Deck 18: Remedies for Breach of Sales and Lease Contracts

Question 1

Tender of delivery occurs when the seller and buyer exchange promises and the bilateral contract is formed.

Answer 1

False

Question 2

In general,a seller's right to cure lasts for a reasonable time beyond the buyer's discovery of a nonconformity.

Answer 2

False

Question 3

The seller's or lessor's general obligation is to transfer and deliver the goods to the buyer or lessee.

Answer 3

True

Question 4

If the seller or lessor has no place of business,the place of delivery is the seller's or lessor's residence.

Question 5

When a seller tenders goods,some of which are conforming goods and some of which are not conforming,the buyer must accept the conforming goods and must either reject all of the nonconforming goods or accept all of the nonconforming goods.

Question 6

Under the UCC,a seller is required to notify the buyer of shipping information so that the buyer knows when and where the goods will be delivered.

Question 7

If the goods or tender of delivery fail in any respect to conform to the contract,the buyer or lessee may opt (1)to reject the whole shipment,(2)to accept the whole shipment,or (3)to reject part and accept part of the shipment.

Question 8

A seller cannot telephone the buyer at 12:01 a.m.and say that the buyer has fifteen minutes to accept delivery.

Question 9

Sales contracts that require the seller to send the goods to the buyer,but not to a specifically named destination,are called "point-of-origin" contracts.

Question 10

If a buyer accepts nonconforming goods,the buyer may not seek remedies against the seller.

Question 11

Tender of delivery includes the requirement that the seller or lessor give the buyer or lessee any notification reasonably necessary to enable delivery of goods.

Question 12

Buyer has ordered 100 cases of scotch.If the seller delivers 99 cases of scotch and one case of bourbon,the buyer may reject the entire shipment and send it all back.

Question 13

Unless otherwise agreed in noncarrier cases,the place of delivery is the seller's or lessor's place of business.

Question 14

Tender of delivery includes the requirement that the seller or lessor put and hold conforming goods at the buyer's or lessee's disposition.

Question 15

The buyer's or lessee's general obligation is to accept and pay for the goods.

Question 16

Even if the right to cure has expired,the seller retains the right to replace any nonconforming goods.

Question 17

The seller's or lessor's basic obligation is the tender of delivery,or the transfer and delivery of goods to the buyer or lessee in accordance with a sales or lease contract.

Question 18

The UCC does not allow the parties to waive the perfect tender rule.

Question 19

A sales contract that requires the seller to deliver the goods to the buyer's place of business or another specified destination is a destination contract.

Question 20

When one party breaches a sales or lease contract,the Uniform Commercial Code (UCC)provides remedies designed to place the injured party in as good a position as if the breaching party's contractual obligations were fully performed.

Question 21

Acceptance of a part of any commercial unit constitutes rejection of the entire unit.

Question 22

If the goods conform to the contract,the seller pays for the inspection.

Question 23

A commercial unit is a unit of goods that commercial usage deems is a single whole for purpose of sale.

Question 24

Because acceptance of goods triggers the obligation to pay for them,acceptance can occur only by an affirmative statement of the buyer that the buyer has accepted the goods.

Question 25

Acceptance occurs when the buyer or lessee fails to effectively reject the goods within a reasonable time after their delivery or tender by the seller or lessor.

Question 26

If the seller requires cash payment,the buyer must be given an extension of time necessary to procure the cash.

Question 27

Unless otherwise agreed,payment for goods must be in cash at the time of delivery.

Question 28

Unless otherwise agreed,the buyer or lessee has the right to inspect goods that are tendered,delivered,or identified in a sales or lease contract prior to accepting or paying for them.

Question 29

The UCC provides that if goods identified in a sales or lease contract are totally destroyed without the fault of either party before the risk of loss passes to the buyer or the lessee,the contract is voidable.

Question 30

Acceptance of goods can be revoked in fewer circumstances than goods can be initially rejected.

Question 31

A buyer or lessee can revoke acceptance of goods only if the nonconformity is one that substantially impairs the value of the goods to the buyer.

Question 32

Buyers and lessees may only accept delivery of a "commercial unit."

Question 33

If the goods are rejected for nonconformance,the cost of inspection can be recovered from the seller.

Question 34

An installment contract is one in which payment for the goods is made over time in a series of agreed-upon payments.

Question 35

An installment contract is a contract that requires or authorizes goods to be delivered and accepted in separate lots.

Question 36

If the buyer pays by check,payment is conditional on the check being honored when it is presented to the bank for payment.

Question 37

Generally,a buyer may take physical possession of the goods and inspect them within a reasonable time without having accepted the goods.

Question 38

Acceptance occurs when the buyer or lessee signifies to the seller or lessor in words or by conduct that the goods are conforming or that the buyer or lessee will take or retain the goods despite their nonconformity.

Question 39

Goods can be paid for in any manner currently acceptable in the ordinary course of business (e.g.,check,credit card)unless the seller demands payment in cash or unless the contract names a specific form of payment.

Question 40

If inspected goods do not conform to the contract,the buyer or lessee may reject them without paying for them.

Question 41

If the contracted-for goods or the seller's or lessor's tender of delivery fails to conform to a sales or lease contract in any way,the buyer or lessee has the right to reject nonconforming goods or improperly tendered goods and may (1)reject the whole,(2)accept the whole,or (3)accept any commercial unit and reject the rest.

Question 42

A seller or lessor has the right to cancel a contract if the buyer or lessee breaches the contract by rejecting or revoking acceptance of the goods,failing to pay for the goods,or repudiating all or any part of the contract.

Question 43

A lessor may reclaim goods in the possession of the lessee if the lessee is in default of the contract.

Question 44

A seller or lessor cannot collect damages in addition to other remedies.

Question 45

The buyer or lessee must hold any rightfully rejected goods with reasonable care for a reasonable time.

Question 46

If a buyer or lessee wrongfully refuses to make payments when due and this occurs before delivery,the seller or lessor may withhold delivery of the goods.

Question 47

A buyer who rightfully rejects goods has a duty to notify the seller of the rejection.

Question 48

In a case of unfinished goods,the seller or lessor may choose to complete the manufacture of the goods and resell,release,or otherwise dispose of them to another party.

Question 49

If the buyer or lessee rejects the goods,there are no circumstances under which the buyer or lessee may sell the goods on the seller's or lessor's behalf.

Question 50

If goods are already in transit when a buyer fails to make payment when due,the seller can stop them only if they amount to a larger shipment such as a truckload or carload.

Question 51

Any disposition of reclaimed goods by the seller or lessor must be made in good faith and in a commercially reasonable manner.

Question 52

The seller or lessor may use self-help to reclaim goods if it is discovered after delivery that the buyer or lessor is insolvent.

Question 53

Revocation of acceptance must occur before there is any substantial change in the condition of the goods.

Question 54

A seller may refuse to deliver goods to a buyer discovered to be insolvent.

Question 55

A seller or lessor may cancel a sales or lease contract if the buyer or lessee rejects or revokes acceptance of the goods,fails to pay for the goods,or repudiates the contract in part or in whole.

Question 56

Revocation of acceptance is not effective until the seller or lessor is notified.

Question 57

Once the buyer has accepted goods,whether the goods are conforming or nonconforming,that acceptance may not be revoked.

Question 58

A seller or lessor who discovers that the buyer or lessee is insolvent before the goods are delivered may refuse to deliver as promised unless the buyer or lessee pays cash for the goods.

Question 59

In a case of unfinished goods,the seller's or lessor's only remedy is to cease manufacturing the foods and resell them for scrap or salvage value.

Question 60

If the buyer or lessee chooses to reject goods,he or she must identify defects that are ascertainable by reasonable inspection.

Question 61

A buyer or lessee may obtain specific performance of a sales or lease contract if the buyer or lessee files notice within 10 days of a breach that specific performance is demanded.

Question 62

A buyer or lessee who rightfully cancels a contract is discharged from any further obligations on the contract.

Question 63

Under Article 2 of the UCC,the remedy known as cover is a buyer's remedy.

Question 64

Under the UCC,the parties are free to set reduce the statute of limitations applicable to a contract but may not extend it.

Question 65

A court order is required to force a party to provide adequate assurance unless a repudiation or anticipatory repudiation has occurred.

Question 66

The UCC statute of limitations provides that an action for breach of any written or oral sales or lease contract must commence within three (3)years after the cause of action accrues.

Question 67

If one party to a contract has reasonable grounds to believe that the other party either will not or cannot perform his or her contractual obligations,an adequate assurance of performance may be demanded orally or in writing.

Question 68

Capture is a remedy available to a seller giving them the right to recover shipped goods which are part of an installment contract,when the buyer has become insolvent or otherwise refuses to pay for all or part of the total contract.

Question 69

When there is an anticipatory repudiation,the aggrieved party will not have a cause of action until the time that performance was due.

Question 70

In noncarrier cases,unless otherwise agreed,where is the place of delivery for a sale of goods located at the seller's place of business?

A) the seller's place of business
B) the buyer's place of business
C) the lender's place of business
D) the trustee's place of business
E) the bailee's place of business

Question 71

If the buyer or lessee makes partial or full payment for goods before they are received,and the seller or lessor becomes insolvent within 10 days after receiving the first payment,the buyer or lessee may recover the goods from the seller or lessor.

Question 72

If the buyer exercises the right to inspect goods,even if the goods are rejected for nonconformance,the buyer is responsible for the costs of inspection and cannot recover the costs from the seller.

Question 73

A party who requests assurance of performance for a commercially reasonable reason remains obligated to perform its own obligations even if adequate assurance is not received from the other party.

Question 74

The right to replevy is the buyer's or lessee's right to recover goods from a seller or lessor who is wrongfully withholding the goods.

Question 75

Regardless of whether it is commercially reasonable to do so,a party making a demand for assurance of performance may suspend his or her performance until adequate assurance of due performance is received from the other party.

Question 76

Replevin actions are not available for goods identified in a lease contract.

Question 77

A replevin action under Article 2 of the UCC requires that the goods be unique.

Question 78

In a replevin action,the buyer or lessee must show that he or she was unable to cover or that attempts at cover will be unavailing.

Question 79

If a buyer or lessee rightfully repudiates a sales or lease contract,the buyer or lessee may recover the difference between the contract price (or original rent)and the market price (or rent)at the time the buyer or lessee learned of the breach,but incidental damages may not be recovered.

Question 80

The basic obligation of a seller of goods to transfer and deliver goods to the buyer in accordance with the terms of the contract is known as:

A) performance of delivery.
B) anticipatory tender.
C) delivery as agreed.
D) anticipatory delivery.
E) tender of delivery.