Question 1

Steel Buildings, Inc., agrees to sell four air compressors to Truck Service Center. Five days later, the buyer refuses delivery and cancels the contract. The seller is entitled to

Accepted Answer

The seller can resell the air compressors and recover any damages from the buyer due to the buyer's breach of contract. This is a common remedy under the Uniform Commercial Code (UCC) for sellers when a buyer refuses to accept goods.

Question 2

Pavers Inc. contracts to sell some heavy equipment to Earthmovers, Inc. Before either party performs, Pavers, Inc. sees an article in a local paper about a possible Earthmovers bankruptcy. On learning this, Pavers is concerned about its contract with Earthmovers. Pavers should

Accepted Answer

Pavers Inc. can demand assurances of performance from Earthmovers, Inc. if they have reasonable grounds for insecurity about Earthmovers' ability to perform under the contract. This is a legal right under the Uniform Commercial Code (UCC) to ensure that the contract will be fulfilled.

Question 3

Fact Pattern 19-1 Daily Bread Bakeries, Inc., contracts to buy all of its ingredient requirements for bread making, at a certain minimum per year, from Enriched Flour & Grain Corporation for six years. After three years, Daily Bread tells Enriched that it plans to sell its assets to Flat Bread Shops, Inc. Flat Bread refuses to assure Enriched that it will continue Daily Bread's contract.
Refer to Fact Pattern 19-1. Enriched Flour can  pursue the following relief

Accepted Answer

Enriched Flour can terminate the contract and seek damages because Flat Bread's refusal to assure performance constitutes anticipatory repudiation, allowing Enriched to treat the contract as breached.

Question 4

Field Farms and Gourmet Restaurant enter into a contract for a sale of lettuce. After Field Farms ships the lettuce but before the restaurant receives it, Gourmet goes out of business and sends notice to Field that it won't be paying for the lettuce. Field

Accepted Answer

Field Farms can stop the shipment because Gourmet Restaurant has repudiated the contract by indicating it will not pay for the lettuce. Under the Uniform Commercial Code (UCC), a seller can stop delivery of goods in transit if the buyer repudiates the contract before receiving the goods.

Question 5

ABC Toy Store ordered one hundred board games from Big Board Games Inc. The games were delivered two weeks prior to the deadline, but they were all missing pieces. ABC rejected the shipment. To cure, Big Board Games must

Accepted Answer

Big Board Games must promptly notify ABC of the intent to cure, as per the Uniform Commercial Code (UCC) which allows sellers to cure a nonconforming delivery if they notify the buyer and make a conforming delivery within the contract time.

Question 6

Kim's Pony Rides orders ten saddles from Little Horse Saddles, Inc. The sales contract states that if the saddles are defective, Kim's will allow Little Horse Saddles to repair or replace them instead of rejecting the shipment. When the saddles arrive, they are defective. In this case,

Accepted Answer

The sales contract includes a provision allowing Little Horse Saddles to repair or replace defective saddles, creating an exception to the perfect tender rule.

Question 7

Tarts & Pies Bakery contracts with Sweet Fruits for strawberries to be delivered by Refrigerated Trucking Company. On the day of delivery, the refrigeration on the trucks is not working. Sweet Fruits

Accepted Answer

According to the UCC, if a carrier breaches their contract by not providing the agreed-upon transportation, the seller may choose to ship the goods through a different carrier and recover damages from the original carrier. In this case, Sweet Fruits may still fulfill their contract with Tarts & Pies Bakery by using a different carrier to deliver the strawberries.

Question 8

Beef Burgers, Inc. contracts to buy five hundred head of cattle from Cattle Ranch. Before the seller can begin any delivery, an outbreak of disease causes a quarantine of the ranch. In this circumstance, the perfect tender rule

Accepted Answer

The perfect tender rule does not apply due to commercial impracticability, as the quarantine makes it impossible for Cattle Ranch to deliver the cattle.

Question 9

Minerals Ltd. contracts to provide tin to several manufacturers. When a group of tin-producing countries suddenly bans sales of tin to Minerals so that it cannot fulfill its contracts, Minerals

Accepted Answer

Minerals Ltd. is excused from the performance of its contracts due to the doctrine of impossibility or force majeure, as the ban on sales of tin by the producing countries is an unforeseen event beyond their control.

Question 10

Fruit of the Plant, Inc., agrees to sell a certain quantity of a high-quality grain seed to Grange Co-op. Fruit of the Plant can obtain only half of the quantity ordered, so the seller also ships a lesser quality seed in twice the amount of the remainder of the order for the same price. Grange Co-op rejects the lesser quality seed. With time for performance not yet expired, Fruit of the Plant can

Accepted Answer

Fruit of the Plant can attempt to cure the defect by providing the correct quality seed before the time for performance expires, as per the Uniform Commercial Code (UCC) which allows sellers to cure defects in goods delivered.

Question 11

Precise Parts, Inc., and Quality Auto stores enter into a contract for a sale of auto parts that meet certain specifications. Precise Parts ships some conforming goods and several cases of goods that do not comply. Quality Auto

Accepted Answer

Under the Uniform Commercial Code (UCC), if a seller delivers goods that do not conform to the contract, the buyer has the right to reject the entire shipment, even if some goods conform.

Question 12

Fact Pattern 19-1 Daily Bread Bakeries, Inc., contracts to buy all of its ingredient requirements for bread making, at a certain minimum per year, from Enriched Flour & Grain Corporation for six years. After three years, Daily Bread tells Enriched that it plans to sell its assets to Flat Bread Shops, Inc. Flat Bread refuses to assure Enriched that it will continue Daily Bread's contract.
Refer to Fact Pattern 19-1. Flat Bread's refusal is

Accepted Answer

Flat Bread's refusal to assure Enriched that it will continue Daily Bread's contract is considered a repudiation of the contract, as it indicates an unwillingness to fulfill the contractual obligations.

Question 13

Soft Chair Company contracts to deliver one hundred chairs to Stuffy Furnishings Store on May 1. Soft tells Stuffy on April 15 that delivery will be delayed until June 1. Stuffy

Accepted Answer

Stuffy has the right to await performance, sue for breach, or suspend its own performance due to Soft's anticipatory repudiation of the contract.

Question 14

Speedy's Auto Parts orders twenty tires from Tough Tires, Inc. Ten of the tires are destroyed during delivery in an accident. Speedy's

Accepted Answer

Speedy's may accept the shipment with a reduction in price because only part of the shipment was destroyed, and they have the option to accept the remaining goods with an adjustment in price for the damaged or missing items.

Question 15

Gold Medical Supply Company and Home & Hospice Care, Inc., enter into a contract for a sale of health care equipment and supplies. Under either a shipment contract or a destination contract, the seller must

Accepted Answer

Under both shipment and destination contracts, the seller must give the buyer reasonable notice to enable the buyer to take delivery. This ensures the buyer is prepared to receive the goods.

Question 16

Business Rental Corporation (BRC) and Cartage Trucking Company enter into a contract for a lease of ten hydraulic lifts. Under the perfect tender rule, BRC must ship or tender goods to the lessee that

Accepted Answer

The perfect tender rule requires that the goods exactly conform to the contract in every detail. Any deviation in the goods will give the lessee the right to either reject the goods or accept the goods and sue for damages. Therefore, BRC must ensure that the hydraulic lifts are delivered exactly as specified in the contract.

Question 17

On July 10, Pet Supply Store orders fifty small dog collars from Quality Collars, Inc. to be delivered by July 15. On July 13, Quality Collars tenders fifty large dog collars. Pet Supply rejects the shipment. Quality Collars has

Accepted Answer

Quality Collars has until July 15 to cure because that is the original delivery date agreed upon, and they have the opportunity to correct the mistake and deliver the correct items by that date.

Question 18

Pine Mills Inc. and Quality Lumber Company enter into a contract for a sale of plywood to be delivered under a destination contract. Pine Mills, the seller, must

Accepted Answer

In a destination contract, the seller is responsible for delivering the goods to a specific location designated by the buyer.

Question 19

H2O Company contracts to sell water storage systems to In-Flo Irrigation, Inc. Before the goods are delivered, In-Flo indicates that it will not be able to pay. H2O can

Accepted Answer

H2O can resell the goods and recover any damages from the buyer because In-Flo has indicated an inability to pay, which is considered an anticipatory breach of contract.

Question 20

Quarry Equipment Corporation and Rock & Gravel Inc. enter into a lease of three bulldozers. Under the perfect tender rule, Quarry must ship or tender bulldozers to Rock & Gravel that, with respect to the contract description, conform

Accepted Answer

The perfect tender rule requires that the goods delivered under a contract must conform exactly to the terms of the contract, without any deviations.

Quiz 19: Performance and Breach