Question 1

A buyer who accepts nonconforming goods may revoke the acceptance under limited circumstances.

Accepted Answer

A buyer may revoke acceptance of nonconforming goods if the nonconformity substantially impairs the value of the goods and the revocation occurs within a reasonable time after the buyer discovers or should have discovered the nonconformity.

Question 2

What is the difference between incidental damages and consequential damages?

Accepted Answer

The answer of What is the difference between incidental damages...

Question 3

Wimble ordered 1,000 pro-quality luminescent orange tennis balls from Sports Unlimited at a cost of $800. On June 1, Sports Unlimited shipped standard white tennis balls, but Wimble rejected them. Wimble bought the same number of pro-quality luminescent orange balls from another supplier the same day for $650. In a suit against Sports Unlimited, Wimble may recover $800.

Accepted Answer

Wimble may recover the difference between the contract price and the cover price, which is $150 ($800 - $650), not the full $800.

Question 4

Meister Bros. shipped 250 radiator belts to fill Braybon's order. Quality control measures had been in place in Meister's factory when the belts were manufactured. When Braybon received the order one day before it was due, it notified Meister that it rejected the belts because of a variation from the contract specifications. Meister, although it believed the original belts met the contract specifications, notified Braybon that it would supply conforming goods within one week. When the conforming goods arrive in one week,

Accepted Answer

Under the UCC, a seller has the right to cure a non-conforming delivery if they had reasonable grounds to believe the delivery would be acceptable and promptly notifies the buyer of their intention to cure. A buyer must accept a conforming cure if it is made within the contract period or if the seller had reasonable grounds to believe the non-conforming delivery would be acceptable. In this case, Meister Bros. had quality control measures in place, believed the original belts met the specifications, and promptly notified Braybon of their intention to cure, so Braybon should accept the conforming goods.

Question 5

Under the UCC, a buyer's right to reasonably obtain substitute goods because another party has not honored a contract is called

Accepted Answer

The term "cover" under the UCC refers to a buyer's right to obtain substitute goods from a different seller when the original seller fails to deliver the goods as per the contract. This allows the buyer to avoid damages resulting from the seller's breach of contract. Therefore, the correct option is C.

Question 6

A baseball team ordered 500 wooden baseball bats from Bats, Inc., for delivery on June 1. On May 15, the ball team received 500 aluminum bats instead of the wooden ones. As of May 16, Bats, Inc.

Accepted Answer

Bats, Inc. may cure the mistake by delivering the correct wooden bats before the original delivery date of June 1, as the incorrect delivery was made before the agreed delivery date, allowing time for correction.

Question 7

Which of the following statements is NOT TRUE regarding the buyer's right to cover?

Accepted Answer

The buyer's right to cover under the Uniform Commercial Code (UCC) allows, but does not require, the buyer to purchase substitute goods if the seller fails to deliver as promised. The buyer has the option to cover but is not obligated to do so.

Question 8

A buyer's material breach gives the seller the right to refuse to deliver the goods.

Accepted Answer

When a buyer materially breaches a contract, the seller has the right to refuse to deliver the goods without being in breach of the contract themselves. This is because the buyer's breach essentially cancels the contract, freeing the seller from their obligation to deliver.

Question 9

If a buyer does not receive goods by the contract deadline, remedies available include all of the following EXCEPT

Accepted Answer

The remedies available for a buyer who does not receive goods by the contract deadline include incidental and consequential damages, cover, and damages for non-delivery. Additionally, the buyer may have the right to cure the seller's failure to deliver within a reasonable time. Therefore, all options except D are correct.

Question 10

Inez contracted with Filippo Furnaces Co. for the installation of a new furnace. Inez selected the furnace she wanted, accepting no suggestions from Filippo Furnaces' heating engineer. The furnace operated fine, but it did not heat the entire house. The size of the blower on the furnace was too small to accommodate the third floor of the house. Inez sued Filippo Furnaces Co. for the breach of the implied warranties of merchantability and fitness. What result?

Accepted Answer

The answer of Inez contracted with Filippo Furnaces Co. for...

Question 11

Under which circumstances has the buyer accepted goods?

Accepted Answer

Acceptance of goods can be inferred from the buyer's actions that signify ownership, such as using or reselling the goods. Peter's act of selling half of the toy soldiers indicates he has accepted them, as this action demonstrates his assumption of ownership.

Question 12

Reba orders a pair of custom-made cowboy boots, C.O.D. from Home on the Range Western Wear. When the boots arrive, Reba pays the carrier for the boots, then opens the package, only to discover that the boots are the wrong snake skin color and three sizes too big. At this point

Accepted Answer

Reba is entitled to inspect the goods even after payment because of the C.O.D. terms. She can reject the boots because they are nonconforming. The fact that they are the wrong color and three sizes too big are substantial impairments that would entitle Reba to reject the boots.

Question 13

A buyer who accepts goods but notifies the seller the goods are non-conforming

Accepted Answer

If a buyer accepts goods but notifies the seller that the goods are non-conforming, they are entitled to recover the difference between the goods as promised and as delivered, plus incidental and consequential damages. However, if the buyer accepts the non-conforming goods without notifying the seller, they may lose the right to recover any damages.

Question 14

If a seller cures within a reasonable amount of time, the contract

Accepted Answer

If the seller cures within a reasonable amount of time, it means that they have fulfilled their obligations under the contract and performed their duties as required. Therefore, the contract has been performed.

Question 15

Neon orders one thousand 25-foot nylon ropes from Hang'em High Co. Upon inspection of the delivery, Neon learns that Hang'em sent five hundred 25-foot ropes and five hundred 20-foot ropes. Neon may

Accepted Answer

Neon can legally reject the nonconforming goods and accept the conforming goods. In this case, Neon can accept the 500 25-foot ropes and reject the 500 20-foot ropes. Neon can then request a refund or a replacement for the nonconforming goods. Option A is not a legally binding solution, as it requires the seller to provide more goods. Option C is not applicable in this scenario. Option D is not recommended since it may incur additional costs and may not be a feasible solution. Therefore, option B is the best solution.

Question 16

If a contract does not provide for a time for inspection, the UCC allows inspection to take place

Accepted Answer

The UCC states that if a contract does not specify a time for inspection, inspection can take place within a reasonable time. What is considered a reasonable time will depend on the circumstances of each particular case. Therefore, option A is the best choice. The other options (B, C, and D) are not correct because they impose a specific time frame that is not supported by the UCC.

Question 17

A seller may not make repairs or adjustments after the goods have been tendered, even if that action will bring the goods into conformity in order to "cure" nonconforming goods.

Accepted Answer

Under the Uniform Commercial Code (UCC), a seller is generally allowed to make repairs or adjustments after the goods have been tendered if such actions will bring the goods into conformity with the contract. This is known as the right to cure nonconforming goods.

Question 18

Master Glue Hairspray, Inc. contracts to purchase 100 umbrellas with its logo and slogan, "A spray a day keeps the rain and wind away!" specially printed on the umbrellas and its 1-800 telephone number on the umbrella handle. After the seller completes the order, Master Glue refuses to accept or pay for the umbrellas. Because of the special logo and telephone number, the seller has been unable to find a new buyer. If the seller sues Master Glue, what is the proper measure of the seller's damages?

Accepted Answer

The proper measure of the seller's damages is the contract price because the goods were specially manufactured and cannot be sold to others due to their unique customization.

Question 19

If Chuck buys frozen cheese from Cheese, Inc., then fails to inspect the cheese within a reasonable amount of time and does not reject the shipment, Chuck has accepted the shipment even if there is non-conformity.

Accepted Answer

Under UCC 2-607, failure to inspect and reject a shipment within a reasonable time constitutes acceptance of the goods even if there is non-conformity.

Question 20

Buyer Bob breaches his contract for the sale of goods with Seller Suzie. Suzie still has possession of the goods at the time of the breach. Suzie can refuse to deliver the goods and

Accepted Answer

Under the UCC (Uniform Commercial Code) section 2-706, when a buyer breaches a contract for the sale of goods and the seller still has possession of the goods, the seller has the right to resell the goods and sue the buyer for any loss on the sale plus incidental damages less expenses saved. Therefore, the best choice is C.

Quiz 14: The UCC: Sales and Secured Transactions