Deck 27: Remedies for Breach of Sales Contracts

Question 1

If a buyer chooses to cover the substituted goods purchased must be substantially identical to the contract goods.

Answer 1

False

Question 2

When a sales contract is broken by the buyer,the seller has only the remedies of lien and resale available.

Answer 2

False

Question 3

A cured transaction is a pledge of property by the buyer-debtor that enables the seller to take possession of the goods if the buyer fails to pay the amount owed.

Answer 3

False

Question 4

Some courts allow sellers to recover the profits they would have made if the buyer had completed the transaction.

Question 5

If a buyer refuses to pay for goods after an acceptance that was not revoked,the seller may bring action to recover the purchase price and any incidental damages.

Question 6

A buyer may reject the goods or revoke the acceptance for any defects in the goods.

Question 7

An action for breach of warranty generally must be brought within three (3)years of the breach.

Question 8

A buyer may revoke acceptance because of a seller's failure to complete promised repairs.

Question 9

Rejection of an improper tender of goods constitutes a revocation of acceptance on the part of the buyer.

Question 10

If goods are specially manufactured and the buyer refuses to take them,it is possible for the seller to recover as damages the full purchase price and keep the goods.

Question 11

A buyer seeking damages because of a breach of the sales contract must give the seller notice of the breach within a reasonable time after the buyer discovers or should have discovered it.

Question 12

Proof of substantial impairment of the value of a contract to the buyer is required to justify revocation of acceptance.

Question 13

Consequential damages are available to the buyer but not to the seller.

Question 14

The UCC statute of limitations applies to actions brought for remedies on the breach of a sales contract.

Question 15

A seller does not have the right to stop shipment if the buyer has received goods on credit and the seller learns that the buyer is insolvent.

Question 16

When a buyer has broken a sales contract,the seller may resell the goods or the balance of them in the seller's possession.

Question 17

A buyer returning to the seller a raincoat that shrank in the rain is revoking acceptance.

Question 18

In the absence of an agreement for the extension of credit to the buyer for the purchase of goods,and until the buyer pays for the goods or performs whatever actions the contract requires,the seller has the right to retain possession of the goods.

Question 19

When a buyer materially breaches a contract,the seller may cancel it.

Question 20

The UCC statute of limitations applies when a party is seeking recovery on strict tort liability,fraud or negligence.

Question 21

To revoke acceptance of goods:

A) any defect or nonconformity must be discovered.
B) the goods must be dangerously defective.
C) the nonconformity must substantially impair the value of the goods.
D) action must be taken by the buyer within 60 days of delivery.

Question 22

The tort statutes of limitations tend to be __________the UCC statute of limitations.

A) shorter than
B) longer than
C) equal to
D) excluded by

Question 23

Under UCC Article 2,specific performance is a remedy available only to buyers in those circumstances in which the goods are specially manufactured,unique,or rare.

Question 24

Which of the following is not an example of incidental damages recoverable by a seller?

A) expenses for the care of the goods after the buyer's breach
B) expenses for transportation of the goods after the buyer's breach
C) expenses for resale of the goods after the buyer's breach
D) expenses for the attorney's fees after the buyer's breach

Question 25

A buyer who cancels a sales contract because the seller fails to deliver the goods is entitled to recover as much of the purchase price as had been paid.

Question 26

A buyer can be barred from claiming a breach if the sales contract expressly states that the buyer will not assert any defenses against the seller.

Question 27

A buyer who breaches a contract after making a down payment generally will be subject to the rule that the seller may retain the full down payment as damages.

Question 28

When a plaintiff sues on the basis of strict tort liability,the action is subject to:

A) the UCC statute of limitations.
B) the appropriate state's tort statute of limitations.
C) no statute of limitations.
D) FTC approval.

Question 29

The commercially reasonable charges incurred by a seller in caring for goods after the buyer's breach are recoverable by the seller in an action for damages as:

A) contract damages.
B) punitive damages.
C) additional damages.
D) incidental damages.

Question 30

A buyer may reject a tender of delivery:

A) if the goods do not conform to the contract in some way .
B) only if the goods have a substantial defect.
C) unless the seller promises to cure the defective tender.
D) unless the goods have been sold on credit.

Question 31

A seller may cancel a sales contract if the buyer:

A) wrongfully rejects the goods.
B) repudiates the contract.
C) fails to make a payment due on or before delivery.
D) all of the above.

Question 32

A seller's right to retain possession of goods until the seller has been paid is called a:

A) seller's lien.
B) buyer's lien.
C) merchandise estoppel.
D) nonpayment tort.

Question 33

If a seller elects to resell the goods remaining in the seller's possession after the buyer breaks the contract,the seller:

A) must always give notice of the sale to the original buyer.
B) is never required to give notice of the sale to the original buyer.
C) is required to follow strict standards in the resale of the goods.
D) is not required to give notice of the sale to the original buyer when the goods are perishable.

Question 34

In an action by a third party against the buyer that is based on the seller's breach of warranty,the buyer must give notice of the action to the seller.

Question 35

The statute of limitations for breach of a sales contract:

A) may be reduced between merchants to one year.
B) may be expanded by the buyer and the seller to six years.
C) begins to run from the signing of the contract.
D) always requires a notice to the seller to activate the statute.

Question 36

Consumer protection law prohibits the waiver of defenses in consumer contracts.

Question 37

A defrauded buyer may avoid the contract and recover damages.

Question 38

Under both the CISG and the UCC,a buyer may reject goods only if the tender of the goods is a fundamental breach of the contract.

Question 39

A liquidated damages clause is a contractual provision stipulating the amount of damages to be paid in the event of default or breach of contract.

Question 40

The right of a buyer to cancel or rescind a sales contract is never impacted by a delay in exercising that right.

Question 41

In the case of a breach of warranties,the buyer:

A) should not notify the seller.
B) is required to notify the seller.
C) does not have the option to resell the goods.
D) is not able to recover consequential damages.

Question 42

When goods are sold for consumer use and personal injuries are sustained,a total exclusion of liability in the sales contract is:

A) enforceable.
B) unenforceable.
C) unconscionable.
D) both b.and c.

Question 43

On January 15,2012,Anders brought an action against Barnes for breach of a contract for the sale of electronic parts.The breach occurred on January 10,2008,and Anders discovered the breach on January 20,2008.The state statute of limitations for contract actions is five years.Barnes raised the UCC statute of limitations as a defense to the action.Is this defense valid?

Question 44

When a buyer has possession of goods after rightfully rejecting them,the buyer is treated:

A) the same as a seller in the possession of goods after default by a buyer.
B) as being strictly liable for the safety of the goods.
C) the same as if an entrustment had been created.
D) as an insurer of the goods until the seller retakes possession.

Question 45

The buyer may cancel the contract if the:

A) seller fails to deliver the goods.
B) seller has repudiated the contract.
C) goods have been rightfully rejected.
D) all of the above.

Question 46

Fran had a very rare,and therefore expensive,automobile that she wished to sell.Fran worried that if the first attempt at selling the auto failed,the value of the auto might come into question.To prevent any potential loss of profit if the auto needed to be resold,Fran created a sales contract that provided for an estimation of damages should the contract later be breached by the potential buyer.A potential buyer was found,and the contract was signed.Later,because of a lack of sufficient financing,the buyer breached the sales contract.Fran requested the estimated damages provided for in the contract.The buyer refused,calling the clause unconscionable and excessive.Can Fran recover?

Question 47

When a seller breaches a contract for the sale of goods to a buyer,the buyer is entitled to specific performance of the contract if the:

A) goods are unique.
B) market cost of the goods has increased.
C) goods can be purchased in any major city in the country.
D) buyer's customers will be disappointed if the buyer does not obtain the goods.

Question 48

Peter contracted to purchase five (5)cases of soda and a vacuum cleaner because Peter was planning a party for his son's graduation.Both contract forms that Peter signed contained exclusion of damages clauses;i.e. ,each contract stated that the buyer had no right to sue the seller in the event that the goods were defective.Instead,each seller's sole obligation was to replace or repair the defective goods within a reasonable time of being notified of the defect(s).These clauses in the contract were set forth in the ordinary type of the contract and were not especially conspicuous.
The vacuum cleaner was delivered on Friday,the day before the party,when the rugs in Peter's home were quite dirty.The vacuum cleaner did not work properly.Peter notified the seller,who responded by saying that nothing could be done until the following week.Frantic because guests were coming,Peter hired a cleaning service to clean the rugs.
While serving the soda to guests,one of the bottle caps burst from an unopened bottle with great force.It struck Peter in the eye and he required medical treatment and hospitalization.
Eventually,Peter sued both sellers for damages.Peter sought the expense of the cleaning service from one.From the other,Peter sought damages for personal injury,including his medical and hospitalization expenses.Both defendant-sellers cited the exclusion of damages clauses as their defense.

Question 49

Under the CISG,a buyer may reject goods

A) consistent with the right of rejection set forth in the UCC.
B) if the goods are nonconforming to the contract in any way.
C) only if the tender is a fundamental breach of the contract.
D) only if the tender is illegal in subject matter and/or purpose.

Question 50

A liquidation of damages clause in a consumer contract is enforceable if it:

A) is not in excess of twice the provable damages.
B) is agreed to by both parties to the contract.
C) reasonably attempts to estimate the actual harm caused by a breach.
D) is a reasonable amount designed to punish the breaching party.

Question 51

If a buyer procures the same or similar goods as those involved in the sales contract breached by the seller,the buyer:

A) loses all rights to prosecute for breach.
B) is said to have validated the seller's action.
C) is said to have covered.
D) is also in breach.

Question 52

In the absence of a liquidated damages clause and in the absence of proof of greater damages,the seller's damages are computed as

A) 25% of the purchase price or $500,whichever is less.
B) 25% of the purchase price or $500,whichever is greater.
C) 20% of the purchase price or $500,whichever is greater.
D) 20% of the purchase price or $500,whichever is less.

Question 53

Consumer defenses:

A) are preserved by a FTC regulation.
B) are provided for by the CISG.
C) are contained in UCC Article 2.
D) none of the above.