Deck 16: Performance Breach of Sales Lease Contracts

Question 1

Goods may be rejected only if they are substantially nonconforming with the terms of the contract.

Answer 1

False

Question 2

In general,a buyer's duty to pay for tendered goods is absolute once the buyer has had an opportunity to inspect the goods.

Answer 2

True

Question 3

Tender of delivery can occur in any manner.

Answer 3

False

Question 4

A seller can exercise the right to cure within the contract time for performance.

Question 5

A seller can terminate a contract on the basis of commercial impractica?bil?ity if in?creases in the seller's costs threaten to undercut its profits.

Question 6

A delay in delivery of goods under a sales contract is not a breach if per?form?ance is commercially impracticable.

Question 7

Under a destination contract,a seller must deliver the goods to a carrier.

Question 8

A seller fulfills a contract by deliver?ing goods that conform to the terms.

Question 9

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.

Question 10

If a nonconforming installment substantially impairs the value of a whole contract,the buyer can treat the entire contract as having been breached.

Question 11

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.

Question 12

If,before the time for performance,a buyer communicates an intent not to perform,the seller can consider the buyer in breach and pursue a remedy.

Question 13

The duties and obligations of the parties to a contract include those speci?fied by custom.

Question 14

A seller's tender of goods is a valid tender even if it does not conform to a contract in a minor way.

Question 15

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.

Question 16

Under a shipment contract,the seller is respon?sible for making sure that the goods are shipped properly.

Question 17

Goods may be tendered in installments if the parties prefer it that way.

Question 18

A seller cannot exercise the right to cure once the time for performance un?der the contract has expired.

Question 19

Until a buyer actually inspects goods,acceptance will be presumed.

Question 20

Unless the parties agree otherwise,a buyer or lessee must pay for goods at the time and place of their receipt.

Question 21

A buyer who obtains substitute goods to replace goods that a seller did not deliv?er can also recover damages from the seller.

Question 22

Under no circumstances can a buyer cancel a contract.

Question 23

Acceptance of goods precludes a buyer from exercising a right of rejection but not from pursuing other remedies.

Question 24

If a lessor's tender of delivery fails to conform to a contract in any way,the lessee cannot accept the goods.

Question 25

A lessor's failure to make proper delivery of unique goods under a con?tract will not usu?ally give the lessee the right to specific performance.

Question 26

A lessee's breach of a contract will usually give the lessor the right to cancel the contract.

Question 27

Pep Paints agrees to sell to Quality Painters Grade A-1 latex outdoor paint to be delivered May 8.On May 7,Pep tenders Grade B-2 paint.Quality re?jects the Grade B-2 paint.Two days later,Pep tenders Grade C-3 paint with an offer of a price allowance.Pep has

A)additional,unlimited time to cure.
B)a reasonable,additional time to cure.
C)one more day to cure.
D)no more time to cure.

Question 28

If a buyer breaches a contract and the seller resells the goods to another party,the seller cannot recover any loss from the breaching buyer.

Question 29

If,while goods are in transit,a seller learns that a buyer is insolvent,the seller can stop the delivery of the goods.

Question 30

When a buyer refuses to pay for goods that conform to the contract,the seller's options do not include the right to cancel the contract.

Question 31

Incidental damages include all reasonable expenses incurred because of a breach of contract.

Question 32

If a buyer repudiates a contract,the seller cannot re?cover damages.

Question 33

Clear Sight Company,which is based in Delaware,agrees to sell fifty win?dows,currently stored in Florida,to Great View,Inc. ,which is based in Hawaii.Absent an agreement to the contrary,deliv?ery will occur in

A)California.
B)Delaware.
C)Florida.
D)Hawaii.

Question 34

Heavy Concrete Company contracts for a sale of its products to Interstate Construction,Inc.For Heavy to tender delivery of goods,it must

A)give Interstate notice to take delivery and hold conforming goods at its disposal.
B)neither give Interstate notice nor hold conforming goods at its disposal.
C)only give Interstate notice.
D)only hold conforming goods at Interstate's disposal.

Question 35

Custom Tableware,Inc. ,contracts for a sale of cutlery to Diners Cafe un?der a shipment contract.Custom must

A)contract for transportation of the cutlery and tender to Diners docu?ments to obtain its possession.
B)neither contract for transportation of the cutlery nor tender to Diners documents to obtain its possession.
C)only contract for transportation of the cutlery.
D)only tender to Diners documents to obtain pos?session of the cutlery.

Question 36

A buyer who rightfully rejects nonconforming goods can resell the goods and keep the proceeds without accounting to the seller for the amount.

Question 37

If the parties to a sales contract state that a certain remedy is exclusive,then it is the sole remedy.

Question 38

Food Packages,Inc. ,agrees to sell 50,000 6-ounce yogurt containers to Great Dairy Company.Food can obtain only 20,000 of the 6-ounce contain?ers,but also ships 30,000 more expensive 8-ounce containers for the same price.Under these circumstances,Great

A)cannot reject the delivery,and Food cannot later replace the noncon?forming containers.
B)cannot reject the delivery,but Food can later replace the noncon?forming containers.
C)may reject the delivery,and notice to Great of Food's intent to cure will give Food a reasonable time to replace the nonconforming containers.
D)may reject the delivery,but Food cannot later replace the noncon?forming containers.

Question 39

A buyer who accepts conforming goods cannot revoke the acceptance.

Question 40

A buyer who accepts nonconforming goods cannot revoke the acceptance.

Question 41

Gamma Company contracts to provide several manufacturers with tin.A cartel of tin-producing countries embargoes future shipments of tin to Gamma so that it cannot fulfill its contracts.Gamma

A)can substitute some other material for the tin.
B)is excused from the performance of its contracts.
C)is liable for breach of contract.
D)must still supply the tin needs of its customers.

Question 42

Olympic Steel Corporation contracts to sell steel to Precision Machining,Inc.After Olympic ships the steel,Precision breaches the contract.Incidental damages arising from the breach include the costs to Olympic of

A)designing the steel.
B)making the steel.
C)selling the steel.
D)transporting the steel.

Question 43

Heavy Equipment,Inc. ,and Ideal Construction Company enter into a con?tract for the sale of a crane.Heavy Equipment does not know that Ideal is insolvent.Ideal sells the crane to Jiffy Build,Inc. ,a good faith purchaser.Heavy Equipment may

A)not reclaim the crane.
B)reclaim the crane if demand is made in a timely manner.
C)reclaim the crane if Ideal is going out of business entirely.
D)reclaim the crane if Jiffy Build is paying Interstate for it on credit.

Question 44

Fact Pattern 16-1
Internet Cafes,Inc. ,contracts to buy all of its requirements for coffee,at a mini?mum of 1 million pounds per year,from Java Corporation for six years.After three years,Internet tells Java that it plans to sell its company to Kwik Eateries,Inc.Kwik refuses to assure Java that it will continue Internet's contract.
Refer to Fact Pattern 16-1.Kwik's refusal constitutes

A)a justified response based on Kwik's relation to the contract.
B)an assignment of Internet's rights under the contract.
C)a reasonable suspension of performance under the contract.
D)a repudiation of the contract.

Question 45

Square B Ranch and Tom enter into a contract on August 1 in which Square B agrees to sell 200 cattle to Tom.Tom cancels the con?tract ten days later.Square B is enti?tled to

A)force Tom to accept the cattle and recover the contract price.
B)keep the cattle and recover the contract price from Tom.
C)recover any resulting damages from Tom.
D)none of the choices.

Question 46

According the court in Case 16.1,Maple Farms,Inc.v.City School District of Elmira,the defense of commercial impracticability will not excuse the performance of a contractual obligation when there is an increase in the seller's costs while the contract is in force

A)unless the increase in the seller's costs is substantial.
B)under any circumstances.
C)unless the increase in the seller's costs makes it impossible for the seller to perform without losing money.
D)unless the increase in the seller's costs was not foreseeable at the time the contract was formed.

Question 47

Craft Engineering,Inc. ,contracts for a sale of technical instruments to Delta Design Company.Before the date on which performance is due,Craft notifies Delta that it will not perform.This is

A)anticipatory repudiation.
B)perfect tender.
C)rejection of performance.
D)revocation of acceptance.

Question 48

Professional Products Company contracts to deliver emergency medical supplies to Rescue & Relief Corporation using only Sky Airways.If Sky de?clares bankruptcy,then

A)only Rescue & Relief may elect to perform the contract.
B)Professional may deliver the goods in any reasonable manner.
C)Sky must designate a substitute carrier.
D)the entire contract is void.

Question 49

LowPrice Footwear Company contracts to buy 10,000 pairs of boots from Massive Boots,Inc.LowPrice becomes insolvent.Massive may insist that LowPrice

A)accept early delivery of the order.
B)pay cash.
C)post a bond to guarantee payment.
D)submit a letter from a court providing assurances of payment.

Question 50

Orchard Farms contracts with four food companies to sell its entire crop of oranges.Orchard loses half of the crop to an unexpected insect infestation.Orchard must

A)apportion its surviving crop fairly among its customers.
B)breach some of its contracts.
C)buy elsewhere as many oranges as needed to satisfy its contracts.
D)substitute other fruit for the oranges.

Question 51

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

A)$1,500.
B)$1,000.
C)$500.
D)$0.

Question 52

Topps Publishing,Inc. ,contracts for a sale of textbooks to University Bookstores,Inc.(UBI).Value Shipping Company,the carrier,transports the books to Witte Warehouse Company.Topps' right to stop delivery is lost when UBI's rights to the goods are acknowledged by

A)the appropriate government agency only.
B)Value only.
C)Witte only.
D)Value or Witte.

Question 53

Hi-Tech Company contracts to sell fiber optic cable to Internet Services,Inc.Hi-Tech may bring an action to recover the purchase price and inciden?tal damages if Internet

A)accepts the cable and pays for it.
B)accepts the cable but does not pay for it.
C)rejects the cable.
D)revokes acceptance of the cable.

Question 54

Glide Chair Company contracts to deliver 100 chairs to Home Furnishings Store on May 1.Glide tells Home on April 15 that it is canceling the con?tract be?cause its workers have gone on strike.Home may

A)await Glide's performance,sue,or suspend its own performance.
B)only await Glide's performance for a commercially reasonable time.
C)only sue Glide for breach of contract.
D)only suspend its own performance.

Question 55

On May 1,Silver Star Auto Sales agrees to sell a car to Troy.Five days later,Troy cancels the contract.Silver Star is enti?tled to

A)force Troy to take the car.
B)recover any resulting damages from Troy but not resell the car.
C)resell the car and recover any resulting damages from Troy.
D)resell the car but not recover any damages from Troy.

Question 56

Quality Equipment Company contracts for a sale of goods to Regional Sales Corporation.Quality can enforce its right to payment

A)only after Regional has actually inspected the goods.
B)only after Regional has had an opportunity to inspect the goods.
C)only before Regional has inspected the goods.
D)whether or not Regional has had the chance to inspect the goods.

Question 57

Garden Vegetable Farm and Hungry Folks Restaurant,Inc. ,enter into a contract for a sale of tomatoes.Hungry declares bankruptcy.Garden can stop deliv?ery of the goods in transit

A)only if the quantity is at least a carload.
B)only if the quantity is at least a planeload.
C)only if the quantity is at least a truckload.
D)regardless of the quantity.

Question 58

Regal Manufacturing Company contracts to sell sweaters to Superb Styles Store.Before the sweat?ers are delivered,Superb indicates that it will not be able to pay.Regal can resell the goods

A)after finishing the job and identifying the goods,or stopping the job.
B)only after finishing the job and identifying the goods.
C)only if Regal immediately stops the job.
D)under no circumstances.

Question 59

Sweet Produce Company contracts with Tasty Restaurant to ship six hun?dred heads of lettuce in three equal installments.When the first install?ment arrives,ten heads of lettuce are rotten.Tasty may

A)cancel the contract.
B)recover from Sweet for breach of the entire contract.
C)reject the first installment only.
D)use as much of the lettuce as it wishes without paying for it.

Question 60

Fact Pattern 16-1
Internet Cafes,Inc. ,contracts to buy all of its requirements for coffee,at a mini?mum of 1 million pounds per year,from Java Corporation for six years.After three years,Internet tells Java that it plans to sell its company to Kwik Eateries,Inc.Kwik refuses to assure Java that it will continue Internet's contract.
Refer to Fact Pattern 16-1.Java can

A)assign its rights under the contract but cannot terminate it.
B)do nothing.
C)suspend performance under the contract until Java is fully paid.
D)terminate the contract and seek damages.

Question 61

Digital Video Company contracts to sell DVD players to E-lectric Stores,Inc.Digital Video ships nonconforming goods,which E-lectric accepts.E-lectric can recover damages equal to the difference between

A)E-lectric's sale price and the contract price.
B)the contract price and the value of the goods as promised.
C)the value of the goods as promised and their value as accepted.
D)the value of the goods as accepted and E-lectric's sale price.

Question 62

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

A)resell or return the goods only.
B)resell or store the goods only.
C)return or store the goods only.
D)resell,return,or store the goods.

Question 63

BBQ Cookery,Inc. ,makes and sells barbecue grills to Costs Less Mart,a retailer,which sells a grill to Danton,a consumer.BBQ and Costs Less include in their sales contracts a limitation on consequential damages for personal injuries from a breach of warranty.This is prima facie un?conscionable with respect to

A)BBQ only.
B)BBQ and Costs Less,but not Danton.
C)Costs Less and Danton,but not BBQ.
D)Danton only.

Question 64

Tech Electronics Corporation agrees to sell to Uniworld Retail Stores fifty televisions with LCD screens,to be delivered in five equal in?stallments.The first installment consists of nine TVs with LCD screens and one with a CRT screen.Can Uniworld cancel the whole contract?

Question 65

Good Food,Inc. ,orders "Grade A" rice from Happy Farms to process and sell to Imperial Grocers.Happy Farms ships "Grade B" rice,which Good Food accepts.To recover damages for the nonconformity,Good Food must give notice of the breach within a reasonable time to

A)Happy Farms only.
B)Imperial only.
C)Happy Farms,Imperial,and the appropriate government agency.
D)the appropriate government agency only.

Question 66

Drew contracts for a sale of tools to Engineering Company (EC).If the tools fail to conform to the contract,EC

A)may accept or reject the shipment in part or in whole.
B)must accept the shipment.
C)must reject the shipment.
D)must renegotiate the contract.

Question 67

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

A)SUV filed a suit against Top Stop.
B)SUV learned of the breach.
C)the parties contracted.
D)Top Stop was required to tender the brakes.

Question 68

Pisa Pizza Company contracts to sell 1,000 cases of frozen pizzas to Quality Grocers,Inc. ,but refuses to deliver.Due to a spice shortage,Quality cannot obtain pizza elsewhere.Quality's right to recover the goods from Pisa is the right of

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

Question 69

Jivin' Java Company orders coffee beans from Koala Beans Corporation.Jivin' ac?cepts the beans before discovering that they are nonconforming.To re?voke acceptance,Jivin' must notify Koala

A)any time.
B)only after the beans undergo any substantial change not caused by their defects.
C)only before the beans undergo any substantial change not caused by their defects.
D)only while the beans undergo any substantial change not caused by their defects.

Question 70

Theatrical Supplies Company contracts to sell to United Costumes & Uniforms,Inc. ,seven hundred plastic masks at $1 each to be delivered by October 1.Theatrical knows that United will use the masks to make Halloween costumes.United usually makes $7,000 profit from the cos?tumes' sale.Theatrical fails to deliver on October 1.United attempts to buy substitute masks,but must pay $1.20 for each and take delivery on October 15,cutting United's sales in half.United sues Theatrical.What is the measure of recovery?

Question 71

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

A)the cost to manufacture the furniture.
B)the cost to obtain the rest of the wood elsewhere.
C)the profit that Superior would have made on the furniture.
D)the sale price of the furniture.

Question 72

City Accounting Service pays half of the price for a shipment of computers that remain with the seller,Digital Computers,Inc.Within ten days,Digital becomes insolvent.City can recover the goods if

A)City can describe the computers.
B)City cannot obtain cover.
C)City expected to obtain the computers within those ten days.
D)the computers are identified to the contract.