Question 1

Smith's of Dallas agreed to buy $10,000 worth of dresses F.O.B. Dallas from Magnifique Manufacturing Co. in New York for their October 1 Fall Showing. The cost of shipping the dresses is $300. In New York, Magnifique dresses were the rage, but the boom had not yet reached Dallas. By September 15, Smith's realized that the shop could not afford all of these dresses and called Magnifique to cancel the contract before the goods were shipped. On September 15, the market price for the dresses in New York was $9,000 and in Dallas, $5,000. On October 1, the market price had risen to $9,500 in New York and to $7,000 in Dallas. What may Magnifique do? What damages may be sought from Smith's?

Accepted Answer

The answer of Smith's of Dallas agreed to buy $10,000...

Question 2

Amy agrees to buy goods from Van for a contract price of $2,000 payable on delivery. Amy repudiates the contract and refuses to pay anything. Van resells the goods in compliance with the Code for $1,700, incurring $200 in sales commissions but saving $250 in shipping costs. Van would recover from Amy:

Accepted Answer

The answer of Amy agrees to buy goods from Van...

Question 3

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 fair market value of the boat is $1,000, but J's Marina only paid $900, which means the boat was worth $900 when it was purchased. However, due to the scratches, the boat's value decreased to $800. This means the seller breached the warranty of merchantability, which requires that the goods sold be reasonable for their intended use. As a result, J's Marina can recover the difference between the value of the boat as delivered ($800) and the value of the boat if it had been as warranted ($1,000), which is $200. Additionally, J's Marina can recover incidental and consequential damages, which could include the cost of repairing the scratches, lost profits from not being able to use the boat, and any other costs directly caused by the breach.

Question 4

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 5

Denver has rightfully rejected nonconforming goods that were delivered to him. Explain his interest in those goods in his possession and his rights and duties regarding the goods.

Accepted Answer

The answer of Denver has rightfully rejected nonconforming goods that...

Question 6

Which of the following remedies are mutually exclusive and could not be obtained simultaneously?

Accepted Answer

The answer of Which of the following remedies are mutually...

Question 7

A seller has breached his contract by providing unfit seed for the planting of beans. Damages would include:

Accepted Answer

The breach of contract has caused the buyer to suffer a loss in potential profits from the sale of the bean crop, which would fall under option A. The cost of keeping the defective seed in storage would not be a relevant factor in this case, so option B is incorrect. The cost of replacement seed would be necessary to rectify the situation, making option C a valid choice. As a result, D, "All of these" is the correct answer.

Question 8

Under the Code, what rights do the parties have to affect the possible remedies available in the case of breach?

Accepted Answer

The answer of Under the Code, what rights do the...

Question 9

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...

Question 10

Andrews Manufacturing Company has repudiated its contract to sell 500 computers to a computer store. What recourse does the retailer have under the circumstances?

Accepted Answer

The retailer can "cover" by procuring goods elsewhere and then sue for any difference between the cost of cover and the contract price, plus incidental and consequential damages less expenses saved by the breach. This is a commonly used remedy for breach of contract, known as the cover rule. The other options are not applicable in this situation - the retailer cannot recover punitive damages, must not await the seller's performance, and seeking specific performance may not be practical or effective.

Question 11

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 may include all of the options given, as well as any other costs that arise as a direct result of the seller's breach, such as transportation fees or legal fees.

Question 12

In what three situations will a seller recover the price of goods plus incidental damages?

Accepted Answer

The answer of In what three situations will a seller...

Question 13

What is the purpose of the Code remedies for breach of sales contracts? How is this purpose accomplished?

Accepted Answer

The answer of What is the purpose of the Code...

Question 14

The Code permits the seller to recover the price plus incidental damages in which of the following situation(s)?

Accepted Answer

The seller can recover the price plus incidental damages when the buyer has accepted the goods, as the buyer is obligated to pay for goods they have accepted.

Quiz 23: Sales Remedies