Question 1

MoVu Co.contracted to buy 400 round plastic bowls from Continental Industries, then anticipatorily breached the contract when their plans changed.Continental may proceed to identify to the contract conforming goods in its possession so that it can exercise the remedy of resale of the goods.

Accepted Answer

This statement is true. Under the Uniform Commercial Code (UCC), if a buyer anticipatorily breaches a contract, the seller has the right to identify to the contract conforming goods in their possession and resell them, as long as they give the buyer reasonable notice of the resale.

Question 2

If the seller has failed to comply with Code requirements in making a resale of goods that were wrongfully rejected, a good faith purchaser at the resale takes the goods subject to rights of the original buyer.

Accepted Answer

Under the Uniform Commercial Code (UCC), if a seller resells goods in good faith and in a commercially reasonable manner after a buyer has wrongfully rejected them, the good faith purchaser at the resale takes the goods free of any rights of the original buyer, not subject to them.

Question 3

When the buyer breaches a sales contract, if the difference between the contract price and the market price will not place the seller in as good a position as performance would have, then the seller may recover the lost profit.

Accepted Answer

If the buyer breaches the sales contract, the seller can recover the lost profit only if the difference between the contract price and the market price is not sufficient to place the seller in as good a position as performance would have. This is known as the "cover rule" or "substitute transaction rule."

Question 4

If the buyer makes a wrongful rejection, the seller may resell the goods in good faith and in a commercially reasonable manner and the seller may recover from the buyer the difference between the contract price and the resale price, plus any incidental damages, minus expenses saved.

Accepted Answer

This statement correctly describes the legal remedy available to the seller if the buyer wrongfully rejects the goods. The seller may resell the goods and recover damages from the buyer, as specified in the UCC (Uniform Commercial Code).

Question 5

Damages a buyer may recover for loss resulting from requirements, the needs of which the seller had reason to know at the time of contracting and which could not reasonably be prevented by cover, are:

Accepted Answer

Consequential damages are awarded to compensate the buyer for loss resulting from specific requirements that the seller knew or had reason to know about at the time of contracting, and which losses could not be reasonably prevented by obtaining substitute goods (cover). These damages are intended to cover losses directly connected to the breach of contract that were foreseeable by the seller at the time the contract was made.

Question 6

As the result of a seller's breach, a buyer may ask for incidental damages.Incidental damages include costs incurred in:

Accepted Answer

Incidental damages can include a variety of costs that the buyer incurs as a direct consequence of the seller's breach, such as expenses for making calls to find replacement goods, inspecting the goods to assess the breach, and storing the goods if necessary.

Question 7

Ronald agrees to sell Mack goods for $2,000.The value of the goods accepted is $1,500.If the goods had been as warranted, their value would have been $2,600.What are the buyer's damages for breach of warranty?

Accepted Answer

The buyer's damages for breach of warranty are calculated as the difference between the value of the goods as warranted ($2,600) and the value of the goods accepted ($1,500), which is $1,100.

Question 8

The right of the buyer to recover from an insolvent seller the goods in which he has a special property interest and for which he has paid, existed at common law before being included in the Code.

Accepted Answer

The answer of The right of the buyer to recover...

Question 9

If the breach by the seller concerns the whole contract, the buyer may cancel the entire contract.

Accepted Answer

If the breach by the seller concerns the whole contract, the buyer has the right to cancel the entire contract. This is called a material breach, which is a significant violation of the terms of the contract that deprives the buyer of the value of the agreement. In such cases, the buyer may also be entitled to damages.

Question 10

The amount of liquidated damages included in a contract that would be upheld by a court:

Accepted Answer

Liquidated damages must be a reasonable estimate of the actual damages that might result from a breach, and not so high as to be punitive, otherwise they may be regarded as a penalty and not be upheld by a court.

Question 11

The seller may resell the goods identified to a contract:

Accepted Answer

The seller may resell the goods identified to a contract at either a public or private sale, as this allows the seller to mitigate losses and recover costs in a manner that is most suitable given the circumstances of the resale.

Question 12

The fair market value of a 10-foot fishing boat is $1,000.In a special promotion, J's Marina purchases a 10-foot fishing boat for $900.The boat is badly scratched when it arrives.J's Marina, however, accepts the shipment and notifies the seller of the defect.The boat as delivered has a value of $800.If the damaged boat is a breach of warranty by the seller, the buyer may recover from the seller:

Accepted Answer

The buyer may recover the difference between the fair market value of the boat if it had arrived as warranted ($1,000) and its value in the damaged condition ($800), which is $200, plus any incidental and consequential damages that resulted from the breach of warranty.

Question 13

Which of the following is not a remedy of the buyer?

Accepted Answer

The right to stop delivery of the goods is generally a remedy available to the seller, not the buyer, under circumstances where the buyer breaches the contract or fails to fulfill their obligations. The buyer's remedies typically include recovering damages, covering by purchasing substitute goods, and in certain cases, obtaining specific performance.

Question 14

A contractual remedy is optional unless the parties expressly agree that it is to be exclusive.

Accepted Answer

A contractual remedy may be optional unless the parties have specified that it is the only remedy available in case of a breach or dispute.

Question 15

Massey Fabrications sells some equipment to Keiser Co., warranting its suitability for Keiser's purpose.The equipment, which is not suitable for Keiser's purpose, causes $5,000 in damage to Keiser's property and $12,000 in personal injuries.Keiser can recover $17,000 in consequential damages.

Accepted Answer

Keiser can recover $17,000 in consequential damages because the damages directly resulted from the equipment's failure to meet the warranted suitability, encompassing both the property damage and personal injuries.

Question 16

Under the CISG, what are the damages for breach of contract by one party? Does the aggrieved party have any responsibilities after the breach occurs?

Accepted Answer

The answer of Under the CISG, what are the damages...

Question 17

In the Bigelow-Sanford, Inc.v.Gunny Corp.case, the court found:

Accepted Answer

The court found that the Code permits a buyer to cover by buying substitute goods if the buyer acts in good faith and without unreasonable delay.

Question 18

Which of the following is correct with respect to consequential damages under the Code?

Accepted Answer

All the options provided are correct with respect to consequential damages under the Uniform Commercial Code (UCC). Consequential damages can include lost profits from a contract to resell goods that were never delivered (A), require that the seller be made aware of the buyer's particular needs to be held responsible for damages related to those needs (B), and can cover damages for events like the destruction of property due to nonconforming goods (C).

Question 19

a.Under the Code, when can an injured party seek the remedy of specific performance? 
b.How does this rule differ from the common law? 
c.Compare the remedies of replevin and specific performance.How are they alike? How are they different?

Accepted Answer

The answer of a.Under the Code, when can an injured...

Question 20

Specific performance is an equitable remedy which seeks to compel the party in breach to perform the contract according to its terms.

Accepted Answer

This statement correctly defines specific performance as an equitable remedy that can be sought to enforce a party's performance according to the terms of a contract.

Quiz 23: Sales Remediespart V: Negotiable Instruments

MoVu Co.contracted to buy 400 round plastic bowls from Continental Industries, then anticipatorily breached the contract when their plans changed.Continental may proceed to identify to the contract conforming goods in its possession so that it can exercise the remedy of resale of the goods.