Question 1

Signal Sets Company contracts to deliver one hundred 52-inch plasma high-definition television sets to a new retail customer,Tuner TV Store,on May 1,with payment to be made on delivery.Signal tenders delivery in its own truck.Tuner's manager notices that some of the cartons have scrape marks.Tuner's owner phones Signal's office and asks whether the sets might have been damaged as they were being loaded.Signal assures Tuner that the sets are in perfect condition.Tuner tenders Signal a check,which Signal refuses,claiming that the first delivery to new customers is always for cash.Tuner promises to pay the cash within two days.Signal leaves the sets with Tuner,which stores them in its warehouse pending its "Grand Opening Sale" on May 15.Two days later,Tuner's stocker opens some of the cartons and discovers that a number of the sets are damaged beyond ordinary repair.Signal claims Tuner has accepted the sets and is in breach by not paying on delivery.Will Signal succeed on these claims? Explain.

Accepted Answer

The answer of Signal Sets Company contracts to deliver one...

Question 2

Text Publishers,Inc.,contracts for a sale of textbooks to University Bookstores,Inc.Viable Shipping Corporation,the carrier,transports the books to Warehouse Storage Company.Text's right to stop delivery is lost when University's rights to the goods are acknowledged by
A)the appropriate government agency.
B)the students who opt to buy the books.
C)University Bookstores.
D)Warehouse Storage.

Accepted Answer

The answer of Text Publishers,Inc.,contracts for a sale of textbooks...

Question 3

Bayou Boats,Inc.,contracts for the sale of seven swamp boats to Eventide Fishing Tours.Bayou repudiates the contract.Eventide's recovery is measured at the time
A)Bayou advertised the goods.
B)Eventide ordered the goods.
C)Eventide learned of the breach.
D)Bayou knew that it would repudiate the contract.

Accepted Answer

Eventide's recovery is measured at the time they learn of Bayou's repudiation of the contract. This is because at this point, Eventide can begin to make efforts to mitigate their damages by finding substitute swamp boats or pursuing other remedies. The other options are not relevant to the calculation of Eventide's recovery.

Question 4

BBQ,Inc.,makes and sells grills to Grill Mart,a retailer,which sells one of the grills to Hope,a consumer.BBQ and Grill Mart include in their contracts a limitation on consequential damages for personal inju-ries arising from a breach of warranty.This is prima facie un-conscionable with respect to
A)all of these parties.
B)BBQ and Grill Mart,but not Hope.
C)Hope only.
D)none of these parties.

Accepted Answer

The limitation on consequential damages for personal injuries arising from a breach of warranty is prima facie unconscionable with respect to Hope only, as it would prevent Hope from seeking damages for personal injuries caused by a defective grill. Both BBQ and Grill Mart have the bargaining power to negotiate the terms of their contract, but Hope has no bargaining power as a consumer. Therefore, such a limitation would be considered unconscionable and could be deemed unenforceable with respect to Hope.

Question 5

Leatherbound Stores,Inc.,rejects a shipment of goods that does not conform to its contract with Cowhide Corporation,but is unable to obtain instructions from the seller.Leatherbound 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.

Accepted Answer

Leatherbound has the right to either resell, return or store the goods as per the Uniform Commercial Code (UCC) § 2-711. Since the seller has not given any instructions, Leatherbound can choose any of these options as deemed fit. Therefore, option D is the best choice.

Question 6

Garden Field Farms and Haute Gourmet Restaurant,Inc.,enter into a con-tract for a sale of lettuce before Haute Gourmet declares bankruptcy.Garden Field can stop delivery 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.

Accepted Answer

Garden Field can stop delivery of the goods in transit regardless of the quantity as the contract was entered into before Haute Gourmet declared bankruptcy. Under the Uniform Commercial Code (UCC), the seller has the right to stop delivery of goods that are still in transit if the buyer becomes insolvent or bankrupt.

Question 7

Natural Foods,Inc.,orders "Grade A" oil from Olive Grove Farms to process and sell to Pic 'N Pay Grocers.Olive Grove ships "Grade B" oil,which Natural Foods accepts.To recover damages for the nonconformity,Natural Foods must give notice of the breach within a reasonable time to
A)Olive Grove only.
B)Olive Grove,Pic 'N Pay,and the appropriate government agency.
C)Pic 'N Pay only.
D)the appropriate government agency only.

Accepted Answer

Natural Foods must give notice of the breach to Olive Grove only, as they are the party responsible for shipping the nonconforming goods. The appropriate government agency or Pic 'N Pay do not need to be notified in this situation.

Question 8

Noni and Myra enter into a contract for a sale of clarinets and other wind instruments.Noni does not deliver.Myra can normally recover as damages the difference between
A)any loss avoided and any profit gained.
B)the actual price and the hoped-for price.
C)the contract price and the market price.
D)the current prices in the parties' locations.

Accepted Answer

The normal measure of damages in a contract for the sale of goods is the difference between the contract price and the market price at the time and place of delivery. In this case, since Noni did not deliver the goods, the market price at the time and place of delivery will be the relevant measure of damages. Option A refers to the "benefit of the bargain" rule, which applies in some jurisdictions but is not the default rule in contract law. Option B is too vague and does not accurately reflect the legal standard for measuring damages in a contract for the sale of goods. Option D is also too vague and does not accurately reflect the legal standard for measuring damages in this context.

Question 9

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 inci-dental 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.

Accepted Answer

The answer of Hi-Tech Company contracts to sell fiber optic...

Question 10

Ramblin' 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,Ramblin' refuses to go through with the deal.Blacksmith can recover
A)$1,500.
B)$1,000.
C)$500.
D)$0.

Accepted Answer

Ramblin' breached the contract by refusing to go through with the deal. Blacksmith could sue Ramblin' for the difference between the contract price ($1 per shoe) and the market price ($0.50 per shoe) for 1,000 shoes, which would be $500. Therefore, the correct answer is C.

Question 11

Colby contracts in writing to sell his 2005 Dodge-brand pick-up truck to Efrem for $10,500.Colby agrees to deliver the truck on Friday,and Efrem promises to pay the $10,500 on the following Monday.On Thursday,Efrem tells Colby that he changed his mind and will not buy the truck.Over the weekend,Efrem changes his mind again and tenders $10,500 to Colby on Monday.Colby has not sold the truck to another party but refuses the tender and refuses to deliver.Efrem claims that Colby has breached their contract.Colby contends that Efrem's repudiation released him from his duty to perform under the contract.Who is correct,and why?

Accepted Answer

The answer of Colby contracts in writing to sell his...

Question 12

Summer Breeze,Inc.,contracts for the sale of fifty ceiling fans to Island Décor store.If Summer Breeze fails to deliver the goods,Island Décor must commence a suit for breach of contract within
A)four years.
B)not more than one year.
C)not less than four years.
D)thirty days.

Accepted Answer

Under the Uniform Commercial Code (UCC), which governs the sale of goods, the statute of limitations for commencing a suit for breach of contract is four years from the date the cause of action accrues.

Quiz 15: Performance and Breach of Sales and Lease Contracts

Text Publishers,Inc.,contracts for a sale of textbooks to University Bookstores,Inc.Viable Shipping Corporation,the carrier,transports the books to Warehouse Storage Company.Text's right to stop delivery is lost when University's rights to the goods are acknowledged by

Bayou Boats,Inc.,contracts for the sale of seven swamp boats to Eventide Fishing Tours.Bayou repudiates the contract.Eventide's recovery is measured at the time

BBQ,Inc.,makes and sells grills to Grill Mart,a retailer,which sells one of the grills to Hope,a consumer.BBQ and Grill Mart include in their contracts a limitation on consequential damages for personal inju-ries arising from a breach of warranty.This is prima facie un-conscionable with respect to

Leatherbound Stores,Inc.,rejects a shipment of goods that does not conform to its contract with Cowhide Corporation,but is unable to obtain instructions from the seller.Leatherbound may

Garden Field Farms and Haute Gourmet Restaurant,Inc.,enter into a con-tract for a sale of lettuce before Haute Gourmet declares bankruptcy.Garden Field can stop delivery of the goods in transit

Natural Foods,Inc.,orders "Grade A" oil from Olive Grove Farms to process and sell to Pic 'N Pay Grocers.Olive Grove ships "Grade B" oil,which Natural Foods accepts.To recover damages for the nonconformity,Natural Foods must give notice of the breach within a reasonable time to

Noni and Myra enter into a contract for a sale of clarinets and other wind instruments.Noni does not deliver.Myra can normally recover as damages the difference between

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 inci-dental damages if Internet

Ramblin' 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,Ramblin' refuses to go through with the deal.Blacksmith can recover

Summer Breeze,Inc.,contracts for the sale of fifty ceiling fans to Island Décor store.If Summer Breeze fails to deliver the goods,Island Décor must commence a suit for breach of contract within