Question 1

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 2

Coffee Roasters,Inc.,sells whole bean and ground coffee to Delicioso Deli under an existing contract.When the cost of coffee beans increases,Delicioso agrees to a price increase,but later wants to cancel the contract.Delicioso may

Accepted Answer

Delicioso may not cancel the contract because they have already agreed to a price increase under the existing contract, indicating acceptance of the modified terms. Contracts, once agreed upon and modified by mutual consent, are binding unless provisions within the contract allow for cancellation under specific conditions, which are not indicated in this scenario.

Question 3

Arnold buys a backhoe from Big Dig Equipment Inc.Arnold is unaware that Credit Collection Company holds a lien against the backhoe when he buys it.If Credit Collection repossesses the backhoe,Arnold can

Accepted Answer

Arnold can recover from Big Dig for breach of warranty because when Big Dig sold the backhoe to Arnold, they implicitly warranted that the title was clear of any liens or claims, such as the one held by Credit Collection Company.

Question 4

iSharp,Inc.,and Jenene,the owner of a Kitchen Time shop,orally agree to a sale of knives and other utensils for $12,000.Jenene gives iSharp a check for $4,000 as a partial payment.This contract is

Accepted Answer

The contract is only enforceable to the extent of the partial payment made by Jenene, which is $4,000. This is because the Statute of Frauds requires contracts for the sale of goods over $500 to be in writing, and since this agreement is for $12,000 and is only oral, it is not fully enforceable. However, the partial payment made by Jenene could create a valid contract for that amount.

Question 5

Fresh Dairy,Inc.,is the offeror and Gelato Ice Cream Company is the offeree under a unilateral sales contract in which Hector's Helado Corporation is also interested.Gelato is not notified of Fresh Dairy's performance within a reasonable time.Gelato

Accepted Answer

If Gelato is not notified of Fresh Dairy's performance within a reasonable time, Gelato may treat the offer as having lapsed. This means that the offer is no longer valid and Gelato is not obligated to accept it.

Question 6

Precious Stones,Inc.,and Sparkling Jewelry stores enter into a contract for a sale of gemstones.Precious Stones does not deliver.The buyer can normally recover as damages the difference between

Accepted Answer

The buyer can recover damages based on the difference between the contract price and the market price, which represents the amount of money the buyer would have saved if the seller had fulfilled the contract, or the amount of money the buyer would have gained if they could have resold the gemstones at market price. This is a common measure of damages in cases of breach of contract.

Question 7

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 finding a way to provide the agreed upon quantity of high-quality seed to Grange Co-op. This would allow them to fulfill their obligations under the contract and avoid any potential liability for breach of contract.

Question 8

Nature's Products,Inc.,sends its standard order form to Omni Distribution Corporation to evidence a sale of packing materials. Omni responds with its own standard purchase order form. Additional terms in the purchase order automatically become part of the contract unless

Accepted Answer

The answer of Nature's Products,Inc.,sends its standard order form to...

Question 9

​Fact Pattern 14-1
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 14-1.Flat Bread's refusal is

Accepted Answer

Flat Bread's refusal to assure Enriched that it will continue Daily Bread's contract amounts to a repudiation of the contract. By explicitly notifying Enriched that it does not intend to perform its obligations under the agreement, Flat Bread has effectively breached the contract.

Question 10

Mantas Moderno Company,which is based in New York,agrees to sell fifty woven carpets,imported from Mexico and currently stored in New Jersey,to NuDecor,Inc.,which is based in Connecticut.If the contract does not indicate where the goods will be delivered,the place of delivery is

Accepted Answer

The answer of Mantas Moderno Company,which is based in New...

Question 11

Car n' Truck Body & Paint Company orders custom paint from Diverse Hues Inc.,but Diverse does not deliver.Car n' Truck will probably be unable to enforce the agreement if the parties omitted

Accepted Answer

Without a quantity term specified in the agreement, it is unclear how much paint Car n' Truck ordered and therefore whether Diverse Hues fulfilled the order or not.

Question 12

Construction Products Company and Dante enter into a contract for a sale of bricks and stones.Construction Products knows the purpose for which Dante will use the goods.Under the UCC,an implied warranty of fitness of a particular purpose arises

Accepted Answer

The answer of Construction Products Company and Dante enter into...

Question 13

Riverside Ranch is a horse breeding facility.Steed Stables is a customer looking for a new stallion for its breeding program.Riverside's representative Tomas shows Steed a stallion that he says is very fertile and can easily breed twenty mares per year.This statement is

Accepted Answer

The answer of Riverside Ranch is a horse breeding facility.Steed...

Question 14

Shane's Auto Parts orders twenty tires from Tough Tires,Inc.The truck delivering the tires to Shane's is in an accident and ten of the tires are damaged.Shane's Auto Parts

Accepted Answer

Since only ten of the tires are damaged, Shane's Auto Parts can inspect the rest of the shipment and accept the undamaged tires with a reduction in price for the ten damaged tires. Rejecting the entire shipment would be excessive, and paying for all twenty tires at the original contract price would not be fair.

Question 15

Commercial Leasing Corporation and Quarry Construction Company enter into a contract for a lease of three excavators.Under the perfect tender rule,Commercial Leasing must ship or tender goods to the lessee that

Accepted Answer

The perfect tender rule states that the goods must conform to the contract description in every way, meaning that they must meet all of the specifications and requirements outlined in the contract. Any deviations or discrepancies would not be considered acceptable under this rule. Therefore, option C is the correct choice.

Question 16

Hydro Source Company contracts to sell pumps,tanks,and water storage systems to Inflo Irrigation,Inc.Before the goods are delivered,Inflo indicates that it will not be able to pay.Hydro Source can

Accepted Answer

If the buyer indicates that they will not be able to pay before the goods are delivered, the seller can cancel the order and resell the goods to someone else. The seller can then recover any damages from the buyer. Therefore, option C is the best choice. Option A is not possible as the buyer has already indicated their inability to pay. Option B is also not suitable as it is not the seller's responsibility to find a buyer for the goods. Option D is not advisable as the seller may incur losses if they do not take any action.

Question 17

​Fact Pattern 14-1
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 14-1.Enriched can

Accepted Answer

Enriched can terminate the contract and seek damages because Daily Bread has breached the contract by not fulfilling their contractual obligation to continue purchasing ingredient requirements from Enriched.

Question 18

Beef Burgers,Inc.contracts to buy five hundred steers from Fattening Feedlots.Before Fattening Feedlots can deliver the steers,there is an outbreak of disease in the feedlot,and all the cattle are quarantined.In this case the perfect tender rule

Accepted Answer

The perfect tender rule does not apply in this situation as it is considered an unforeseeable event (outbreak of disease) that makes the delivery of the steers impossible.

Question 19

Fuel Connector Products,Inc.,agrees to sell Go-Flo,Inc.,a certain quantity of hose couplings and fittings,but the contract does not specify a place of delivery.Go-Flo is expected to pick up the goods.The place of delivery is

Accepted Answer

Since the contract does not specify a place of delivery and Go-Flo is expected to pick up the goods, the default location of delivery would be Fuel Connector's place of business. This is because the seller is usually responsible for delivering the goods to the buyer, and in this case, Go-Flo is the buyer who would need to pick up the goods from the seller, which is Fuel Connector.

Question 20

Sweet Fruits contracts with Fresh2U,Inc.for a delivery of two hundred pounds of strawberries to be delivered by Keep Kool Trucking,a trucking company with refrigerated trucks.On the day of delivery,the refrigeration units on Keep Kool's trucks are not working.Fresh2U

Accepted Answer

Fresh2U is obligated to deliver the goods in a satisfactory condition, and the fact that Keep Kool's refrigeration units are not working would make the strawberries unsatisfactory. However, Fresh2U can still fulfill its obligation by using another trucking company with refrigerated trucks. This would ensure that the strawberries are delivered in a satisfactory condition, and would not require Fresh2U to cancel the contract or delay the delivery.

Quiz 14: Sales, leases, and Product Liability