Question 1

Which of the following is true for the perfect tender rule under installment contracts?
A)The buyer cannot seek remedies against the seller for accepting noncorforming goods.
B)The seller cannot invoke the right to cure rule.
C)The buyer can reject a shipment only if it impairs the value of the entire contract.
D)The buyer can reject replacements or cured goods.

Accepted Answer

Under the perfect tender rule in installment contracts, the buyer can reject a shipment only if the nonconformity substantially impairs the value of the entire contract, not just the individual installment.

Question 2

When is a delivery considered to be complete in a shipment contract?
A)when the buyer receives the shipment
B)when the seller hands over the shipment to the carrier
C)when the shipment reaches the destination that the buyer specified
D)when the seller notifies the buyer of the shipment in transit

Accepted Answer

In a shipment contract, delivery is considered complete when the seller hands over the goods to the carrier for transportation to the buyer. This transfers the risk of loss to the buyer from the point of delivery to the carrier.

Question 3

A(n)________ is an action a party to a sales or lease contract is required by law to carry out.
A)obligation
B)breach
C)capture
D)revocation

Accepted Answer

An obligation is a legal or moral responsibility. In the context of sales or lease contracts, an obligation is a duty that a party is required by law to perform. This can include things like delivering the goods or making payments on time. Breach (B) refers to a violation of the terms of the contract, capture (C) refers to taking possession of something, and revocation (D) refers to the act of cancelling or voiding something.

Question 4

________ is a rule which provides that an action for breach of any written or oral sales or lease contract must commence within four years after the cause of action accrues.
A)Perfect tender rule
B)Specific performance decree
C)Replevin
D)Statute of limitations

Accepted Answer

The statute of limitations is a rule that sets a time limit for bringing legal action for a particular cause, in this case, a breach of sales or lease contract. The statute of limitations for such breaches is typically four years from the date the cause of action accrues. After this time period, the claim becomes time-barred and cannot be brought to court.

Question 5

The obligation of a seller to transfer and deliver goods to the buyer or lessee in accordance with a sales or lease contract is known as ________.
A)the rule of capture
B)deliverance
C)replevin
D)tender of delivery

Accepted Answer

The obligation of a seller to transfer and deliver goods to the buyer or lessee is known as tender of delivery. Option A, the rule of capture, is a legal principle that relates to ownership of natural resources. Option B, deliverance, is not a legal term. Option C, replevin, refers to a legal action to recover wrongfully taken goods.

Question 6

For noncarrier deliveries,if the seller or lessor has no place of business,the place of delivery is the seller's or lessor's residence.

Accepted Answer

According to the Uniform Commercial Code (UCC) § 2-308, if the seller or lessor has no place of business, the place of delivery is the seller's or lessor's residence for noncarrier deliveries.

Question 7

A(n)________ is a sales contract that requires the seller to deliver goods to the buyer's place of business or another specified location.
A)consignment contract
B)option contract
C)shipment contract
D)destination contract

Accepted Answer

A destination contract is a sales contract where the seller is responsible for delivering goods to a specific destination or location, such as the buyer's place of business. The seller must make sure the goods are delivered to the designated location and bear the risk of loss or damage during transit. In comparison, a shipment contract only requires the seller to deliver the goods to a carrier, and the risk of loss or damage during transit shifts to the buyer once the carrier takes possession of the goods. Consignment contracts involve the seller placing goods with a third party to sell on their behalf, and option contracts are agreements that give the buyer the right, but not the obligation, to buy or sell an asset at a set price and time in the future.

Question 8

A(n)________ is a type of contract that requires or authorizes goods to be delivered and accepted in separate lots.
A)option contract
B)installment contract
C)consignment
D)lease contract

Accepted Answer

An installment contract requires or authorizes goods to be delivered and accepted in separate lots. Option contracts give the holder the right, but not the obligation, to buy or sell an asset at a predetermined price or before a certain date. Consignment is a business arrangement in which a seller sends goods to a buyer or reseller, but retains ownership until the goods are sold. A lease contract grants the use of property for a specified period, in exchange for rent payments.

Question 9

A(n)________ can be obtained in writing from the other party if there is an indication that a contract will be breached by that party.
A)adequate assurance of performance
B)replevy
C)right to obtain specific performance
D)good faith agreement

Accepted Answer

Adequate assurance of performance refers to the right of a party to request written assurance from the other party that they will fulfill their contractual obligations. This can be done if there is an indication that the other party may breach the contract.

Question 10

Which of the following would be considered a breach of contract?
A)acceptance of nonconforming goods by a buyer
B)nonacceptance of conforming goods by a buyer
C)delivery of conforming goods by a seller
D)nondelivery of goods to a buyer that has a document of title

Accepted Answer

The answer of Which of the following would be considered...

Question 11

A sales contract that requires the seller to send the goods to the buyer but not to a specifically named destination is known as a(n)________.
A)shipment contract
B)destination contract
C)option contract
D)consignment contract

Accepted Answer

In a shipment contract, the seller is responsible for delivering the goods to a carrier for transportation to the buyer, but the buyer assumes all risk and responsibility once the carrier takes possession of the goods. There is no specifically named destination in a shipment contract. In a destination contract, the seller is responsible for delivering the goods to a specific destination named in the contract. Option contracts give one party the right, but not the obligation, to buy or sell an asset at a specific price within a predetermined period. Consignment contracts involve the transfer of goods from one party to another for the purpose of sale.

Question 12

Unless otherwise agreed to by the parties,if the buyer purchases goods on credit sale from the seller,the credit period starts from the time ________.
A)the goods are shipped
B)the buyer receives the goods
C)the contract is signed by the buyer
D)the buyer accepts the shipment

Accepted Answer

The answer of Unless otherwise agreed to by the parties,if...

Question 13

Which of the following is true of a contract in which the goods were destroyed,of no fault of the buyer or seller,before the title to goods passed to the buyer?
A)The buyer has to still pay for the destroyed goods.
B)The seller and buyer are excused from contractual obligations.
C)The buyer can successfully claim for replacements from the seller.
D)The seller is obligated to make a new shipment as the previous contract.

Accepted Answer

If the goods were destroyed before the title passed to the buyer, then the risk of loss falls on the seller. Therefore, both the buyer and seller are excused from contractual obligations as the contract becomes void. The buyer does not have to pay for the destroyed goods, and the seller is not obligated to make a new shipment. The buyer may look for alternatives, but the seller is not legally bound to provide replacements.

Question 14

Destination contracts are an example of noncarrier delivery.

Accepted Answer

Destination contracts typically involve a carrier who is responsible for transporting goods to a specific location, where the risk of loss passes to the buyer upon the goods' arrival.

Question 15

Unless otherwise agreed,the buyer's payment in a shipment contract is due to the seller when ________.
A)shipment is in transit
B)goods are delivered
C)contract is signed
D)shipment is handed over to the carriers

Accepted Answer

In a shipment contract, the buyer's payment is due to the seller when the goods are delivered. This means that the seller has fulfilled their obligation to deliver the goods and the buyer is obligated to make payment. It is important to note that unless otherwise agreed, this is the default payment term in a shipment contract.

Question 16

In a destination contract,delivery is completed when the shipment ________.
A)reaches the destination specified in the contract
B)is inspected by the buyer and approved
C)is handed over to the carrier by the seller
D)is in transit to the destination specified in the contract

Accepted Answer

In a destination contract, delivery is completed when the shipment reaches the destination specified in the contract. The responsibility of the seller ends when the goods reach the destination and the buyer takes possession of them. Inspection or approval by the buyer is not relevant in this type of contract. Handing over to the carrier is just the beginning of the transit process.

Question 17

A person buying goods from the place where the goods are manufactured would be an example of ________ delivery.
A)noncarrier case
B)carrier case
C)shipment contract
D)destination contract

Accepted Answer

A noncarrier case involves transactions where the seller is not required to deliver the goods to a carrier for transportation, often because the buyer takes possession of the goods directly from the seller's place of business, such as purchasing goods directly from the manufacturer.

Question 18

Failure of a party to perform an obligation in a sales or lease contract is known as ________.
A)revocation
B)breach
C)acceptance
D)replevin

Accepted Answer

According to the given options, breach is the only term that refers to failure to perform an obligation in a sales or lease contract. Revocation refers to the cancellation of an offer, acceptance is the agreement to the terms of a contract, and replevin is the legal procedure to recover property that has been wrongfully taken.

Question 19

The seller's or lessor's general obligation is to transfer and deliver the goods to the buyer or lessee.

Accepted Answer

This is a basic principle of sales and lease transactions as stated in the Uniform Commercial Code (UCC).

Question 20

Which of the following is true for a "perfect tender rule" delivery?
A)The seller can reject delivery of certain parts of the goods.
B)The buyer can only reject parts of the goods and not the whole shipment.
C)The buyer can seek remedies for accepting nonconforming goods.
D)The seller can seek remedies for noncorforming goods that were accepted by the buyer.

Accepted Answer

The perfect tender rule states that the goods delivered by the seller must conform to the terms of the contract in every way. If the goods do not conform, the buyer can reject the entire shipment or accept the nonconforming goods and seek remedies. The seller does not have the right to reject delivery of certain parts of the goods, and cannot seek remedies for nonconforming goods that were accepted by the buyer.

Quiz 20: Remedies for Breach of Sales and Lease Contracts

Which of the following is true for the perfect tender rule under installment contracts?

When is a delivery considered to be complete in a shipment contract?

A(n) ________ is an action a party to a sales or lease contract is required by law to carry out.

________ is a rule which provides that an action for breach of any written or oral sales or lease contract must commence within four years after the cause of action accrues.

The obligation of a seller to transfer and deliver goods to the buyer or lessee in accordance with a sales or lease contract is known as ________.

For noncarrier deliveries,if the seller or lessor has no place of business,the place of delivery is the seller's or lessor's residence.

A(n) ________ is a sales contract that requires the seller to deliver goods to the buyer's place of business or another specified location.

A(n) ________ is a type of contract that requires or authorizes goods to be delivered and accepted in separate lots.

A(n) ________ can be obtained in writing from the other party if there is an indication that a contract will be breached by that party.

Which of the following would be considered a breach of contract?

A sales contract that requires the seller to send the goods to the buyer but not to a specifically named destination is known as a(n) ________.

Unless otherwise agreed to by the parties,if the buyer purchases goods on credit sale from the seller,the credit period starts from the time ________.

Which of the following is true of a contract in which the goods were destroyed,of no fault of the buyer or seller,before the title to goods passed to the buyer?

Destination contracts are an example of noncarrier delivery.

Unless otherwise agreed,the buyer's payment in a shipment contract is due to the seller when ________.

In a destination contract,delivery is completed when the shipment ________.

A person buying goods from the place where the goods are manufactured would be an example of ________ delivery.

Failure of a party to perform an obligation in a sales or lease contract is known as ________.

The seller's or lessor's general obligation is to transfer and deliver the goods to the buyer or lessee.

Which of the following is true for a "perfect tender rule" delivery?