Question 1

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 2

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

The answer of Which of the following terms would indicate...

Question 3

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 4

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

In a shipment contract, the buyer is obligated to pay for the goods when they have been delivered or when they are available for pickup. In this case, Edna must pay when she receives the dishes from UPS.

Question 5

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, as long as it is not in accordance with the terms of the contract. This rule gives the buyer more power in the transaction, as they can demand exactly what they paid for. The revocation of acceptance rule and excuses for nonperformance both deal with situations where the buyer has already accepted the goods, so they do not apply here. The rules for inspection relate to procedures for determining the quality of the goods, but do not necessarily give the buyer the right to reject them.

Question 6

Mary allows the seller, Baymore Co., four weeks to repair the defects in her kitchen set. They have tried, but have not done a good job. She 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

Mary may revoke her acceptance as long as she notifies Baymore of the revocation. The other choices are not relevant to her right to revoke acceptance.

Question 7

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 UCC §2-612, if there is a non-conformity in an installment, the buyer can reject that installment and refuse to pay for it if the non-conformity substantially impairs the value of that installment and cannot be cured by repair or replacement. Therefore, Markham can reject the installment and refuse to pay if J & J cannot cure it. However, Markham cannot cancel the contract immediately or treat the whole contract as breached since it is a series contract, and J & J has the right to cure the non-conformity for future installments.

Question 8

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 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. A strike by employees of the seller may or may not excuse performance, depending on the circumstances. Increased production costs alone are generally not sufficient to excuse performance. Therefore, options A and B are incorrect. Option C accurately summarizes the Code's approach to impossibility of performance. Therefore, option C is the correct answer.

Question 9

Sam agrees to sell Bill one 18-cubic-foot, yellow refrigerator for $700. It is to be delivered to Bill'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 Bill calls Sam to complain.
B) Sam sent an 18-cubic-foot, yellow refrigerator with a dent in it on July 7. Bill refuses delivery but never bothers to call Sam.
C) Sam sent his truck to Bill's home with the 18-cubic-foot, yellow refrigerator on July 7, but Bill was not home.
D) Sam sent an 18-cubic-foot, yellow refrigerator without ice cube trays on July 5 and notifies Bill of the defect.

Accepted Answer

The answer of Sam agrees to sell Bill one 18-cubic-foot,...

Question 10

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 is the willingness of the buyer to become the owner of goods tendered or delivered by the seller.

Question 11

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 12

Speedy Stop sells necessities to neighborhood shoppers until 1
a.m. every day. Dairyland delivered its order of milk products as usual around 6
a.m. while Mary, the shopkeeper, was busy with the early coffee and donut crowd. The Dairyland driver left 12 crates in the refrigerator compartment and went on to the rest of his route. At 7:30
a.m., Mary went into the freezer to shelve the milk products and discovered that all 12 crates contained buttermilk rather than the usual mix of containers of whole milk, 2%, skim milk, and cream variety she had ordered. What is her obligation with regard to the goods?

Accepted Answer

The answer of Speedy Stop sells necessities to neighborhood shoppers...

Question 13

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

According to the Uniform Commercial Code (UCC), a buyer is deemed to have accepted goods when they fail to reject them after they have had a reasonable opportunity to inspect them. This is known as acceptance by conduct. Acceptance can also occur if the buyer does something that shows they are willing to become the owner of the goods, but this is not the only way acceptance can happen. Acceptance does not require an express acceptance, so option D is incorrect. Option B is also incorrect as acceptance does not occur immediately upon delivery.

Question 14

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 statements are 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. This is true because the place and time of payment may be specified in the contract, but if not, payment is due at the time and place the goods are to be received.

B) Payment by check is sufficient unless the seller demands currency and allows the buyer a reasonable time in which to obtain it. This is also true because unless the contract specifies the form of payment, a check is generally accepted unless the seller requires cash and provides the buyer with a reasonable amount of time to obtain it.

C) If the buyer so agrees, he must pay for the goods in advance of delivery. This is true because if the buyer agrees to pay in advance, then they are obligated to fulfill that agreement.

Question 15

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

Under the perfect tender rule, the buyer has the right to reject any delivery that does not conform to the contract. However, under the installment contract rule, the buyer cannot reject an installment of goods unless the nonconformity substantially impairs the value of that installment and cannot be cured. In this case, the October shipment was an installment in a series of monthly shipments. If the defective tires substantially impair the value of the installment, ZYX Cycle Company can reject it. However, if Supertread can cure the nonconformity in a timely manner, ZYX Cycle Company cannot reject the installment.

Question 16

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

Since Everett stated that he keeps his collection at home and there was no discussion of an alternative delivery location, it can be assumed that the coins are to be delivered to Everett's home.

Question 17

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 loading the goods onto the carrier at Buffalo. Tender of delivery occurs at the point where the goods are shipped from Buffalo, NY.

Question 18

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 19

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

Under the Uniform Commercial Code, if a buyer delays in giving necessary information to the seller, the seller may proceed with the work if it performs reasonably. Drapery Makers can proceed to do the work when it receives the dimensions from Hyer, as long as it does so in a reasonable manner. They do not have a remedy for a per-day penalty or payment for availability, as these are not provided for under the Code in this situation.

Question 20

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.

Quiz 22: Performance

Under the CISG:

Which of the following terms would indicate a destination contract?

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

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:

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

Mary allows the seller, Baymore Co., four weeks to repair the defects in her kitchen set. They have tried, but have not done a good job. She may revoke her acceptance as long as she:

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

Sam agrees to sell Bill one 18-cubic-foot, yellow refrigerator for $700. It is to be delivered to Bill's home on July 7. Under the perfect tender rule, which one of the following cases would be a rightful rejection of the goods?

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

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

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

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:

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? A) F.A.S. seller's port B) C.I.F. C) C.& F. D) All of these are shipment contracts.

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:

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