.
C) the goods are no longer being offered for sale by other sellers.
D) all of these.

Question 41

How does the perfect tender rule under the UCC change the obligations of the seller and the buyer as their obligations existed under the common law?

Question 42

A(n) ____________________ allows a seller to retain possession of goods until they are paid for in full.

Question 43

If a person cannot pay debts when they are due, the person is said to be ____________________.

Question 44

A buyer may sue for ____________________ to obtain the goods covered by the sales contract.

Question 45

What are the obligations of the seller and the buyer regarding performance of the sales contract?

Question 46

In a sales contract, the seller and buyer may provide for ____________________ different from those provided for in the UCC.

Question 47

What are the implications for the buyer if, before accepting delivery of the goods, she fails to inspect them for defects?

Question 48

Paragon Paint Co. sold 100 gallons of paint on credit to Williams Hardware. Two days after giving the paint to Northern Trucking for delivery to Williams, Paragon discovered that Williams had filed for bankruptcy. What action should Paragon take?

Question 49

List two remedies available to the seller and the buyer for breaching the sales contract.

Question 50

To ____________________ means to obtain substitute goods elsewhere when the seller breaches the sales contract.