[Missed Payments] Blake, who loved water sports and relaxing in hot tubs, purchased a hot tub on an installment plan and was to pay the seller monthly. Her last payment was made on January 2, 2011. After several failed attempts at collection, the seller brought a lawsuit against Blake for sums remaining on the account on January 3, 2016. Blake defended on the basis that the statute of limitations had expired on the claim. The seller argued, however, that adequate time remained because the UCC applies a flexible statute of limitations; and, at any rate, sellers have at least five years in which to sue. Blake also arranged to purchase a personal watercraft. According to the terms of his contract with the seller, Blake was to pay an initial deposit within 10 days of the sale, at which point she could take possession of the watercraft and make monthly payments thereafter. A couple of days after purchasing the personal watercraft, Blake realized that a personal watercraft would not allow her to invite all her friends on lake trips and purchased a pontoon boat instead. Because the seller of the pontoon boat demanded cash, Blake paid the total sales price prior to delivery. Unfortunately, when the pontoon boat was delivered, Blake found that it had a less powerful motor than the seller represented. Blake notified the seller of the problem, but the seller claimed to have no obligation to remedy the problem. Although she knew that she paid too much for it, Blake decided that since lake season was underway, she would keep the pontoon boat. Because Blake paid full price for the pontoon boat, she was unable to pay within 10 days the deposit on the personal watercraft. The seller refused to deliver the watercraft, and sold it to another customer. Blake informed the seller that the refusal to deliver the watercraft was wrongful and that she was going to exercise her right to cover.
-Does a buyer have a right to "cover" under the UCC?
A) The UCC does not recognize any concept called a right to "cover."
B) The UCC recognizes that sellers have a right to cover and find substitute sellers in the event of a breach of contract to fulfill their obligations.
C) The UCC recognizes the right of cover in regard to the right of buyers to cover transactions involving installment sales with financing statements.
D) The UCC recognizes the right of buyers to cover, or substitute, goods for those due under a sales agreement.
E) The UCC recognizes the right of sellers to resell goods to other buyers in order to cover contractual obligations but only after 30 days.
Correct Answer:
Verified
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