Question 1

When the nonconformity or default substantially impairs the value of the installment but not the value of the entire contract, the buyer can reject the installment, even if the seller gives adequate assurance of the installment's cure.

Accepted Answer

Under the Uniform Commercial Code (UCC), if the nonconformity or default of an installment substantially impairs the value of that installment but not the entire contract, the buyer may reject the particular installment. However, if the seller provides adequate assurance of cure, the buyer may not be able to reject the installment based on that nonconformity.

Question 2

The Code provides that where neither party is at fault and the agreed manner of delivering the goods becomes commercially impracticable, a substituted manner of performance, if commercially reasonable, must be tendered and accepted.

Accepted Answer

This statement is true according to the provisions of the Code. Section 2-614 states that if the agreed manner of delivering goods becomes impracticable due to no fault of either party, a commercially reasonable substituted manner of performance must be tendered and accepted.

Question 3

If no definite time for delivery is fixed by the terms of the contract, delivery:
A) will not take place.
B) must begin within 10 days of the contract.
C) must be immediate.
D) and acceptance must happen within a reasonable amount of time.

Accepted Answer

If no definite time for delivery is fixed by the terms of the contract, then delivery and acceptance must happen within a reasonable amount of time. This is because the parties are expected to act in good faith and not unnaturally delay the performance of the contract. However, what constitutes a reasonable time will depend on the circumstances of the contract and the nature of the goods being delivered.

Question 4

In a contract that provides that the sale is F.O.B. Chicago, the seller must at his own expense and risk transport the goods to Chicago and there tender delivery to the buyer.

Accepted Answer

F.O.B. stands for "Free On Board" and indicates that the seller is responsible for the goods until they are loaded onto the shipping vessel or carrier. In this case, F.O.B. Chicago means that the seller is responsible for transporting the goods to Chicago and ensuring that they are loaded onto the shipping vessel or carrier there. The seller must also tender delivery to the buyer at Chicago, which means they must make the goods available for the buyer to pick up or arrange for further transportation.

Question 5

Revocation following an acceptance of the goods gives the buyer fewer rights than he would have had if he had at first rejected the goods.

Accepted Answer

The answer of Revocation following an acceptance of the goods...

Question 6

Parker agrees to sell to Thompson 500 bushels of soybeans at $6 per bushel. Without the fault of Parker or Thompson, 200 bushels are destroyed. Thompson must take the remaining 300 bushels and pay Parker $1,800.

Accepted Answer

The answer of Parker agrees to sell to Thompson 500...

Question 7

A commercial unit may be a set of articles, such as an assortment of sizes.

Accepted Answer

A commercial unit can indeed be a set of articles, including varying sizes.

Question 8

Acceptance of any part of a commercial unit is acceptance of the entire unit.

Accepted Answer

Accepting any part of a commercial unit implies accepting the entire unit, as the parts are so interconnected that they cannot be dissociated without damaging the unit.

Question 9

In a "no arrival, no sale" contract, the seller is responsible to the buyer for the goods' failure to arrive.

Accepted Answer

The answer of In a "no arrival, no sale" contract,...

Question 10

Amanco is to deliver to D & R Wholesalers 50 dozen wire-rim glasses frames by October 15. On October 2, Amanco delivers 30 dozen wire-rim frames and 20 dozen plastic frames. If D & R rejects the frames:
A) Amanco has until October 15 to cure the defect if it notifies D & R of its intention to do so.
B) D & R need not notify Amanco of its rejection of the nonconforming goods in order for the rejection to be effective since Amanco should know the goods did not meet the contract specifications.
C) the contract is automatically voided since the goods were nonconforming.
D) Amanco has no opportunity to cure the defect since it exhibited bad faith in not sending goods specified in the original contract.

Accepted Answer

According to the UCC, Amanco has the right to attempt to cure the defect by delivering conforming goods before the deadline (October 15) as long as it notifies D & R of its intention to do so. Therefore, A is the best choice. B is incorrect because under the UCC, D & R must notify Amanco of the rejection for it to be effective. C is incorrect because the contract is only voided if the nonconforming goods cannot be cured. And D is incorrect because there is no evidence of bad faith on the part of Amanco.

Question 11

If the goods or the tender of delivery fail in any respect to conform to the contract, the buyer may:
A) reject the whole.
B) accept the whole.
C) accept any commercial unit(s) and reject the rest.
D) Any of these.

Accepted Answer

The buyer has various options in case of non-conformity of goods or delivery. They can reject the entire goods or accept them in entirety. Alternatively, they can accept some commercial units and reject the remaining ones. Hence, option D is the correct choice as it encompasses all these options.

Question 12

Knecht contracts to sell $20,000 of goods to Morales. Later, Morales hears from another supplier that Knecht is having financial trouble, and Morales is concerned that Knecht will not be able to fill his order. If Morales has reasonable grounds for insecurity about Knecht's contractual performance:
A) Morales has no recourse except to wait for the contractual delivery date and, if Knecht fails to deliver, Morales can then sue for breach of contract.
B) Morales may demand written assurance of performance from Knecht before the contract delivery date, and Knecht must provide adequate assurance within a reasonable time not exceeding 30 days.
C) Morales may demand assurance of performance from Knecht, and Knecht must provide adequate assurance within ten days or the contract is repudiated.
D) the statement by the other supplier creates an anticipatory repudiation which allows Morales to avoid the contract.

Accepted Answer

The Uniform Commercial Code provides that if a party has reasonable grounds for insecurity about the other party's contractual performance, they may demand adequate assurance of performance. The demand must be in writing and can specify a reasonable time not exceeding 30 days for the other party to provide adequate assurance. If the other party fails to provide adequate assurance within that time frame, the demanding party may treat the contract as repudiated. Therefore, Morales may demand written assurance of performance from Knecht before the contract delivery date, and Knecht must provide adequate assurance within a reasonable time not exceeding 30 days.

Question 13

The CISG follows the perfect tender rule, as does the Code.

Accepted Answer

The CISG allows for a more flexible approach to non-conforming goods, giving the seller the opportunity to cure defects in certain situations, unlike the perfect tender rule under the UCC which requires the goods to conform perfectly to the contract specifications.

Question 14

Watkins Manufacturing has furniture, some of which it has sold to Home Interiors, stored in Central Warehouse. It is to be delivered without being moved. In order to fulfill its obligations to tender delivery, Watkins may either tender to Home Interiors a document of title or obtain an acknowledgment by the warehouse of Home Interiors' right to possess the furniture.

Accepted Answer

This is in accordance with the rules of tender of delivery as per the Uniform Commercial Code (UCC) Section 2-503. Watkins Manufacturing can either tender a document of title, such as a warehouse receipt, or obtain an acknowledgment by the warehouse of Home Interiors' right to possess the furniture.

Question 15

Unless the contract specifies otherwise, goods may be tendered in installments.

Accepted Answer

The answer of Unless the contract specifies otherwise, goods may...

Question 16

Under the CISG, if prior to the date for performance of the sales contract it is clear that one of the parties will commit a fundamental breach, the other party may declare the contract avoided.

Accepted Answer

According to Article 25 of the CISG, if prior to the date for performance of the sales contract it is clear that one of the parties will commit a fundamental breach, the other party may declare the contract avoided.

Question 17

If an anticipatory repudiation substantially impairs the value of the contract, the aggrieved party may:
A) await performance for a reasonable time.
B) resort to any remedy for breach.
C) Both of these options.
D) None of these options.

Accepted Answer

If an anticipatory repudiation substantially impairs the value of the contract, the aggrieved party has the option to await performance for a reasonable time, but may also resort to any remedy for breach. Therefore, both options are available to the aggrieved party.

Question 18

If a lease contract does not sufficiently cover the particulars of performance, Article 2A provides many gap-filler provisions.

Accepted Answer

The answer of If a lease contract does not sufficiently...

Question 19

A buyer in Atlanta enters into a sales contract with a seller in Chicago. If the contract does not mention the place for delivery of the goods, the place of delivery will be:
A) at the seller's business or residence in Chicago.
B) as stated in all destination contracts.
C) at the buyer's business or residence in Atlanta.
D) irrelevant, since the contract is void.

Accepted Answer

Under the Uniform Commercial Code (UCC), if a contract for the sale of goods does not specify the place of delivery, the default location is the seller's place of business or, if the seller has no business location, the seller's residence.

Question 20

A buyer who sells rejected goods on behalf of the seller is entitled to reasonable expenses not to exceed five percent of the gross proceeds.

Accepted Answer

Under the Uniform Commercial Code (UCC), when a buyer rightfully rejects goods and sells them on behalf of the seller, the buyer is entitled to reimbursement for reasonable expenses incurred in the sale, but the UCC does not specify a five percent cap on these expenses. The actual amount can vary based on the circumstances and the reasonable costs incurred.

Quiz 22: Performance

When the nonconformity or default substantially impairs the value of the installment but not the value of the entire contract, the buyer can reject the installment, even if the seller gives adequate assurance of the installment's cure.

The Code provides that where neither party is at fault and the agreed manner of delivering the goods becomes commercially impracticable, a substituted manner of performance, if commercially reasonable, must be tendered and accepted.

If no definite time for delivery is fixed by the terms of the contract, delivery:

In a contract that provides that the sale is F.O.B. Chicago, the seller must at his own expense and risk transport the goods to Chicago and there tender delivery to the buyer.

Revocation following an acceptance of the goods gives the buyer fewer rights than he would have had if he had at first rejected the goods.

Parker agrees to sell to Thompson 500 bushels of soybeans at $6 per bushel. Without the fault of Parker or Thompson, 200 bushels are destroyed. Thompson must take the remaining 300 bushels and pay Parker $1,800.

A commercial unit may be a set of articles, such as an assortment of sizes.

Acceptance of any part of a commercial unit is acceptance of the entire unit.

In a "no arrival, no sale" contract, the seller is responsible to the buyer for the goods' failure to arrive.

Amanco is to deliver to D & R Wholesalers 50 dozen wire-rim glasses frames by October 15. On October 2, Amanco delivers 30 dozen wire-rim frames and 20 dozen plastic frames. If D & R rejects the frames:

If the goods or the tender of delivery fail in any respect to conform to the contract, the buyer may:

Knecht contracts to sell $20,000 of goods to Morales. Later, Morales hears from another supplier that Knecht is having financial trouble, and Morales is concerned that Knecht will not be able to fill his order. If Morales has reasonable grounds for insecurity about Knecht's contractual performance:

The CISG follows the perfect tender rule, as does the Code.

Unless the contract specifies otherwise, goods may be tendered in installments.

Under the CISG, if prior to the date for performance of the sales contract it is clear that one of the parties will commit a fundamental breach, the other party may declare the contract avoided.

If an anticipatory repudiation substantially impairs the value of the contract, the aggrieved party may:

If a lease contract does not sufficiently cover the particulars of performance, Article 2A provides many gap-filler provisions.

A buyer in Atlanta enters into a sales contract with a seller in Chicago. If the contract does not mention the place for delivery of the goods, the place of delivery will be:

A buyer who sells rejected goods on behalf of the seller is entitled to reasonable expenses not to exceed five percent of the gross proceeds.