Question 1

Everett is an accountant for a major accounting firm.One day at work,he is discussing his collection of rare coins with one of his co-workers.Everett tells his co-worker that he keeps his collection at home and that he has recently purchased several Chinese gold Panda coins at an exceptional price.The co-worker expresses an interest in buying two of the coins at a price of $250,and a contract is duly formed.If no place for delivery is expressed,where are the coins to be delivered?
A) At the office of the accounting firm where the parties to the contract work
B) At Everett's home
C) At the co-worker's home
D) In the parking lot of the accounting firm

Accepted Answer

Under the Uniform Commercial Code (UCC), when no specific place of delivery is mentioned in a sales contract, the goods are to be delivered at the seller's place of business. If the seller does not have a place of business, then delivery is to be made at the seller's residence. Since Everett is selling personal items (coins) and not in the capacity of his business, his home is considered the place for delivery.

Question 2

J & J Co.offers a "subscription" for baby toys to be delivered every two months from the birth of a child.Payment must be made within two weeks of delivery.The Markham family accepted the J & J plan when their son,Timmy,was born.When Timmy was four months old,one J & J toy arrived smashed to pieces.Markham:
A) can treat the whole contract as breached and refuse to pay for past installments as well as future installments.
B) can reject the installment and cancel the contract immediately.
C) can reject the installment and refuse to pay if J & J cannot cure it.
D) cannot reject the installment since it is part of a series.

Accepted Answer

According to the contract, the Markham family can reject the installment and refuse to pay if J & J cannot cure it. However, they cannot cancel the entire contract immediately or refuse to pay for past installments since this was just a one-time issue with one toy delivery. They also cannot treat the installment as part of a series and must address each delivery separately. Therefore, the best choice would be to reject the installment and give J & J an opportunity to fix the issue before refusing to pay.

Question 3

Which of the following is correct with respect to the Code's approach to impossibility of performance?
A) Ordinarily,a strike by employees of the seller will excuse performance by the seller.
B) Increased production costs alone will excuse performance by the seller.
C) Performance will be excused when it is commercially impractical as a result of one or more unforeseen supervening events that are more than mere hardship or increased cost of performance.
D) All of these are correct.

Accepted Answer

The Code's approach to impossibility of performance is that it will be excused when it is commercially impractical due to unforeseen supervening events that are more than mere hardship or increased cost of performance. This means that increased production costs alone or a strike by employees of the seller will not excuse performance by the seller unless it is commercially impractical due to unforeseen supervening events. Therefore, option A and B are incorrect, and the correct answer is option C.

Question 4

Sam agrees to sell Jaden one 18-cubic-foot,yellow refrigerator for $1200.It is to be delivered to Jaden's home on July 7.Under the perfect tender rule,which one of the following cases would be a rightful rejection of the goods?
A) Sam delivered an 18-cubic-foot,blue refrigerator on July 7,and Jaden calls Sam to complain.
B) Sam sent an 18-cubic-foot,yellow refrigerator with a dent in it on July 7.Jaden refuses delivery but never bothers to call Sam.
C) Sam sent his truck to Jaden's home with the 18-cubic-foot,yellow refrigerator on July 7,but Jaden was not home.
D) Sam sent an 18-cubic-foot,yellow refrigerator without ice cube trays on July 5 and notifies Jaden of the defect.

Accepted Answer

Under the perfect tender rule, the buyer can reject goods if they fail to conform to the contract in any way. In option A, the refrigerator delivered was blue instead of yellow, which is a non-conformity to the contract terms.

Question 5

The Elm Street Accounting Partnership has ordered two maroon office chairs for its waiting room from the Quality Office Supply Company.Quality sends two burgundy-red office chairs that the Elm Street partnership rejects.What,if any,rights does Quality have under the circumstances? Explain.

Accepted Answer

The answer of The Elm Street Accounting Partnership has ordered...

Question 6

Goods are to be sent F.O.B.Buffalo,NY to Raleigh,NC by UPS.Where does tender occur?
A) Where the goods are identified
B) Where the goods are shipped
C) Where the goods are delivered and picked up by the buyer
D) Where the goods are taken by the buyer

Accepted Answer

F.O.B. (Free on Board) Buffalo, NY means that the seller is responsible for getting the goods to the carrier (UPS in this case) and once they are loaded on the carrier, the buyer takes responsibility. Tender of delivery occurs when the goods are shipped, meaning when they are loaded onto the UPS truck in Buffalo, NY.

Question 7

Which of the following terms indicates a shipment contract?
A) F.A.S.seller's port
B) C.I.F.
C) C.& F.
D) All of these are shipment contracts.

Accepted Answer

All of these terms (F.A.S. seller's port, C.I.F., and C.& F.) indicate shipment contracts, which are used in international trade to define the responsibilities, costs, and risk transfer points between the buyer and seller.

Question 8

Drapery Makers has signed a contract to make and sell to Hyer curtains for 20 windows by March 31.Hyer,however,delays in giving Drapery Makers the dimensions it needs to know in order to do the work.In this case,Drapery Makers:
A) may proceed to do the work when it receives the information if it performs reasonably.
B) will get paid for their availability to perform even if they never make the curtains.
C) has no remedies under the Code.
D) can charge Hyer a per-day penalty for each day of the delay.

Accepted Answer

According to the Uniform Commercial Code, if a party fails to provide necessary specifications, the other party may proceed to do the work when it receives the information if it performs reasonably. Therefore, Drapery Makers may proceed to make the curtains as long as they do so reasonably once they receive the dimensions from Hyer.

Question 9

On June 1,Supertread Tire Company entered into a contract to provide 100 tires per month to ZYX Cycle Company at $30 per tire for the next two years.The October shipment consisted of 100 badly defective tires.ZYX Cycle Company:
A) can treat the whole contract as breached.
B) can reject the October shipment if it cannot be cured in a timely manner by Supertread.
C) cannot reject the October shipment since it is part of the installment series.
D) must sell the defective tires for whatever they can get for them and sue Supertread for the difference.

Accepted Answer

According to the installment contract, if there is a breach in one shipment, the buyer has the right to reject that specific shipment, but not the entire contract. In this case, ZYX Cycle Company can reject the October shipment if Supertread cannot cure the defect in a timely manner. However, they cannot treat the whole contract as breached based on this one shipment.

Question 10

Mary purchased a dining room table and chairs from Baymore Co.It was defective and Baymore has tried unsuccessfully for the past four weeks to repair the defects.Mary may revoke her acceptance as long as she:
A) notifies Baymore of the revocation.
B) does not use the table and chairs.
C) could not discover the defects easily.
D) inspected the goods herself.

Accepted Answer

Under the Uniform Commercial Code (UCC), a buyer may revoke acceptance of goods if the goods fail to conform to the contract and the non-conformity substantially impairs the value of the goods to the buyer. The buyer must notify the seller of the revocation. The other options are not requirements for revocation of acceptance under the UCC.

Question 11

Which of the following is correct with respect to the buyer's obligation of payment?
A) In the absence of agreement,payment is due at the time and place the buyer is to receive the goods.
B) Payment by check is sufficient unless the seller demands currency and allows the buyer a reasonable time in which to obtain it.
C) If the buyer so agrees,he must pay for the goods in advance of delivery.
D) All of these are correct.

Accepted Answer

All of the options provided are correct with respect to the buyer's obligation of payment. Payment is due at the time and place agreed upon, but if there is no agreement, it is due at the time and place the buyer is to receive the goods (option A). Payment by check is typically accepted but the seller has the right to demand currency and allow a reasonable time for the buyer to obtain it (option B). If the buyer agrees to pay for the goods in advance of delivery, they are obligated to do so (option C).

Question 12

Under the ____,a buyer may reject goods for even the slightest defect.
A) revocation of acceptance rule
B) perfect tender rule
C) rules for inspection
D) excuses for nonperformance

Accepted Answer

The perfect tender rule states that a buyer may reject goods for even the slightest defect. This means that the seller must provide goods that conform perfectly to the contract, or the buyer may reject them. The revocation of acceptance rule allows the buyer to revoke acceptance of goods if they later discover a defect, but this is different from the perfect tender rule. The rules for inspection and excuses for nonperformance are not directly relevant to the buyer's ability to reject goods for defects.

Question 13

Pedro ordered a custom-made suit from Rooks & Sons to be delivered by Friday at 5 p.m.When it is delivered to his office on Friday afternoon,he is in conference with a client.His secretary hangs the suit in the office closet.When Pedro tries on the suit Saturday evening,he discovers that the pants are cuffed.He had ordered cuffless trousers,so he called Rooks & Sons on Monday and informed them that he was returning the suit.What can he do?
A) He cannot revoke acceptance since the cuffs are not difficult to discover.
B) He can revoke acceptance because the cuffs substantially impair the value of the goods to him.
C) He can reject the goods since he had not yet accepted them prior to inspection.
D) He cannot reject the goods because the cuffs are curable.

Accepted Answer

The answer of Pedro ordered a custom-made suit from Rooks...

Question 14

If destruction or casualty to goods,total or partial,occurs after risk of loss has passed to the buyer,who is responsible for losses?
A) The seller
B) The buyer,who must pay the entire contract price of the goods
C) The buyer if the loss is partial;both parties share the loss if it is total
D) The carrier delivering the goods

Accepted Answer

The buyer is responsible for losses after the risk of loss has passed to them, which includes paying the entire contract price of the goods even if they are damaged or lost.

Question 15

In which of the following situations does the seller have the right to cure?
A) Where the time for performance under the contract has not yet expired
B) After the time for performance has expired if the seller didn't have any conforming items to tender
C) Where the buyer has revoked acceptance
D) All of these.

Accepted Answer

The seller has the right to cure if the time for performance under the contract has not yet expired. This allows the seller an opportunity to correct any defects or non-conformities in the goods before the contract performance period ends.

Question 16

Under the CISG:
A) the seller has no right to cure a defective delivery.
B) if the seller does not perform on time,the buyer may fix an additional,reasonable period of time for performance.
C) the seller has a limited right to cure a defective performance,but only before the date for delivery specified in the contract.
D) the seller may,even after the date for delivery,cure a defective performance if it can be done without unreasonable delay.The buyer cannot claim damages for delay as long as the cure was within a reasonable time.

Accepted Answer

The answer of Under the CISG:
A) the seller has no...

Question 17

When is a buyer deemed to have accepted goods that are delivered pursuant to a contract?
A) Through a failure to reject after he has had a reasonable opportunity to inspect them
B) Immediately upon delivery
C) Only by conduct that shows the buyer's willingness to become owner of the goods
D) Only after an express acceptance

Accepted Answer

Under the Uniform Commercial Code (UCC), a buyer is deemed to have accepted goods if they fail to reject them after having had a reasonable opportunity to inspect them. This is known as acceptance by conduct. Once the buyer has accepted the goods, they become the owner of them and cannot later reject them unless there is a valid reason for doing so. Therefore, option A is the best choice.

Question 18

Edna orders a set of china from Northwestern Catalog.Northwestern sends the dishes by UPS.The contract does not specify when payment is to be made.Edna must pay when:
A) she orders the goods from Northwestern.
B) she gets the goods from UPS.
C) Northwestern takes the goods to UPS.
D) she receives notification that the goods have been shipped..

Accepted Answer

Payment is typically due upon receipt of the goods or services. Therefore, Edna must pay when she gets the goods from UPS.

Question 19

Which of the following terms would indicate a destination contract?
A) F.O.B.city of buyer
B) F.O.B.city of seller
C) C.I.F.
D) F.A.S.seller's port

Accepted Answer

In a destination contract, the seller is responsible for delivering the goods to the buyer's location. "F.O.B. city of buyer" indicates that the seller's responsibility ends when the goods reach the buyer's city, making it a destination contract.

Question 20

Willingness by the buyer to become the owner of the goods tendered or delivered to him by the seller is:
A) rejection.
B) acceptance.
C) revocation.
D) tender.

Accepted Answer

Acceptance signifies the willingness of the buyer to become the owner of the goods tendered or delivered to him by the seller. Rejection is the opposite of acceptance, revocation refers to the withdrawal of an offer or proposal, and tender is the act of offering something for delivery or acceptance.

Quiz 22: Performance

Which of the following is correct with respect to the Code's approach to impossibility of performance?

Sam agrees to sell Jaden one 18-cubic-foot,yellow refrigerator for $1200.It is to be delivered to Jaden's home on July 7.Under the perfect tender rule,which one of the following cases would be a rightful rejection of the goods?

The Elm Street Accounting Partnership has ordered two maroon office chairs for its waiting room from the Quality Office Supply Company.Quality sends two burgundy-red office chairs that the Elm Street partnership rejects.What,if any,rights does Quality have under the circumstances? Explain.

Goods are to be sent F.O.B.Buffalo,NY to Raleigh,NC by UPS.Where does tender occur?

Which of the following terms indicates a shipment contract?

Drapery Makers has signed a contract to make and sell to Hyer curtains for 20 windows by March 31.Hyer,however,delays in giving Drapery Makers the dimensions it needs to know in order to do the work.In this case,Drapery Makers:

On June 1,Supertread Tire Company entered into a contract to provide 100 tires per month to ZYX Cycle Company at $30 per tire for the next two years.The October shipment consisted of 100 badly defective tires.ZYX Cycle Company:

Mary purchased a dining room table and chairs from Baymore Co.It was defective and Baymore has tried unsuccessfully for the past four weeks to repair the defects.Mary may revoke her acceptance as long as she:

Which of the following is correct with respect to the buyer's obligation of payment?

Under the ____,a buyer may reject goods for even the slightest defect.

If destruction or casualty to goods,total or partial,occurs after risk of loss has passed to the buyer,who is responsible for losses?

In which of the following situations does the seller have the right to cure?

Under the CISG:

When is a buyer deemed to have accepted goods that are delivered pursuant to a contract?

Edna orders a set of china from Northwestern Catalog.Northwestern sends the dishes by UPS.The contract does not specify when payment is to be made.Edna must pay when:

Which of the following terms would indicate a destination contract?

Willingness by the buyer to become the owner of the goods tendered or delivered to him by the seller is: