Question 1

What is the purpose of giving breaching sellers a right to cure? What is the time limit for a seller to cure? Should that time limit be made longer or shorter? What effect does the perfect tender rule have on your analysis?

Accepted Answer

The answer of What is the purpose of giving breaching...

Question 2

Does the great increase in the sale of goods over the Internet have any implications for the perfect tender rule?

Accepted Answer

The answer of Does the great increase in the sale...

Question 3

What special consideration should parties to international contracts for the sale of goods give to the availability of remedies? Should such parties limit the kinds of remedies available? What additional risks to breaching parties exist in the exercise by nonbreaching parties of the various remedies available? In other words,what characteristics of international transactions might let a nonbreaching party exploit the situation?

Accepted Answer

The answer of What special consideration should parties to international...

Question 4

Seller,a manufacturer of radios,contracts to deliver 1,000 radios to the buyer.The radios are delivered at the proper time.The buyer inspected the goods as much as she thought necessary.Some of the radios were sold.Later,it was determined that the radios had two defects.First,the coating on the radios had run,making them somewhat unsightly.Second,a few units were improperly manufactured,so they would not play.The buyer attempts to return all the radios.Discuss the rights and duties of both the buyer and seller in this situation.

Accepted Answer

The answer of Seller,a manufacturer of radios,contracts to deliver 1,000...

Question 5

John needs a new car and goes to the local dealer for Worldwide Motors,a global car manufacturer.John negotiates a deal with the local dealer to buy a new midsize model,the Albatross,for $22,000.The dealer cost on this car is $19,000.John then decided against the Albatross and breached the contract.Later the dealer sold this car to another customer for $21,600.The dealer also incurred $200 in costs connected with John's canceled order.Assuming that the dealer can get as many Albatrosses as it wants,how much can it recover in damages from John? Assume that John has not paid anything to the dealer.

Accepted Answer

The dealer can recover the difference between the contract price and the amount the dealer was able to sell the car to someone else plus any incidental damages incurred as a result of the breach. In this case, the dealer can recover $600, which is the difference between the contract price of $22,000 and the amount the dealer was able to sell the car to someone else for ($21,600). The incidental damages incurred by the dealer of $200 can also be added to this amount for a total of $800, but the question asks for the amount the dealer can recover, not the total amount of damages incurred. Therefore, the best choice is B: $600.

Question 6

A seller contracts to sell some rare coins to a collector for $10,000,to be delivered 2 months after the date of the contract.On the date that delivery is due,the coins are worth $12,000,but the seller refuses to deliver.The collector acquires similar coins the following week for $13,000,the best price he can find.What can the collector recover from the seller?

Accepted Answer

The collector can recover the difference between the contract price and the cost of buying replacement coins, which is $3,000 ($13,000 - $10,000). The fact that the collector bought coins from another seller is irrelevant, as the seller breached the contract and failed to deliver the coins as promised. Therefore, the correct answer choice is D.

Question 7

Roger contracts with Music Company to buy one of its pianos for $2,000.Music Company has several of these pianos in stock and can buy an unlimited number from the manufacturer.Roger refuses to accept this piano,and Music sells it to another customer for $1,900.If Music sues Roger for breach of contract,the proper measure of Music's damages would be:

Accepted Answer

The answer of Roger contracts with Music Company to buy...

Question 8

The store had ordered 100 blankets embossed with "Miata" and received the blankets ordered,but without "Miata" embossed.The plain blankets cost $10 less and sell for $10 less.
Can "Miatas Only" revoke its acceptance of these items?

Accepted Answer

The answer of The store had ordered 100 blankets embossed...

Question 9

Is the perfect tender rule too harsh? Why should a party be able to reject an entire shipment for a very minor nonconformity? Does this work against one of the main policies of the UCC,namely to encourage the formation and performance of contracts?

Accepted Answer

The answer of Is the perfect tender rule too harsh?...

Question 10

A food processing plant enters into a contract with a farmers' cooperative for the purchase of several thousand bushels of wheat at $6.50 per bushel to be delivered on November 15.The contract provides that there will be liquidated damages of $10,000 for each bushel of wheat that the cooperative fails to deliver.Which is true?

Accepted Answer

The liquidated damages clause is invalid because it is excessive and actual damages would be easy to compute if the wheat is not delivered. The clause sets a disproportionate amount of damages in relation to the actual harm caused by the breach of contract. Additionally, the actual damages that would result from the breach are easily calculable since the contract price of the wheat is known. Therefore, the clause is unenforceable as a penalty.

Question 11

An appliance manufacturer contracts to purchase a quantity of steel from Megasteel Corporation to be delivered to the appliance manufacturer on June 1,2002.On April 1,2002,there is a massive explosion at Megasteel's only steel mill that destroys the mill.According to newspaper reports,the mill will take at least one year to be rebuilt and put back into operation.The appliance company purchasing manager makes a frantic phone call to Megasteel asking,"Is it true you won't be making any more steel for at least a year?" The Megasteel representative says that it is true it will not be able to make any steel for at least a year.The appliance manufacturer immediately contracts with another steel company to deliver similar steel on June 1.A shipment of steel is received from each company on June 1.Has the appliance manufacturer breached its contract with Megasteel if it refuses to accept and pay for the Megasteel steel?

Accepted Answer

The answer of An appliance manufacturer contracts to purchase a...

Question 12

John buys some vinyl siding from JKL Construction Company,which installs it on John's house.The siding comes with a 10-year warranty against peeling and chipping.During the fifth year after installation,the siding starts to peel and chip excessively.John sues JKL in the sixth year,but JKL claims that the statute of limitations has run.In these circumstances:

Accepted Answer

The statute of limitations typically begins to run when the breach occurs, which in this case is when the siding started to peel and chip excessively during the fifth year. Since John filed the lawsuit in the sixth year, he is within the statute of limitations period.

Question 13

Why are there so many different options available to a nonbreaching party under the UCC in contracts for the sale of goods? Would it be better to limit the number of remedies so that a party contemplating whether or not to breach will be better able to predict the cost and consequences of a breach?

Accepted Answer

The answer of Why are there so many different options...

Question 14

Seller contracts to deliver 25 vans to buyer on or before March 1.All the other terms to the contract are fixed.On January 2,the seller informs the buyer that the seller will not be able to deliver the goods as promised.The buyer immediately contracts with someone else for the vans.On February 1,the original seller informs the buyer that the vans will be delivered per the original contract.The buyer refuses to accept these vans,and the original seller sues.Discuss the most likely outcome to the suit,fully developing the legal rights of each party.

Accepted Answer

The answer of Seller contracts to deliver 25 vans to...

Question 15

Peach Motors is a factory-authorized dealer for the manufacturer of the Zebra,a popular luxury sport model that is a leading seller.The Zebra comes with almost every conceivable piece of equipment standard.The only option is an automatic transmission.Thus,the only differences in individual cars are the type of transmission and color of the car.Peach Motors orders 30 Zebras from the factory.The cars ordered are various colors and include some with automatic transmission and some with manual transmission.The factory delivers only five Zebras,all with manual transmission,all in orange,the slowest selling color.Peach had ordered no orange Zebras.Discuss Peach's remedies.

Accepted Answer

The answer of Peach Motors is a factory-authorized dealer for...

Question 16

Jane,a private individual,has her only piano for sale.Roger contracts to buy it for $500;however,Roger never accepts or pays for it.Jane then sells it to Mark for $550.Jane had no additional costs or expenses.If Jane sues Roger for breach of contract,the proper measure of Jane's damages would be:

Accepted Answer

Since Jane sold the piano to Mark for more than the contract price with Roger, she suffered no financial loss and thus has no damages to claim.

Question 17

Fashion Futures is an upper end retail clothing store that specializes in clothing for aging baby boomers who don't want to admit that they are aging.Fashion futures entered into a contract to purchase 100 pairs of designer pants each month for the 2001 calendar year.The pants were to be delivered by the tenth day of each month.For the January order,Fashion Futures ordered 50 pairs of black pants and 50 pairs of navy blue pants.When delivered,the order contained 60 pairs of black pants,10 pairs of navy blue pants,and 30 pairs of olive green pants.The order was delivered late in the day on January 10.Fashion Futures is upset because the proper goods were not delivered.On January 12,Fashion Futures sent a letter to the supplier saying that it was keeping 20 pairs of the olive green pants and 20 pairs of the black pants,and rejecting all the others,including all the pants for the other 11 shipments.Discuss the legal issues likely to arise when the supplier objects to these actions.Assume that there are no contract provisions addressing any of the legal issues that might arise.

Accepted Answer

The answer of Fashion Futures is an upper end retail...

Question 18

A seller hears that one of its customers has filed for bankruptcy.The seller demands in writing assurance of performance by the buyer.If the buyer does give written assurance that it will perform:

Accepted Answer

The seller may withhold delivery of the goods despite the assurance of performance because the buyer's bankruptcy may prevent payment of this debt.

Question 19

John needs a new car and goes to the local dealer for Worldwide Motors,a global car manufacturer.John negotiates a deal with the local dealer to buy a new midsize model,the Albatross,for $22,000.The dealer cost on this car is $19,000.John then decided against the Albatross and breached the contract.Later,the dealer sold this car to another customer for $21,600.The dealer also incurred $200 in costs connected with John's canceled order.Assuming that the dealer is allocated only 12 Albatrosses for the year and can get no more,how much can it recover in damages from John? Assume that John has not paid anything to the dealer.

Accepted Answer

The damages that the dealer can recover from John are calculated as follows:

- Reliance damages: the dealer lost $200 in costs connected with John's canceled order. 
- Resale damages: the dealer sold the car to another customer for $21,600, which is $400 less than John's offer. Therefore, the dealer can recover the difference of $400.
- Incidental damages: there are no incidental damages in this case.

Total damages = reliance damages + resale damages
Total damages = $200 + $400
Total damages = $600

Therefore, the dealer can recover $600 in damages from John.

Question 20

Avco Restaurants contracts to purchase $10,000 worth of specially manufactured tablecloths and napkins with its distinctive logo on them.After the seller completes them,Avco wrongfully refuses to accept or pay for these goods.These goods cannot be sold in the open market.If the seller sues Avco,what is the proper measure of damages?

Accepted Answer

Since the goods cannot be sold in the open market, the proper measure of damages is the contract price. The seller is entitled to receive the amount that Avco agreed to pay for the goods as stated in the contract.

Quiz 12: Remedies for Breach of Sales and Lease Contracts