Question 1

Vehicle Leasing Agency (VLA) and Wander Trucking Company enter into a contract for a lease of eight cargo vans. VLA delivers eight vans, but they are not cargo-sized. Wander
A) cannot reject the entire shipment.
B) can reject the entire shipment.
C) must accept the entire shipment.
D) must reject the entire shipment.

Accepted Answer

Wander Trucking Company can reject the entire shipment because VLA has not fulfilled its obligation of delivering cargo-sized vans as per the contract. The entire shipment is not in conformity with the contract and therefore Wander has the right to reject it.

Question 2

On January 10, Winchester Pet Supplies orders fifty small dog collars from Quality Collars, Inc. to be delivered by January 15. On January 13, Quality Collars tenders fifty large dog collars. Winchester Pet Supplies rejects the shipment. Quality Collars has
A) no right to cure.
B) until January 15 to cure.
C) until the end of the business day on January 13 to cure.
D) unlimited time to cure.

Accepted Answer

The answer of On January 10, Winchester Pet Supplies orders...

Question 3

Julia orders twelve violins for her music shop from Notable Notes Instrument Manufacturers. The sale is made on credit. Julia orders the violins on May 1, Notable Notes ships the violins on May 2, and Julia receives the violins on May 4. Julia sells all the violins by June 15. Julia's credit period most likely began on
A) May 1.
B) May 2.
C) May 4.
D) June 15.

Accepted Answer

The credit period for the sale would typically begin on the day the goods are shipped, which in this case is May 2.

Question 4

Mitch and Nadine enter into a contract for a sale of seventy-six specially made motion detectors. When Nadine does not deliver within a reasonable time after the agreed delivery date, Mitch files a suit for breach. Nadine asserts the doctrine of commercial impracticability. This doctrine extends only to problems that are
A) foreseen.
B) preventable.
C) unforeseen.
D) ordinarily assumed by a seller or lessor.

Accepted Answer

The doctrine of commercial impracticability applies to unforeseen problems that make performance impracticable, such as unforeseeable weather or natural disasters.

Question 5

Screen Perfect, Inc., and TV Stores enter into a contract for a sale of high-definition television sets. Screen Perfect ships goods that do not exactly conform to the contract in some details. TV Stores
A) cannot reject the entire shipment.
B) can reject the entire shipment.
C) must accept the entire shipment.
D) must reject the entire shipment.

Accepted Answer

TV Stores can reject the entire shipment if the goods do not conform to the contract in essential details. This is because nonconformity in essential matters constitutes a breach of contract, entitling the buyer to reject the entire shipment. However, if the nonconformity is minor, TV Stores cannot reject the entire shipment and must accept the conforming portion of the goods.

Question 6

Genuine Seed Company and Hillside Farmers Cooperative enter into a contract for a sale of hybrid seeds. Under the perfect tender rule, Genuine Seed must ship or tender seeds to Hillside that
A) approximately conform to all of the details of the contract.
B) entirely conform to the contract except in one or two details.
C) exactly conform to the contract in every detail.
D) substantially conform to the contract in most details.

Accepted Answer

Under the perfect tender rule, the seller must deliver goods that exactly conform to the contract in every detail. Any deviation, no matter how minor, would constitute a breach of contract.

Question 7

Silas Paving Co. contracts to buy some construction machinery from Massive Earthmovers, Inc. Before either party performs, Massive sells its assets to Phoenix Equipment Corp. On learning of the sale, Silas is concerned about its contract with Massive. Silas should
A) demand assurances of performance from Massive.
B) consider the contract repudiated and sue Massive for breach.
C) buy the machinery from a different supplier and bill Massive for the price.
D) buy the machinery from a different supplier and bill Phoenix for the price.

Accepted Answer

Silas should demand assurances of performance from Massive. This is because the sale of a company's assets does not automatically relieve it of its contractual obligations. Silas should seek assurances that the contract with Massive will be honored by Phoenix Equipment Corp. or obtain a written agreement from Phoenix to perform Massive's obligations under the contract. This will protect Silas's interests and ensure that they receive the machinery they contracted for. Neither B, C nor D are appropriate options in this scenario.

Question 8

Pine Mills Corporation and Ur-Choice Lumberyards enter into a contract for a sale of plywood. Under a destination 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 tendering their delivery.
D) place the goods into the hands of a carrier.

Accepted Answer

Under a destination contract, the seller is responsible for delivering the goods to a particular destination specified by the buyer. The buyer only takes ownership of the goods once they have been delivered to the specified destination. Therefore, option B is the correct choice. Option A is incorrect as the buyer cannot reject the goods for any reason under a destination contract. Option C is not necessary in a destination contract as the seller is responsible for delivering the goods. Option D is not specific to a destination contract and can apply to any type of contract in which the seller is responsible for delivery.

Question 9

Craft Engineering, Inc., contracts for a sale of technical instruments to Detail Design Company. Before the date on which performance is due, Craft notifies Detail that it will not perform. This is
A) anticipatory repudiation.
B) perfect tender.
C) rejection of performance.
D) revocation of acceptance.

Accepted Answer

Anticipatory repudiation occurs when a party to a contract indicates before performance is due that it will not perform its obligations under the contract. In this case, the fact that Craft notified Detail that it will not perform before the date on which performance was due constitutes anticipatory repudiation.

Question 10

Sof' Chair Company contracts to deliver 100 chairs to Stuffy Furnishings Store on May 1 for which Stuffy agrees to pay. Sof' tells Stuffy on April 15 that delivery will be delayed until June 1. Stuffy may
A) await performance, sue Sof', or suspend its own performance.
B) only await Sof's performance for a commercially reasonable time.
C) only sue Sof' for breach of contract.
D) only suspend its own performance.

Accepted Answer

Stuffy Furnishings Store has several options: it may await performance, sue Sof' Chair Company for breach of contract, or suspend its own performance. Stuffy is not required to wait an indefinite amount of time for Sof' to perform, but may only suspend its own performance for a commercially reasonable amount of time before taking action.

Question 11

Sally's Sweet Fruits contracts with Fruits to You, Inc. for a delivery of two hundred pounds of strawberries to be delivered by Keep Kool Trucking, a trucking company with refrigerated trucks. On the day of delivery, the refrigeration units on Keep Kool's trucks are not working. Fruits to You
A) may ship the goods to Sally's using another trucking company with refrigerated trucks.
B) must refund Sally's money and cancel the contract.
C) must wait to ship the strawberries until Keep Kool has fixed its trucks.
D) must ship the goods through a different carrier and pay Sally incidental damages.

Accepted Answer

Fruits to You has a duty to perform under the contract with Sally's Sweet Fruits. If the original carrier, Keep Kool Trucking, cannot fulfill their part of the agreement due to a mechanical issue, Fruits to You must find another carrier with refrigerated trucks to deliver the strawberries to Sally's. This way, the contract is still satisfied and Sally's is not left without their order.

Question 12

Levi's Toy Store orders one hundred board games from Big Board Games Warehouse. When the games are delivered, they are all missing pieces. Levi's Toy Store rejects the shipment. Big Board Games wants to cure. Big Board Games must
A) promptly notify Levi's Toy Store of the intent to cure.
B) pay Levi's Toy store a cure fee.
C) send a truck to pick up the nonconforming goods before the end of the business day.
D) create a new contract with Levi's Toy Store.

Accepted Answer

The best option is for Big Board Games to promptly notify Levi's Toy Store of their intent to cure the nonconforming goods. This means that they will fix the issue by either replacing the missing pieces or sending a new shipment of board games. This is the most efficient and cost-effective solution for both parties. Option B and D do not apply in this situation, and Option C is not necessary as the nonconforming goods have already been rejected by Levi's Toy Store.

Question 13

Kim's Pony Rides orders ten saddles from Little Horse Saddles, Inc. The sales contract states that if the saddles are defective, Kim's will allow Little Horse Saddles to repair or replace them instead of rejecting the shipment. When the saddles arrive, they are defective. In this case, the perfect tender rule
A) does not apply.
B) applies to both parties.
C) applies only to Little Horse Saddles.
D) applies only to Kim's Pony Rides.

Accepted Answer

The perfect tender rule applies when goods are delivered, and it requires that the goods delivered comply with the terms of the contract in every respect. However, in this case, the sales contract specifies that if the saddles are defective, Kim's Pony Rides will allow Little Horse Saddles to repair or replace them. Therefore, the perfect tender rule does not apply, and the parties have agreed on a different remedy for defective goods.

Question 14

Food Packaging, Inc., agrees to sell 50,000 6-ounce yogurt containers to Golden Dairy Company. Food can obtain only 20,000 of the 6-ounce contain?ers, but also ships 30,000 more expensive 8-ounce containers for the same price. Under these circumstances, Golden
A) cannot reject delivery, and Food cannot later replace the containers.
B) cannot reject delivery, but Food can later replace the containers.
C) may reject delivery, and notice to Golden of Food's intent to cure will give Food a reasonable time to replace the containers.
D) may reject delivery, but Food cannot later replace the containers.

Accepted Answer

Golden Dairy Company may reject delivery, but Food Packaging, Inc. can cure the nonconformity by replacing the 6-ounce containers with conforming containers within a reasonable time. This is allowed under the UCC 2-508, which states that the seller has the right to cure a nonconforming delivery within the contract time for delivery or within a further reasonable amount of time after receiving notice of the nonconformity. However, the buyer has the right to reject the goods if the defect is not cured within a reasonable time.

Question 15

Business Rental Corporation (BRC) and Cartage Trucking Company enter into a contract for a lease of ten hydraulic lifts. Under the perfect tender rule, BRC must ship or tender goods to the lessee that
A) approximately conform to all of the details of the contract.
B) entirely conform to the contract except in one or two details.
C) exactly conform to the contract in every detail.
D) substantially conform to the contract in most details.

Accepted Answer

Under the perfect tender rule, the goods must exactly conform to the contract in every detail. Any deviation, no matter how minor, would give the buyer the right to reject the goods. Therefore, BRC must ensure that the hydraulic lifts meet all of the specifications in the contract before shipping or tendering them to Cartage Trucking Company.

Question 16

Beef Burgers, Inc. contracts to buy five hundred steers from Fattening Feedlots. Before Fattening Feedlots can deliver the steers, there is an outbreak of disease in the feedlot, and all the cattle are quarantined. In this case the perfect tender rule
A) applies to both parties.
B) does not apply.
C) applies only to Beef Burgers.
D) applies only to Fattening Feedlots.

Accepted Answer

The perfect tender rule does not apply in cases of commercial impracticability or force majeure events, such as the outbreak of disease in the feedlot that resulted in the quarantine of the cattle. Therefore, neither party can be held strictly liable for non-performance under the contract.

Question 17

Loomis Weaving Company contracts to sell sweaters to Style Mart stores. Before the sweat?ers are delivered, Style Mart indicates that it will not be able to pay. Loomis can resell the goods
A) either after finishing the job (and identifying the goods), or after stopping the job.
B) only after finishing the job and identifying the goods.
C) only if Loomis immediately stops the job.
D) under no circumstances.

Accepted Answer

Since Style Mart has indicated that it will not be able to pay before the delivery of goods, Loomis can choose to resell the goods either after finishing the job and identifying the goods, or after stopping the job. This is in accordance with the doctrine of mitigation of damages, which requires Loomis to take reasonable steps to mitigate its losses by attempting to resell the goods.

Question 18

Double D Ranch and Esau enter into a contract on August 1 for the sale of 200 cattle. Esau cancels the con?tract ten days later. Double D is unable to sell the cattle to another buyer. Double D is enti?tled to
A) force Esau to accept the cattle and recover the contract price.
B) keep the cattle and recover the contract price from Esau.
C) keep the cattle only.
D) recover the contract price from Esau but must destroy the cattle.

Accepted Answer

Double D Ranch is entitled to keep the cattle and recover the contract price from Esau. Since Esau cancelled the contract, they are in breach of the contract and Double D Ranch is entitled to damages. Double D can recover the contract price from Esau in addition to any other expenses incurred due to Esau’s breach of the contract.

Question 19

Shane's Auto Parts orders twenty tires from Tough Tires, Inc. The truck delivering the tires to Shane's is in an accident and ten of the tires are damaged. Shane's Auto Parts
A) cannot reject the entire shipment.
B) must still pay for all twenty tires at the original contract price.
C) may inspect the tires and accept the shipment with a reduction in price.
D) must reject the entire shipment.

Accepted Answer

Shane's Auto Parts may inspect the tires and accept the shipment with a reduction in price. This is because the damaged tires can be considered as a breach of contract by Tough Tires, Inc. and Shane's Auto Parts can negotiate a reduction in price for the shipment due to the breached terms.

Question 20

Mineral Resource Company contracts to provide several manufacturers with tin. When a cartel of tin-producing countries suddenly embargoes future shipments of tin to Mineral Resource so that it cannot fulfill its contracts, the distributor
A) can substitute some other material for the tin.
B) is excused from the performance of its contracts.
C) is liable for breach of contract.
D) must still supply the tin needs of its customers.

Accepted Answer

When an embargoes happen, it creates an impossibility of performance that the distributor did not anticipate when making the contract. This serves as a force majeure event that excuses the distributor from performing their contractual obligations.

Quiz 11: Performance and Breach of Sales Lease Contracts

Vehicle Leasing Agency (VLA) and Wander Trucking Company enter into a contract for a lease of eight cargo vans. VLA delivers eight vans, but they are not cargo-sized. Wander

On January 10, Winchester Pet Supplies orders fifty small dog collars from Quality Collars, Inc. to be delivered by January 15. On January 13, Quality Collars tenders fifty large dog collars. Winchester Pet Supplies rejects the shipment. Quality Collars has

Screen Perfect, Inc., and TV Stores enter into a contract for a sale of high-definition television sets. Screen Perfect ships goods that do not exactly conform to the contract in some details. TV Stores

Genuine Seed Company and Hillside Farmers Cooperative enter into a contract for a sale of hybrid seeds. Under the perfect tender rule, Genuine Seed must ship or tender seeds to Hillside that

Silas Paving Co. contracts to buy some construction machinery from Massive Earthmovers, Inc. Before either party performs, Massive sells its assets to Phoenix Equipment Corp. On learning of the sale, Silas is concerned about its contract with Massive. Silas should

Pine Mills Corporation and Ur-Choice Lumberyards enter into a contract for a sale of plywood. Under a destination contract, the seller must

Craft Engineering, Inc., contracts for a sale of technical instruments to Detail Design Company. Before the date on which performance is due, Craft notifies Detail that it will not perform. This is

Sof' Chair Company contracts to deliver 100 chairs to Stuffy Furnishings Store on May 1 for which Stuffy agrees to pay. Sof' tells Stuffy on April 15 that delivery will be delayed until June 1. Stuffy may

Sally's Sweet Fruits contracts with Fruits to You, Inc. for a delivery of two hundred pounds of strawberries to be delivered by Keep Kool Trucking, a trucking company with refrigerated trucks. On the day of delivery, the refrigeration units on Keep Kool's trucks are not working. Fruits to You

Levi's Toy Store orders one hundred board games from Big Board Games Warehouse. When the games are delivered, they are all missing pieces. Levi's Toy Store rejects the shipment. Big Board Games wants to cure. Big Board Games must

Food Packaging, Inc., agrees to sell 50,000 6-ounce yogurt containers to Golden Dairy Company. Food can obtain only 20,000 of the 6-ounce contain?ers, but also ships 30,000 more expensive 8-ounce containers for the same price. Under these circumstances, Golden

Business Rental Corporation (BRC) and Cartage Trucking Company enter into a contract for a lease of ten hydraulic lifts. Under the perfect tender rule, BRC must ship or tender goods to the lessee that

Beef Burgers, Inc. contracts to buy five hundred steers from Fattening Feedlots. Before Fattening Feedlots can deliver the steers, there is an outbreak of disease in the feedlot, and all the cattle are quarantined. In this case the perfect tender rule

Loomis Weaving Company contracts to sell sweaters to Style Mart stores. Before the sweat?ers are delivered, Style Mart indicates that it will not be able to pay. Loomis can resell the goods

Double D Ranch and Esau enter into a contract on August 1 for the sale of 200 cattle. Esau cancels the con?tract ten days later. Double D is unable to sell the cattle to another buyer. Double D is enti?tled to

Shane's Auto Parts orders twenty tires from Tough Tires, Inc. The truck delivering the tires to Shane's is in an accident and ten of the tires are damaged. Shane's Auto Parts

Mineral Resource Company contracts to provide several manufacturers with tin. When a cartel of tin-producing countries suddenly embargoes future shipments of tin to Mineral Resource so that it cannot fulfill its contracts, the distributor