Question 1

On a lessee's insolvency,the lessor can stop delivery of the goods.

Accepted Answer

According to the principles of leasing, if the lessee becomes insolvent, the lessor has the right to stop the delivery of the goods.

Question 2

If a seller repudiates a contract,the buyer's damages do not have to be adjusted to reflect any expenses that were saved as a result of the breach.

Accepted Answer

If a seller repudiates a contract, the buyer's damages may have to be adjusted to reflect any expenses that were saved as a result of the breach. This is known as the mitigation of damages principle, and it requires the injured party to take reasonable steps to minimize their losses in the wake of a breach.

Question 3

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

Accepted Answer

If a buyer repudiates a contract, the seller can re-cover damages. The seller can choose to sue for specific performance (forcing the buyer to complete the contract), or sue for damages resulting from the breach of contract.

Question 4

If goods identified to a contract are destroyed through no fault of either party,both parties are excused from performance.

Accepted Answer

This concept is known as the doctrine of impossibility or impracticability, which excuses both parties from their contractual duties when performance becomes impossible due to circumstances beyond their control, such as destruction of goods by fire, flood, or other natural disasters. This principle is recognized in the U.S. common law and the Uniform Commercial Code (UCC) Section 2-615.

Question 5

In general,a buyer's duty to pay for tendered goods becomes absolute be-fore the buyer has had an opportunity to inspect the goods.

Accepted Answer

The answer of In general,a buyer's duty to pay for...

Question 6

If a buyer breaches a contract while the seller is still in possession of the goods,the seller can resell the goods and hold the buyer liable for any loss.

Accepted Answer

This is known as the right to sell or the right of resale, and it pertains to the seller's ability to sell the goods to a third party and hold the original buyer liable for any losses. This is generally allowed if the original contract explicitly states that the seller has this right in the event of a breach.

Question 7

A buyer may reject a seller's goods under any circumstances.

Accepted Answer

A buyer cannot reject seller's goods under any circumstances. There are specific grounds for rejection of goods, such as goods not conforming to the contract, damaged or faulty goods, etc.

Question 8

Big Eggs,Inc.agrees to supply Omelet Express with five hundred eggs.Big Eggs cannot reasonably ask Omelet Express to pick up the eggs at A.m.

A)1:00 p.m.
B)2:00 p.m.
C)3:00 p.m.
D)4:30 p.m.

Accepted Answer

Since Big Eggs has agreed to supply Omelet Express with 500 eggs, it is their responsibility to deliver the eggs. Asking Omelet Express to pick up the eggs is not a reasonable request. Therefore, the best choice is 4:30 p.m. as it allows ample time for Big Eggs to prepare and deliver the eggs to Omelet Express.

Question 9

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

Accepted Answer

This is known as the doctrine of cover, which allows the buyer to purchase substitute goods and recover damages from the seller for any additional expenses incurred.

Question 10

If a buyer wrongfully refuses to accept goods that conform to a contract,the seller can recover damages.

Accepted Answer

This is the principle of the common law doctrine of anticipatory breach. If a seller can prove that the buyer wrongfully refused to accept goods that conform to a valid contract, the seller may recover damages for any losses that resulted from the buyer's breach.

Question 11

Office Suppliers,Inc.and Little Office Shop enter into a contract for a sale of office supplies.Office Suppliers is the seller.Under a shipment contract,the Office Suppliers does not have to
A)obtain and promptly deliver or tender to the buyer any documentsnecessary to enable the buyer to obtain the goods.
B)deliver the goods to a particular destination.
C)put the goods in the hands of the carrier.
D)promptly notify the buyer when the shipment has been made.

Accepted Answer

Under a shipment contract, the seller is not required to deliver the goods to a particular destination. Instead, the seller is only required to put the goods in the hands of the carrier for shipment to the buyer. Therefore, option B is the correct answer as the seller is not obligated to deliver the goods to a particular destination.

Question 12

If a seller fails to deliver the goods,the buyer's damages do not include all losses resulting from this course of events.

Accepted Answer

If a seller fails to deliver the goods, the buyer may indeed be entitled to recover all losses resulting from this breach of contract, including any additional costs incurred by the buyer to obtain substitute goods or cover for their losses.

Question 13

Sparkling Gem Corporation agrees to sell Jewel Outlets,Inc.(JOI),fifty new diamonds,but the contract does not specify a place of delivery.JOI is expected to pick up the goods.The place of delivery is
A)Sparkling's place of business.
B)JOI's place of business.
C)the Annual Gems and Jewels Convention in New York City.
D)the U.S.Postal Service office nearest to JOI's place of business.

Accepted Answer

In the absence of a specified place of delivery in a contract, the default rule under the Uniform Commercial Code (UCC) is that the place of delivery is the seller's place of business.

Question 14

Unless otherwise agreed,inspection of goods can take place at any reasonable place and time and in any reasonable manner.

Accepted Answer

This is stated in Article 30 of the United Nations Convention on Contracts for the International Sale of Goods (CISG).

Question 15

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.

Accepted Answer

If a buyer communicates an intent not to perform before the time for performance, the seller can consider the buyer in breach and pursue a remedy. This is because the buyer has effectively repudiated the contract, indicating that they will not fulfill their end of the bargain.

Question 16

Under the UCC,parties to a contract cannot limit or exclude consequential damages.

Accepted Answer

Parties to a contract under the UCC can limit or exclude consequential damages by including specific language in the contract that clearly indicates their intention to do so.

Question 17

Clear Day Company,which is based in Delaware,agrees to sell fifty windows,currently stored in Florida,to Far Vu,Inc.,which is based in Hawaii.Absent an agreement to the contrary,the place of deliv-ery is in
A)California.
B)Delaware.
C)Florida.
D)Hawaii.

Accepted Answer

In the absence of an agreement to the contrary, the place of delivery is typically the location where the goods are stored, which in this case is Florida.

Question 18

Elegant Carpets,Inc.,and Fantastic Floors Stores enter into a contract for a sale of carpeting.Under a shipment contract,the seller must
A)allow the buyer to reject the goods for any reason.
B)deliver the goods to a particular destination.
C)inspect the goods before shipping them.
D)place the goods into the hands of a carrier.

Accepted Answer

Under a shipment contract, the seller's obligation is to place the goods into the hands of a carrier who is responsible for the transportation and delivery of the goods to the buyer's designated destination. The buyer is responsible for any risks during transportation.

Question 19

Once the seller has tendered delivery,the buyer is obligated to accept the goods and pay for them.

Accepted Answer

Once the seller has fulfilled their obligation to deliver the goods according to the terms of the sale, the buyer is obligated to accept the goods and pay for them. This is known as the "tender of delivery" and is a crucial step in completing a sales transaction. If the buyer refuses to accept the goods, they may be in breach of contract and may be liable for any damages that result from that breach.

Question 20

If a seller asks a buyer to store nonconforming goods overnight,then the buyer is entitled to reimbursement for the costs involved.

Accepted Answer

According to the Uniform Commercial Code (UCC) § 2-607(3)(a), if a seller requests that the buyer hold onto nonconforming goods, the buyer may store the goods and recover any reasonable expenses incurred, including the cost of transporting, preserving, caring for, and insuring the goods.

Quiz 15: Performance and Breach of Sales and Lease Contracts