Question 1

Which of the following may occur if a solvent buyer has breached a contract by not paying for goods that are in transit?

Accepted Answer

A)UCC Sections 2-7051)and 2A-5261)allow a seller or lessor to stop delivery of goods that are in transit.If the buyer/lessee is solvent,however,the carrier or bailee can stop delivery only if the quantity shipped is a large shipment e.g. ,a carload or truckload).

Question 2

A lessee in possession of a leased piece of equipment fails to make payments on the equipment as required.What remedy does UCC 2A-5252)provide to the lessor?

Accepted Answer

A)UCC 2A-5252)allows a lessor to reclaim goods when the lessee fails to make
payments according to the lease terms.
B)UCC 2A-5252)allows a lessor to reclaim goods when the lessee fails to make payments according to the lease terms.
C)UCC 2A-5252)allows a lessor to reclaim goods when the lessee fails to make payments according to the lease terms.
D)UCC 2A-5252)allows a lessor to reclaim goods when the lessee fails to make payments according to the lease terms.
E)UCC 2A-5252)allows a lessor to reclaim goods when the lessee fails to make payments according to the lease terms.

Question 3

Which of the following includes lost profits so long as those damages are not too speculative?

Accepted Answer

A)Consequential damages include damages for lost profits as long as these
damages are not too speculative.
B)Consequential damages include damages for lost profits as long as these damages are not too speculative.
C)Consequential damages include damages for lost profits as long as these damages are not too speculative.
D)Consequential damages include damages for lost profits as long as these damages are not too speculative.
E)Consequential damages include damages for lost profits as long as these damages are not too speculative.

Question 4

Under UCC 2-7022),in which of the following circumstances may a seller reclaim goods when a buyer is in possession of goods and is in breach?

Accepted Answer

A)UCC 2-7022)allows a seller to reclaim goods when it discovers the buyer is
insolvent.
B)UCC 2-7022)allows a seller to reclaim goods when it discovers the buyer is insolvent.
C)UCC 2-7022)allows a seller to reclaim goods when it discovers the buyer is insolvent.
D)UCC 2-7022)allows a seller to reclaim goods when it discovers the buyer is insolvent.
E)UCC 2-7022)allows a seller to reclaim goods when it discovers the buyer is insolvent.

Question 5

Assuming proper proof,which of the following represents damages a buyer or lessee may recover in the event of a breach?

Accepted Answer

A)Buyers and lessees are entitled to incidental and consequential damages.
B)Buyers and lessees are entitled to incidental and consequential damages.
C)Buyers and lessees are entitled to incidental and consequential damages.
D)Buyers and lessees are entitled to incidental and consequential damages.
E)Buyers and lessees are entitled to incidental and consequential damages.

Question 6

Abel is a seller of rare sports cards.Yolanda asks Abel to find her a Babe Ruth rookie baseball card and agrees to pay him a $1,000 finders fee above the price of the card.Abel finds a card that Josef has for sale and enters into a contract with Josef to buy the card.Josef is supposed to send it by Tuesday because Yolanda is leaving the country on Thursday.Josef never sends the card,and Yolanda tells Abel to forget it because she is leaving the country.If Abel sues Josef for $1,000 in damages,is he likely to win?

Accepted Answer

A)Consequential damages include damages for lost profits as long as the damages
are not too speculative.
B)Consequential damages include damages for lost profits as long as the damages are not too speculative.
C)Consequential damages include damages for lost profits as long as the damages are not too speculative.
D)Consequential damages include damages for lost profits as long as the damages are not too speculative.
E)Consequential damages include damages for lost profits as long as the damages are not too speculative.

Question 7

Under the UCC buyers and lessees may recover goods identified in the contract if the seller or lessor becomes insolvent within ________ after receiving the first payment due under the agreement.

Accepted Answer

A)UCC sections 2-502 and 2a-522 allow buyers and lessees to recover the goods
identified in the contract if the seller or lessor becomes insolvent within 10 days after receiving the first payment due under the agreement.
B)UCC sections 2-502 and 2a-522 allow buyers and lessees to recover the goods identified in the contract if the seller or lessor becomes insolvent within 10 days after receiving the first payment due under the agreement.
C)UCC sections 2-502 and 2a-522 allow buyers and lessees to recover the goods identified in the contract if the seller or lessor becomes insolvent within 10 days after receiving the first payment due under the agreement.
D)UCC sections 2-502 and 2a-522 allow buyers and lessees to recover the goods identified in the contract if the seller or lessor becomes insolvent within 10 days after receiving the first payment due under the agreement.
E)UCC sections 2-502 and 2a-522 allow buyers and lessees to recover the goods identified in the contract if the seller or lessor becomes insolvent within 10 days after receiving the first payment due under the agreement.

Question 8

What is the preferred remedy for non-breaching buyers or lessees under the UCC?

Accepted Answer

A)Cover is the preferred remedy for nonbreaching buyers or lessees under the UCC
because it provides an easy,quantifiable means to determine damages.
B)Cover is the preferred remedy for nonbreaching buyers or lessees under the UCC because it provides an easy,quantifiable means to determine damages.
C)Cover is the preferred remedy for nonbreaching buyers or lessees under the UCC because it provides an easy,quantifiable means to determine damages.
D)Cover is the preferred remedy for nonbreaching buyers or lessees under the UCC because it provides an easy,quantifiable means to determine damages.
E)Cover is the preferred remedy for nonbreaching buyers or lessees under the UCC because it provides an easy,quantifiable means to determine damages.

Question 9

Fred's Fireplaces enters into a contract with Miguel's Patio Supply in which Miguel's agrees to purchase 20 fireplaces.Fred does not deliver the fireplaces,so Miguel purchases fireplace from Joe's Chimney's instead.Joe's charges significantly above market rate,but Miguel pays anyway because Miguel intends to sue Fred for the difference.Did Miguel act appropriately?

Accepted Answer

A)In obtaining cover,the buyer must demonstrate good faith in obtaining the
substitute goods and pay a reasonable amount for the substitute goods.Miguel did not demonstrate good faith or pay a reasonable amount so he did not act appropriately.
B)In obtaining cover,the buyer must demonstrate good faith in obtaining the substitute goods and pay a reasonable amount for the substitute goods.Miguel did not demonstrate good faith or pay a reasonable amount so he did not act appropriately.

Question 10

Fred's Fireplaces enters into a contract with Miguel's Patio Supply in which Miguel's agrees to purchase 20 fireplaces.The fireplaces are delivered,but a day after delivery,Fred discovers Miguel is insolvent.Fred reclaims the fireplaces.Did Fred's Fireplaces act appropriately?

Accepted Answer

A)UCC 2-7022)allows a seller to reclaim goods when it discovers a buyer is
insolvent.
B)UCC 2-7022)allows a seller to reclaim goods when it discovers a buyer is insolvent.
C)UCC 2-7022)allows a seller to reclaim goods when it discovers a buyer is insolvent.
D)UCC 2-7022)allows a seller to reclaim goods when it discovers a buyer is insolvent.
E)UCC 2-7022)allows a seller to reclaim goods when it discovers a buyer is insolvent.

Question 11

When a lessee in possession of the goods is in breach,when may a lessor reclaim goods according to UCC 2A-5252)?

Accepted Answer

A)UCC 2A-5252)allows a lessor to reclaim goods when the lessee fails to make
payments according to the lease terms.
B)UCC 2A-5252)allows a lessor to reclaim goods when the lessee fails to make payments according to the lease terms.
C)UCC 2A-5252)allows a lessor to reclaim goods when the lessee fails to make payments according to the lease terms.
D)UCC 2A-5252)allows a lessor to reclaim goods when the lessee fails to make payments according to the lease terms.
E)UCC 2A-5252)allows a lessor to reclaim goods when the lessee fails to make payments according to the lease terms.

Question 12

Assuming a buyer that is insolvent has breached a contract by not paying for goods that are in transit,which of the following may occur?

Accepted Answer

A)UCC Sections 2-7051)and 2A-5261)allow a seller or lessor to stop delivery of goods that are in transit.If the buyer/lessee is insolvent,the carrier/bailee can stop delivery regardless of the quantity shipped.
B)UCC Sections 2-7051)and 2A-5261)allow a seller or lessor to stop delivery of goods that are in transit.If the buyer/lessee is insolvent,the carrier/bailee can stop delivery regardless of the quantity shipped.
C)UCC Sections 2-7051)and 2A-5261)allow a seller or lessor to stop delivery of goods that are in transit.If the buyer/lessee is insolvent,the carrier/bailee can stop delivery regardless of the quantity shipped.
D)UCC Sections 2-7051)and 2A-5261)allow a seller or lessor to stop delivery of goods that are in transit.If the buyer/lessee is insolvent,the carrier/bailee can stop delivery regardless of the quantity shipped.
E)UCC Sections 2-7051)and 2A-5261)allow a seller or lessor to stop delivery of goods that are in transit.If the buyer/lessee is insolvent,the carrier/bailee can stop delivery regardless of the quantity shipped.

Question 13

Which of the following usually requires that the seller or lessor deliver the particular goods identified in the contract?

Accepted Answer

A)Specific performance usually requires that the seller or lessor deliver the
particular goods identified in the contract.
B)Specific performance usually requires that the seller or lessor deliver the particular goods identified in the contract.
C)Specific performance usually requires that the seller or lessor deliver the particular goods identified in the contract.
D)Specific performance usually requires that the seller or lessor deliver the particular goods identified in the contract.
E)Specific performance usually requires that the seller or lessor deliver the particular goods identified in the contract.

Question 14

Which term refers to the right of a buyer and lessee to substitute goods for those due under a sales or lease agreement?

Accepted Answer

A)Under UCC Sections 2-712 and 2A-518,buyers and lessees are allowed to cover,or substitute,goods for those due under the sales or lease agreement.
B)Under UCC Sections 2-712 and 2A-518,buyers and lessees are allowed to cover,or substitute,goods for those due under the sales or lease agreement.
C)Under UCC Sections 2-712 and 2A-518,buyers and lessees are allowed to cover,or substitute,goods for those due under the sales or lease agreement.
D)Under UCC Sections 2-712 and 2A-518,buyers and lessees are allowed to cover,or substitute,goods for those due under the sales or lease agreement.
E)Under UCC Sections 2-712 and 2A-518,buyers and lessees are allowed to cover,or substitute,goods for those due under the sales or lease agreement.

Question 15

Fred's Fireplaces enters into a contract with Miguel's Patio Supply in which Miguel's agrees to purchase 20 fireplaces.Miguel fails to pay and Fred's Fireplaces,upon discovering that Miguel is insolvent,stops delivery as the fireplaces are on the way to Miguel.Did Fred's Fireplaces act appropriately?

Accepted Answer

A)UCC Section 2-7051)and 2A-5261)allow a seller to stop delivery of goods
that are in transit if the buyer is insolvent.
B)UCC Section 2-7051)and 2A-5261)allow a seller to stop delivery of goods that are in transit if the buyer is insolvent.
C)UCC Section 2-7051)and 2A-5261)allow a seller to stop delivery of goods that are in transit if the buyer is insolvent.
D)UCC Section 2-7051)and 2A-5261)allow a seller to stop delivery of goods that are in transit if the buyer is insolvent.
E)UCC Section 2-7051)and 2A-5261)allow a seller to stop delivery of goods that are in transit if the buyer is insolvent.

Question 16

Which of the following statements is true regarding revocation of accepted nonconforming goods?

Accepted Answer

A)UCC Sections 2-608 and 2A-517 sometimes allow the buyer or lessee to revoke acceptance of nonconforming goods.For instance,in Case 24-1,Hodess rejected acceptance of the nonconforming coils U.S.A.provided.Hodess was allowed to reject acceptance because it had made a reasonable assumption that the nonconformity would be cured but then the nonconformity was not cured within a reasonable amount of time.
B)UCC Sections 2-608 and 2A-517 sometimes allow the buyer or lessee to revoke acceptance of nonconforming goods.For instance,in Case 24-1,Hodess rejected acceptance of the nonconforming coils U.S.A.provided.Hodess was allowed to reject acceptance because it had made a reasonable assumption that the nonconformity would be cured but then the nonconformity was not cured within a reasonable amount of time.
C)UCC Sections 2-608 and 2A-517 sometimes allow the buyer or lessee to revoke acceptance of nonconforming goods.For instance,in Case 24-1,Hodess rejected acceptance of the nonconforming coils U.S.A.provided.Hodess was allowed to reject acceptance because it had made a reasonable assumption that the nonconformity would be cured but then the nonconformity was not cured within a reasonable amount of time.
D)UCC Sections 2-608 and 2A-517 sometimes allow the buyer or lessee to revoke acceptance of nonconforming goods.For instance,in Case 24-1,Hodess rejected acceptance of the nonconforming coils U.S.A.provided.Hodess was allowed to reject acceptance because it had made a reasonable assumption that the nonconformity would be cured but then the nonconformity was not cured within a reasonable amount of time.
E)UCC Sections 2-608 and 2A-517 sometimes allow the buyer or lessee to revoke acceptance of nonconforming goods.For instance,in Case 24-1,Hodess rejected acceptance of the nonconforming coils U.S.A.provided.Hodess was allowed to reject acceptance because it had made a reasonable assumption that the nonconformity would be cured but then the nonconformity was not cured within a reasonable amount of time.

Question 17

When does the UCC allow buyers and lessees to seek the remedy of specific performance?

Accepted Answer

A)UCC Sections 2-7161)and 2A-5211)allow buyers and lessees to seek the remedy of specific performance when either 1)the goods are unique or 2)a remedy at law is inadequate.
B)UCC Sections 2-7161)and 2A-5211)allow buyers and lessees to seek the remedy of specific performance when either 1)the goods are unique or 2)a remedy at law is inadequate.

Question 18

What may a buyer/lessee do if the seller/lessor delivers nonconforming goods?

Accepted Answer

A)UCC Sections 2-601 and 2A-519 allow the buyer or lessee to reject the goods.
The buyer or lessee may then obtain cover or cancel the contract.
B)UCC Sections 2-601 and 2A-519 allow the buyer or lessee to reject the goods.The buyer or lessee may then obtain cover or cancel the contract.
C)UCC Sections 2-601 and 2A-519 allow the buyer or lessee to reject the goods.The buyer or lessee may then obtain cover or cancel the contract.
D)UCC Sections 2-601 and 2A-519 allow the buyer or lessee to reject the goods.The buyer or lessee may then obtain cover or cancel the contract.
E)UCC Sections 2-601 and 2A-519 allow the buyer or lessee to reject the goods.The buyer or lessee may then obtain cover or cancel the contract.

Question 19

Which of the following is NOT something the buyer must do in obtaining cover?

Accepted Answer

A)In obtaining cover,the buyer must 1)demonstrate good faith in obtaining the
substitute goods 2)pay a reasonable amount for the substitute goods 3)act without unreasonable delay in purchasing the substitute goods and 4)purchase goods that are reasonable substitutes.
B)In obtaining cover,the buyer must 1)demonstrate good faith in obtaining the substitute goods 2)pay a reasonable amount for the substitute goods 3)act without unreasonable delay in purchasing the substitute goods and 4)purchase goods that are reasonable substitutes.
C)In obtaining cover,the buyer must 1)demonstrate good faith in obtaining the substitute goods 2)pay a reasonable amount for the substitute goods 3)act without unreasonable delay in purchasing the substitute goods and 4)purchase goods that are reasonable substitutes.
D)In obtaining cover,the buyer must 1)demonstrate good faith in obtaining the substitute goods 2)pay a reasonable amount for the substitute goods 3)act without unreasonable delay in purchasing the substitute goods and 4)purchase goods that are reasonable substitutes.
E)In obtaining cover,the buyer must 1)demonstrate good faith in obtaining the substitute goods 2)pay a reasonable amount for the substitute goods 3)act without unreasonable delay in purchasing the substitute goods and 4)purchase goods that are reasonable substitutes.

Question 20

Fred's Fireplaces enters into a contract with Miguel's Patio Supply in which Miguel's agrees to purchase 20 fireplaces.This is considered a small order.Miguel,who is still running a business and who is still solvent,fails to pay for the fireplaces.Fred's Fireplaces stops delivery as the fireplaces are on the way to Miguel.Did Fred's Fireplaces act appropriately?

Accepted Answer

A)UCC Section 2-7051)and 2A-5261)allow a seller to stop delivery of goods that are in transit if the buyer is in breach.If the buyer is solvent,the carrier can stop delivery only if the quantity shipped is a large shipment,such as a carload or truckload.
B)UCC Section 2-7051)and 2A-5261)allow a seller to stop delivery of goods that are in transit if the buyer is in breach.If the buyer is solvent,the carrier can stop delivery only if the quantity shipped is a large shipment,such as a carload or truckload.
C)UCC Section 2-7051)and 2A-5261)allow a seller to stop delivery of goods that are in transit if the buyer is in breach.If the buyer is solvent,the carrier can stop delivery only if the quantity shipped is a large shipment,such as a carload or truckload.
D)UCC Section 2-7051)and 2A-5261)allow a seller to stop delivery of goods that are in transit if the buyer is in breach.If the buyer is solvent,the carrier can stop delivery only if the quantity shipped is a large shipment,such as a carload or truckload.
E)UCC Section 2-7051)and 2A-5261)allow a seller to stop delivery of goods that are in transit if the buyer is in breach.If the buyer is solvent,the carrier can stop delivery only if the quantity shipped is a large shipment,such as a carload or truckload.

Quiz 24: Remedies for Breach of Sales and Lease Contracts