Deck 21: A: Performance Breach of Sales Lease Contracts

Question 1

Acceptance of goods is presumed when a buyer or lessee fails to reject the goods within a reasonable time.

Answer 1

True

Question 2

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

Answer 2

False

Question 3

With an installment contract,if a buyer or lessee accepts a nonconforming installment,the contract is breached.

Answer 3

False

Question 4

The term cure refers to the right of the seller or lessor to reject,adjust,or replace defective or nonconforming goods.

Question 5

A destination contract requires or authorizes a seller to ship goods by a carrier but does not require delivery of goods at a particular destination.

Question 6

If a lessor's tender of delivery fails to conform to a contract in any way,the lessee can reject the goods.

Question 7

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

Question 8

Goods that conform to a contract's description in every way are conforming goods.

Question 9

The doctrine of commercial impracticability only extends to problems that could have been foreseen.

Question 10

If a buyer wrongfully refuses to accept goods,the seller can bring an action to recover the damages sustained.

Question 11

When a buyer has breached a sales contract,and the goods are in his or her possession,the seller can sue to recover the purchase price.

Question 12

In the absence of any specific agreements,the buyer or lessee must make payment prior to receipt of the goods.

Question 13

A buyer who rightfully rejects nonconforming goods can resell the goods and keep the proceeds.

Question 14

Acceptance of goods precludes the buyer or lessee from revoking his or her acceptance.

Question 15

Remedies under the UCC are cumulative.

Question 16

The parties to a sales or lease contract can vary their respective rights and obligations by contractual agreement.

Question 17

If a buyer breaches a contract,the seller can choose to simply cancel the contract.

Question 18

When a buyer or lessee is a consumer,any limitation of consequential damages for personal injuries resulting from consumer goods is prima facie unconscionable.

Question 19

If a lessee wrongfully refuses to accept goods that conform to a contract,the lessor must tender substitute goods.

Question 20

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.

Question 21

Rugged Boats,Inc. ,and Whitewater Rafting enter into a contract for a sale of six custom-made rubber rafts.Whitewater pays for the goods,but Rugged does not deliver.Whitewater can use replevin as a remedy if

A)Rugged is lawfully withholding the goods.
B)Whitewater cannot effectively cure the defect.
C)Whitewater is unable to cover for the goods.
D)the goods have not been identified to the contract.

Question 22

Fact Pattern 21-B1
First State Bank issues a letter of credit in favor of Oboe Company,an American firm,to facilitate an international sales contract to buy resources from Lapland Mining,Ltd. ,a Finnish company.
Refer to Fact Pattern 21-B1.First State Bank is bound to

A)make sure that the parties perform the contract.
B)verify with Oboe that the transaction has been completed.
C)make payment when Lapland presents the proper documents.
D)pay Lapland whenever it asks to be paid.

Question 23

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.

Question 24

Fact Pattern 21-B1
First State Bank issues a letter of credit in favor of Oboe Company,an American firm,to facilitate an international sales contract to buy resources from Lapland Mining,Ltd. ,a Finnish company.
Refer to Fact Pattern 21-B1.In this letter of credit,the ben?eficiary is

A)Lapland.
B)Oboe.
C)First State Bank.
D)Finland.

Question 25

On May 1,City Auto & Truck Sales agrees to sell a car to Dino.Five days later,Dino refuses delivery and cancels the contract.City is enti?tled to

A)force Dino to accept the car.
B)recover any damages from Dino but not resell the car.
C)resell the car and recover any damages from Dino.
D)resell the car but not recover any damages from Dino.

Question 26

Timber Products Corporation and 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.

Question 27

Nu-Tec Company contracts to sell fiber optic cable to Online Services,Inc.Nu-Tec ships the cable,which Online accepts but does not pay for.Nu-Tec can

A)sue to recover the purchase price plus inci?dental damages.
B)sue to recover the purchase price minus inci?dental damages.
C)resell the cable to any buyer willing to reclaim it from Online.
D)require Online to revoke its acceptance of the cable.

Question 28

Gleaming Gem Corporation agrees to sell Jewelry 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)Gleaming's place of business.
B)JOI's place of business.
C)the Annual Gems and Jewels Convention.
D)the U.S.Postal Service office nearest to JOI's place of business.

Question 29

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

A)approximately conform to the contract description.
B)entirely conform to the contract description in most ways.
C)conform to the contract description in every way.
D)substantially conform to the contract description.

Question 30

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

A)destroy the goods.
B)cure the goods to make them conform to the contract.
C)retain the goods without paying for them.
D)reship or store the goods for the seller.

Question 31

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.

Question 32

Design Architects,Inc. ,and Office Supply Company contract for a sale of office furniture.Design Architects,which is insolvent,breaches the contract.Office Supply 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.

Question 33

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

A)cannot reject the entire shipment.
B)can reject the entire shipment.
C)must accept the entire shipment.
D)must reject the entire shipment.

Question 34

Raw Resources,Inc. ,sells unprocessed minerals to commercial proc?essors in Texas.With regard to the UCC's good faith requirement,Raw can

A)avoid it only by a conspicuous written disclaimer.
B)avoid it only by oral disclaimer.
C)avoid it with or without a disclaimer.
D)not disclaim it.

Question 35

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

A)BBQ.
B)Grill Mart.
C)Hope.
D)none of these parties.

Question 36

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

A)await performance,sue Relax-o,or suspend its own performance.
B)only await Relax-o's performance for a commercially reasonable time.
C)only sue Relax-o for breach of contract.
D)only suspend its own performance.

Question 37

Fact Pattern 21-B1
First State Bank issues a letter of credit in favor of Oboe Company,an American firm,to facilitate an international sales contract to buy resources from Lapland Mining,Ltd. ,a Finnish company.
Refer to Fact Pattern 21-B1.Lapland is entitled to payment when it

A)enters into the contract with Oboe.
B)verifies that Oboe has the money to pay for the purchase.
C)complies with the terms and conditions of the letter of credit.
D)asks to be paid.

Question 38

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.

Question 39

Coverall Paints agrees to sell Grade A-1 latex outdoor paint to Dropcloth Painters to be delivered May 8.On May 7,Coverall tenders Grade B-2 paint,which Dropcloth.rejects.Two days later,Coverall tenders Grade C-3 paint with an offer of a price allowance.Coverall has

A)additional,unlimited time to cure.
B)a reasonable,additional time to cure.
C)one more day to cure.
D)no more time to cure.

Question 40

Gunmakers Pride Corporation contracts for the sale of twelve hunting rifles to Hunters Supply store.Gunmakers delivers nonconforming goods.Acceptance will be presumed unless Hunters Supply rejects the goods

A)within a reasonable time after delivery.
B)within a reasonable time after ordering the goods.
C)within any time,since hunting rifles are not perishable.
D)before the last day of the current hunting season.

Question 41

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?

Question 42

Theatrical Supplies Company contracts to sell to Unique Costumes,Inc. ,seven hundred plastic masks at $1 each to be delivered by October 1.Theatrical knows that Unique will use the masks to make Halloween costumes.Unique usually makes $7,000 profit from the cos?tumes' sale.Theatrical fails to deliver on October 1.Unique attempts to buy substitute masks,but must pay $1.20 for each and take delivery on October 15,cutting Unique's sales in half.Unique sues Theatrical.What is the measure of recovery?