Question 1

Aidan gave a $100 watch to Marian as a birthday present.The watch was made of cheap metal that gave Marian a rash.Which of the following statements is TRUE?

Accepted Answer

The Sale of Goods Act does not apply to gifts because it requires a contract of sale, which involves a transfer of goods for a price. Since Marian did not pay for the watch, it was a gift, not a sale.

Question 2

Marlene agreed to purchase a specific dress from Julian's shop.Although she paid the total price of $750 immediately,she insisted that Julian raise the hemline one inch before delivering it to her house.He agreed to that arrangement.Julian altered the dress as requested.However,before he could deliver the garment to Marlene,the dress was stolen by a thief.Marlene suffers the loss because the risk passed to her as soon as the hemline was raised.

Accepted Answer

In a sale of goods, the risk of loss typically passes to the buyer upon delivery, not upon alteration. Since the dress was not delivered to Marlene, the risk of loss had not yet passed to her.

Question 3

On May 1,Sheila entered into a contract with Brian.She promised to pay $500 to him on June 1 and he promised to deliver a television to her on the same day.Since the Sale of Goods Act only applies to sales,the parties' agreement will not be governed by the statute until June 1.

Accepted Answer

The statement is incorrect. The Sale of Goods Act applies not only to sales, but also to contracts for the supply of goods. Therefore, the parties' agreement will be governed by the statute from the moment the contract is made, not just from June 1.

Question 4

Helene operates a beauty salon.She cut Bentley's hair in exchange for the payment of $25.She also gave him a small bottle of shampoo as a gift sampler.The parties' transaction regarding the shampoo is governed by the Sale of Goods Act.

Accepted Answer

The Sale of Goods Act governs transactions where goods are sold for a price. Since the shampoo was given as a gift, it is not a sale and thus not governed by the Sale of Goods Act.

Question 5

The Sale of Goods Act may apply if you agree to

Accepted Answer

The answer of The Sale of Goods Act may apply...

Question 6

Marianna agreed to rent a generator to Denzel for a six-month period.The Sale of Goods Act will apply to the parties' agreement as long as Denzel actually takes possession of the generator.

Accepted Answer

The Sale of Goods Act applies to the sale of goods, not to rental agreements. Rental agreements are typically governed by different laws or contracts.

Question 7

Although the Sale of Goods Act does not apply to land,it does apply to every form of personal property.

Accepted Answer

The Sale of Goods Act primarily applies to the sale of goods, not every form of personal property. It does not cover intangible assets or services.

Question 8

Which of the following can be the subject of a "sale of goods"?

Accepted Answer

A cow is a tangible movable item, which qualifies as "goods" under the Sale of Goods Act.

Question 9

Sunni purchased a stereo system from an electronics store.The total purchase price was $3000.He paid $2000 with a cheque and $1000 with a credit card.That transaction is governed by the Sale of Goods Act.

Accepted Answer

The fact that Sunni made a purchase at an electronics store suggests that an exchange of goods took place, which makes the transaction subject to the Sale of Goods Act.

Question 10

Pavel bought a widget from Anna.The widget was both unmerchantable and unfit for its intended purpose.However,if Anna did not normally deal in widgets,Pavel could succeed in a claim on the basis of the widget's lack of merchantability,but not on the basis of its lack of fitness for its intended purpose.

Accepted Answer

If Anna did not normally deal in widgets, Pavel could not succeed in a claim based on the widget's lack of merchantability, as the implied warranty of merchantability typically applies to sellers who are merchants with respect to goods of that kind. However, Pavel might still have a claim for lack of fitness for a particular purpose if he relied on Anna's skill or judgment to select the widget for a specific use and she knew of that purpose.

Question 11

Jana entered into an arrangement with Chauds Refrigerators Inc.It delivered a freezer to her restaurant so that she could determine whether or not it was appropriate for her needs.The parties agreed that she would pay $4000 for the freezer if she kept it.Jana used the freezer for six months,but never bothered to communicate with Chauds.The unit was then stolen.Jana probably suffers the burden of that theft because property and risk had already passed to her.

Accepted Answer

Jana entered into an agreement with Chauds to determine whether the freezer was appropriate for her needs. The parties agreed that Jana would pay $4000 for the freezer if she kept it. Jana used the freezer for six months without communicating with Chauds, which indicates that she accepted the freezer, and property and risk passed to her. Therefore, Jana probably suffers the burden of the theft, and the correct answer is A.

Question 12

Elin agreed to buy 100 cartons of widgets from Eldrick at a price of $100 000.He actually delivered 110 cartons of widgets.Elin is entitled to keep that entire shipment,as long as she pays the contract price of $100 000.

Accepted Answer

The answer of Elin agreed to buy 100 cartons of...

Question 13

Because the sale of goods is subject to a codified statute,

Accepted Answer

Codified statutes provide clear rules and guidelines, making it easier for businesses to create transactions with a predictable legal framework.

Question 14

James agreed to sell a widget to Claire for $10 000.She intended to use that item for her personal use.Under the terms of the contract,James agreed to deliver the widget to her on July 1 and Claire promised to pay the full price on the same day.James delivered the widget to Claire,but she did not pay the price as promised.If Claire is insolvent,James is entitled to either exercise a lien over the property or exercise the right of repossession under the Bankruptcy and Insolvency Act.

Accepted Answer

The Bankruptcy and Insolvency Act does not provide a right of repossession for sellers; it deals with the distribution of assets among creditors. James may have a lien under common law or specific statutes, but not under the Bankruptcy and Insolvency Act.

Question 15

Sigmund ordered and ate a meal at the Big Banana restaurant.Which of the following statements is TRUE?

Accepted Answer

The Sale of Goods Act may apply to Sigmund's meal at the Big Banana restaurant in order to protect him as a consumer, regardless of his intentions, method of payment, or whether the meal was provided as a complimentary service.

Question 16

Chuck agreed to sell a widget to Tawny.Under the terms of that contract,she was required to pay $50 000 on May 1 and he was required to deliver the widget to her by June 1.The contract also stated that,regardless of possession,property in the widget would not pass to Tawny until she paid the full price.Tawny failed to pay $50 000 on May 1.However,on May 2,she introduced Chuck to Brandi,who was willing to buy the same widget for $45 000.Chuck insists that Tawny is still required to pay $50 000.Tawny,in contrast,argues that she only has to pay $5000 and that Chuck is required to act reasonably by selling the widget to Brandi for $45 000.Chuck's argument is correct and Tawny's argument is incorrect.

Accepted Answer

Under the terms of the contract, Tawny was required to pay $50,000 on May 1 and Chuck was required to deliver the widget to her by June 1. The contract also stated that property in the widget would not pass to Tawny until she paid the full price. Tawny's failure to pay on May 1 breaches the contract, and Chuck is not required to act reasonably by selling the widget to Brandi for $45,000. Chuck has the right to insist that Tawny pay the full price of $50,000 as originally agreed upon.

Question 17

There is a common element to the seller's right to exercise a lien,a stoppage in transit,or a repossession.In each case,the remedy is available only if the buyer is insolvent or bankrupt.

Accepted Answer

The seller's right to exercise a lien, a stoppage in transit, or a repossession can be invoked even if the buyer is not insolvent or bankrupt. These remedies are available to the seller to secure payment for goods sold or delivered, and do not necessarily require the buyer to be in financial distress.

Question 18

Dawn wanted to buy 10 cricket bats to use to teach the game of cricket to her students.She visited Bradman's Cricket Manufacturing's factory and was shown several types of bats.She selected one of the models and asked Bradman's to send ten copies of that model to her house.The company's representative asked her if she wanted to test that model,but she said,"No,I'm in too much of a hurry." When the bats arrived at Dawn's house,however,she immediately noticed that the handles were manufactured in a way that made them impossibly painful to use.The model that she chose at Bradman's factory suffered from the same defect.Dawn would have noticed that defect if she had tested it.She nevertheless is entitled to reject the bats.

Accepted Answer

The answer of Dawn wanted to buy 10 cricket bats...

Question 19

Because of the need for commercial certainty,it generally is not possible for the parties to a sale of goods contract to exclude the terms implied by the Sale of Goods Act.

Accepted Answer

While there are certain terms implied by the Sale of Goods Act that cannot be excluded, parties to a sale of goods contract can exclude or modify some terms if they agree to do so explicitly and the exclusion or modification does not go against public policy.

Question 20

Merckx Cycle displayed five identical bicycles in its front window.Eddie looked at the five bikes and said,"I'll take one for $750.Pick one and set it aside for me.I'll collect it from you next week." He then paid the entire purchase price and left.The owner of the shop picked one of the five bikes and moved it to a backroom.Two days later,the bike was stolen.Eddie certainly suffers the burden of that theft because property and risk has passed to him.

Accepted Answer

In this scenario, the risk of loss typically remains with the seller until the buyer takes possession of the goods, unless otherwise agreed. Since Eddie had not yet taken possession of the bike, the risk of loss had not passed to him.

Quiz 13: Special Contracts: Sale of Goods