Question 1

What is the basic objective of the Code remedies for breach of contract?

Accepted Answer

The objective of the Code remedies is to put the injured person in the same position that he would have been in if the contract had been performed.

Question 2

S agrees to sell B 10,000 widgets at a price of $1 per widget.After B breaches the contract,S resells the widgets for $0.90 per widget.As a result of selling the widgets at a lower price,S loses $100 in sales commissions.S saved $200 in shipping costs as the new customer was located closer to its factory.What amount can S recover from B?

Accepted Answer

If the seller resells,he may also recover incidental damages,but the seller must give the buyer credit for any expenses that the seller saved because of the buyer's breach of contract.

Question 3

S agrees to sell B 10,000 widgets at a price of $1 per widget.After B breaches the contract,S resells the widgets for $1.10 per widget in a public sale.S also saved $200 in shipping costs.What amount does S owe B?

Accepted Answer

The seller is not accountable to the buyer for any profit that the seller makes on a resale.

Question 4

Which of the following is a condition necessary for a liquidated damages agreement to be enforced?

Accepted Answer

An agreement for liquidated damages is enforced if the amount is reasonable and if actual damages would be difficult to prove in the event of a breach of the contract.

Question 5

Bart agreed to deliver fruits worth $1,000 to a retail store.Bart and the store owner agree that if delivery is not made on time,Bart will pay the store some amount as liquidated damages for the lost sales.Which of the following amounts would most likely be considered unconscionable if they settle for it?

Accepted Answer

If the amount were too small,say $5,it might be considered unconscionable and therefore not enforceable.

Question 6

Russ purchases a new television set from Trista's TVs.The television set carries a four-year express warranty.It was purchased on November 1,2002,and delivered on November 3,2002.On February 3,2007,after four years and three months of service,the set collapsed due to a defect covered by the warranty.Russ discovered this defect on November 5,2002,when he turned the television set on for the first time.When did the Code's statute of limitations begin to run?

Accepted Answer

Normally,a breach of warranty is considered to have occurred when defective goods are delivered to the buyer.

Question 7

Which section of the UCC governs statute of limitations in contract disputes?

Accepted Answer

Under UCC section 2-725,the parties to a contract must file a breach of contract suit within four years.

Question 8

Which of the following is true of the period during which parties can file a lawsuit for breach of a sales contract?

Accepted Answer

The Code provides that a lawsuit for breach of a sales contract must be filed within four years after the breach occurs.The parties to a contract may shorten this period to one year,but they may not extend it for longer than four years.

Question 9

Which of the following remedies would be unavailable to a buyer that could buy the same kind of goods from elsewhere?

Accepted Answer

A buyer cannot get specific performance if she could buy the same kind of good elsewhere.

Question 10

In case of resale of goods arising out of a breach of contract,if the seller sets aside goods intended for the contract or completes the manufacture of such goods,he is:

Accepted Answer

If the seller sets aside goods intended for the contract or completes the manufacture of such goods,he is not obligated to try to resell the goods to someone else.

Question 11

Any attempt to limit consequential damages for injury caused to a person by consumer goods is considered prima facie ________.

Accepted Answer

Any attempt to limit consequential damages for injury caused to a person by consumer goods is considered prima facie unconscionable.

Question 12

When would the amount of liquidated damages agreed to by both parties in a contract be considered unconscionable?

Accepted Answer

If the amount were too small,say $1,it might be considered unconscionable and therefore not enforceable.

Question 13

"Tool For You" (TFY)is a company that sells power tools to consumers.The sales contract of TFY states that it will not be liable for any consequential damages that the consumer suffers as a result of using power tools purchased from them.Harry purchased a table saw from TFY for use in his hobby of woodworking.Harry was injured when the saw blade flew off.He wants to sue TFY but is not sure whether the contract provision limiting consequential damages will be enforced and seeks your opinion.Will TFY prevail?

Accepted Answer

Any attempt to limit consequential damages for injury caused to a person by consumer goods is considered prima facie unconscionable.

Question 14

Liability for consequential damages resulting from a breach of contract may also be limited or excluded by agreement.Will this limitation or exclusion be always enforced?

Accepted Answer

Liability for consequential damages resulting from a breach of contract may also be limited or excluded by agreement.The limitation or exclusion is not enforced if it would be unconscionable.

Question 15

Which of the following is not one of the seller's remedies,once the buyer breaches a contract for the sale of goods?

Accepted Answer

When a buyer breaches a contract,the seller has a number of remedies under the Code,including the right to: (1)cancel the contract, (2)withhold delivery of undelivered goods, (3)recover the purchase price of goods delivered to or accepted by the buyer,and (4)recover from the buyer the profit that the seller would have made on the sale or the damages that the seller sustained.

Question 16

The statute of limitation provision of the UCC holds that for contracts for the sale of goods (in the absence of contractual agreement to the contrary),the period of time within which a lawsuit must be commenced is:

Accepted Answer

The Code provides that a lawsuit for breach of a sales contract must be filed within four years after the breach occurs.

Question 17

S agrees to sell B 10,000 widgets at a price of $1 per widget.After B breaches the contract,S resells the widgets for $0.90 per widget.As a result of selling the widgets at a lower price,S loses $100 in sales commissions.What amount can S recover from B?

Accepted Answer

If the seller decides to resell the goods,he is entitled to recover from the buyer as damages the difference between the resale price and the price the buyer agreed to pay in the contract.

Question 18

Bart agreed to deliver fruits worth $1,000 to a retail store.Bart and the store owner agree that if delivery is not made on time,Bart will pay the store some amount as liquidated damages,for the lost sales.Which of the following amounts would most likely be considered penal if they settle for it?

Accepted Answer

$25,000 in this case is large enough to be considered a penalty.

Question 19

Which of the following is a common way in which a buyer may breach a contract?

Accepted Answer

A buyer may breach a contract in a number of ways.The most common are (1)by wrongfully refusing to accept goods, (2)by wrongfully returning goods, (3)by failing to pay for goods when payment is due,and (4)by indicating an unwillingness to go ahead with the contract.

Question 20

If the parties agree on a reasonable amount of damages that will be paid to the injured party,this amount is known as ________.

Accepted Answer

If the parties agree on the amount of damages that will be paid to the injured party,this amount is known as liquidated damages.

Quiz 22: Remedies for Breach of Sales Contracts