Question 1

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), if a seller asks a buyer to store nonconforming goods overnight, the buyer has the right to reimbursement for the costs involved. This is because the seller is responsible for the goods until they conform to the contract specifications.

Question 2

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 delivery is in
A) California.
B) Delaware.
C) Florida.
D) Hawaii.

Accepted Answer

The place of delivery is typically where the goods are currently stored or located at the time of the sale, which in this case is Florida.

Question 3

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

Accepted Answer

This is known as the "cover doctrine" which allows a buyer who has to purchase substitute goods to recover the difference between the cost of the substitute goods and the contract price from the seller who did not deliver the goods.

Question 4

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 of tendering delivery, it is the buyer's responsibility to accept the goods and make payment.

Question 5

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

Accepted Answer

Under the UCC, parties to a contract can limit or exclude consequential damages as long as the limitation or exclusion is not unconscionable.

Question 6

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

Accepted Answer

A buyer cannot reject a seller's goods under any circumstances. There are specific circumstances under which a buyer can reject goods, such as if they are defective or not as described. However, the buyer must provide notice to the seller and give them an opportunity to remedy the situation before rejecting the goods.

Question 7

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 documents necessary 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 responsible for delivering the goods to a particular destination. Instead, the seller fulfills their obligation by putting the goods in the hands of the carrier. It is then the responsibility of the buyer to arrange for the transportation and delivery of the goods to the desired destination. Therefore, options A, C, and D are obligations that the seller must fulfill under a shipment contract, while option B is not.

Question 8

If a buyer repudiates a contract, the seller cannot recover damages.

Accepted Answer

If a buyer repudiates a contract, the seller can sue for damages if the repudiation constitutes a breach of contract. The seller may be entitled to recover any costs incurred as a result of the buyer's breach, as well as any lost profits. However, the amount of damages that the seller may recover will depend on the terms of the contract and the applicable law.

Question 9

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

Accepted Answer

This is the doctrine of impossibility of performance, also known as frustration of purpose, which excuses both parties from performance if performance becomes impossible due to uncontrollable circumstances such as destruction of the goods.

Question 10

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 resell or a seller's right to sell. If the buyer breaches the contract, the seller can resell the goods and hold the buyer responsible for any loss incurred during the resale. This is outlined in the Uniform Commercial Code (UCC), which governs commercial transactions in the United States.

Question 11

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 be adjusted to reflect any expenses saved as a result of the breach. This is because the purpose of damages is to put the non-breaching party in the same position they would have been in if the contract had been performed, and if the breach saved the buyer some expenses, that should be taken into account.

Question 12

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 the buyer communicates an intent not to perform before the time for performance, it is a breach of contract and the seller can pursue a remedy.

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

The answer of Sparkling Gem Corporation agrees to sell Jewel...

Question 14

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 responsibility is to place the goods into the hands of a carrier. The carrier then assumes responsibility for delivery of the goods to the buyer. The buyer does not have the right to reject the goods for any reason, and the seller is not required to deliver the goods to a particular destination or inspect the goods before shipping them.

Question 15

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) 1:00 P.M.
B) 2:00 P.M.
C) 3:00 P.M.
D) 4:30 A.M.

Accepted Answer

4:30 A.M. is an unreasonable time for a business to expect a customer to pick up goods, as it is outside normal business hours.

Question 16

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

Accepted Answer

According to the insolvency laws, if the lessee becomes insolvent, the lessor can stop the delivery of the goods.

Question 17

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 38 of the United Nations Convention on Contracts for the International Sale of Goods (CISG).

Question 18

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

Accepted Answer

If the buyer refuses to accept goods that conform to the contract, the seller can recover damages for any losses that they have suffered, including the cost of the goods, any expenses incurred in attempts to deliver the goods, and any lost profits. This is because the buyer has breached the contract by wrongfully refusing to accept the goods, and the seller has the right to be compensated for their losses.

Question 19

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

Accepted Answer

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

Question 20

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's damages may include all losses resulting from this course of events, such as lost profits or additional expenses incurred in obtaining substitute goods.

Quiz 16: Performance and Breach of Sales Lease Contracts