Question 1

On October 1,2009,Dave purchased four new tires for his truck.Each tire came with a four year or 40,000 mile warranty.After driving on the tires for exactly 3 years and 25,000 miles,he discovered a defect.Assuming Dave discovered the defect in a reasonable amount of time,when would he need to bring his claim for breach of warranty?
A)Within four years from October 1,2009
B)Within four years from October 1,2012
C)Within four years from October 1,2013
D)Dave is already too late to bring his claim

Accepted Answer

Normally,a breach of warranty is considered to have occurred when the goods are delivered to the buyer.However,if the warranty covers future performance of goods (e.g. ,a warranty on a tire for four years or 40,000 miles),then the breach occurs at the time the buyer should have discovered the defect in the product.In this case,Dave would have four years from October 1,2012 (the date the buyer should have discovered the defect),to bring his claim for breach of warranty.

Question 2

If goods from a breached contract are resold at a private sale,the seller must:
A)give the buyer 7 days' notice of its intention to resell the goods.
B)hold the sale at a usual place or market for private sales if one is reasonably available.
C)give the buyer notice of the time and place of the resale.
D)give the buyer reasonable notification of his intention to resell the goods.

Accepted Answer

If the goods are resold at a private sale,the seller must give the buyer reasonable notification of his intention to resell [2-706(3)].

Question 3

A buyer is entitled to the remedy of specific performance when:
A)the contract is between merchants.
B)the contract is for unique goods.
C)the contract is for goods where the price is $500 or more.
D)the contract requires delivery in installments.

Accepted Answer

Specific performance means that the buyer can require the seller to give the buyer the goods covered by the contract.Sometimes,the goods covered by a contract are unique and it is not possible for a buyer to obtain substitute goods.When this is the case,the buyer is entitled to specific performance of the contract.

Question 4

Normally,a breach of warranty is considered to have occurred:
A)at the time the buyer should have discovered the defect in the good.
B)at the time the buyer actually discovered the defect in the good.
C)at the time of contract.
D)when the goods are delivered.

Accepted Answer

Normally,a breach of warranty is considered to have occurred when the goods are delivered to the buyer.However,if the warranty covers future performance of goods (e.g. ,a warranty on a tire for four years or 40,000 miles),then the breach occurs at the time the buyer should have discovered the defect in the product.

Question 5

Spokes Bicycles has a contract with Trail Parts,Inc.that requires Spokes to buy 200 bicycle gears from Trail at a price of $50 per gear.For an unknown reason,Spokes cancels the contract after Trail has already finished manufacturing all 200 gears.Trail offers the gears to ACE Bikes for $20 each.ACE is shocked by the great deal because these types of gears normally retail for $50.ACE agrees to purchase the gears.Trail then sues Spokes for its lost profits.Which of the following is true?
A)ACE bikes must pay Trail $50 per gear.
B)Trail is not entitled to damages because it was able to resell the goods.
C)Trail's damages will be limited because its resale was not in good faith and in a commercially reasonable manner.
D)Trail will be able to recover damages for the difference between the resale price and the price the buyer agreed to pay in the contract.

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.However,he may resell them and recover damages.The seller must make any resale in good faith and in a commercially reasonable manner.If the seller does so,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 [2-706].

Question 6

If a seller who learns of the buyer's breach decides to stop manufacturing the goods,she must:
A)sell the goods for their scrap or salvage value.
B)hold on to the goods for 14 days just in case the buyer changes his mind.
C)finish the manufacturing of the goods to prevent waste.
D)try to find a replacement buyer for the finished goods.

Accepted Answer

If the seller is in the process of manufacturing the goods,she has two choices.She may complete manufacture of the goods,or she may stop manufacturing and sell the uncompleted goods for their scrap or salvage value.

Question 7

Which of the following means that the buyer can require the seller to give the buyer the exact goods covered by the contract?
A)Specific performance
B)Trade usage
C)Implicit guarantee
D)Trade warranty

Accepted Answer

Specific performance means that the buyer can require the seller to give the buyer the goods covered by the contract.

Question 8

For warranties that cover the future performance of goods,a breach of warranty occurs:
A)at the time of contract.
B)when the goods are delivered.
C)at the time the buyer actually discovered the defect in the good.
D)at the time the buyer should have discovered the defect in the good.

Accepted Answer

Normally,a breach of warranty is considered to have occurred when the goods are delivered to the buyer.However,if the warranty covers future performance of goods (e.g. ,a warranty on a tire for four years or 40,000 miles),then the breach occurs at the time the buyer should have discovered the defect in the product.

Question 9

If goods from a breached contract are resold at a public sale,the seller must:
A)give the buyer reasonable notification of its intention to resell.
B)hold the sale at a usual place or market for public sales if one is reasonably available.
C)give the buyer notice only if the goods are perishable.
D)give the buyer notice only of the public sale's location.

Accepted Answer

If the resale is a public sale,such as an auction,the seller must give the buyer notice of the time and place of the sale unless the goods are perishable or threaten to decline in value rapidly.The sale must be made at a usual place or market for public sales if one is reasonably available;if the goods are not within the view of those attending the sale,the notification of the sale must state the place where the goods are located and provide for reasonable inspection by prospective bidders.The seller may bid at a public sale [2-706(4)].

Question 10

A contract requires Jim,a farmer,to ship 1,000 dozen eggs to Tim,a grocer.The shipment states "FOB Jim's Farm." If the eggs are lost or damaged:
A)Tim is still responsible for paying Jim for them.
B)Tim is no longer responsible for paying Jim for them.
C)Jim bears the risk of loss.
D)The parties split the risk of loss.

Accepted Answer

In the normal performance of a contract,the seller delivers conforming goods (goods that meet the contract specifications)to the buyer.The buyer accepts the goods and pays for them.The seller is entitled to the purchase price of all goods accepted by the buyer.She also is entitled to the purchase price of all goods that conformed to the contract and were lost or damaged after the buyer assumed the risk for their loss [2-709].Since the eggs were shipped FOB,the risk of loss transferred to Tim when Jim shipped the eggs.

Question 11

In the case in the text,Helena Chemical Co.v.Williamson,the court considered many factors in determining whether Williamson was able to seek consequential damages.Which of the following was not one of those factors?
A)Whether the contract provision was unconscionable
B)Whether the contract provision failed its essential purpose
C)Whether Williamson negligently cared for the crops
D)Whether a mere refund would be adequate

Accepted Answer

In this case,the court held that the contract provision was unconscionable and failed its essential purpose.The court went on to explain that a mere refund would be inadequate in the agricultural context because the loss of expected profits due to defective seeds is not compensated by simply replacing or refunding the price of the defective seeds.The court concluded that if Williamson can prove Helena's negligence at trial,he is not prevented by the agreement from seeking consequential damages.

Question 12

Which of the following statements about consequential damages is false?
A)Any attempt to limit consequential damages for injury caused to a person by consumer goods is considered unconscionable per se.
B)Liability for consequential damages resulting from a breach of contract may be limited by agreement.
C)Liability for consequential damages resulting from a breach of contract may be excluded by agreement.
D)If a limit as to consequential damages is found to be unconscionable,it will not be enforced.

Accepted Answer

Liability for consequential damages resulting from a breach of contract (such as lost profits or damage to property)may also be limited or excluded by agreement.The limitation or exclusion is not enforced if it would be unconscionable.Any attempt to limit consequential damages for injury caused to a person by consumer goods is considered prima facie unconscionable [2-719(3)].

Question 13

If a liquidated damages clause is unenforceable because a court deems it to be unconscionable,the injured party can still recover ________.
A)actual damages suffered.
B)punitive damages.
C)special damages.
D)reasonable attorney's fees.

Accepted Answer

If a liquidated damages clause is not enforceable because it is a penalty or unconscionable,the injured party can recover the actual damages that he suffered.

Question 14

Under the Convention on Contracts for the International Sale of Goods,an aggrieved seller has five potential remedies when the buyer breaches the contract.Which of the following is not one of the remedies available?
A)Suspension of the seller's performance
B)Reclamation of the goods in the buyer's possession
C)Avoidance of the contract
D)Replevin of the contract

Accepted Answer

Under the Convention on Contracts for the International Sale of Goods (CISG),an aggrieved seller has five potential remedies when the buyer breaches the contract: (1)suspension of the seller's performance; (2)"avoidance" of the contract; (3)reclamation of the goods in the buyer's possession; (4)an action for the price;and (5)an action for damages.The last two remedies can be pursued only in a judicial proceeding.

Question 15

When deciding what to do with the unfinished goods after a buyer breaches a contract,the seller must follow a reasonable course of action to ________ her damages.
A)mitigate
B)realize
C)maximize
D)actualize

Accepted Answer

If the seller is in the process of manufacturing the goods,she has two choices.She may complete manufacture of the goods,or she may stop manufacturing and sell the uncompleted goods for their scrap or salvage value.In choosing between these alternatives,the seller should select the alternative that will minimize the loss [2-704(2)].Thus,a seller would be justified in completing the manufacture of goods that could be resold readily at the contract price.However,a seller would not be justified in completing specially manufactured goods that could not be sold to anyone other than the buyer who ordered them.The purpose of this rule is to permit the seller to follow a reasonable course of action to mitigate (minimize)the damages.

Question 16

Under the Convention on Contracts for the International Sale of Goods,________ is commonly utilized by buyers because the initial performance called for in contracts typically rests with the seller.
A)specific performance
B)reclamation of goods
C)suspension of performance
D)avoidance of contract

Accepted Answer

Avoidance of a contract-which,under the CISG,essentially means canceling the contract-is a remedy most commonly utilized by buyers because the initial performance called for in contracts typically rests with the seller.

Question 17

A buyer breaches a contract with a seller.If the contract states the manner in which resale of the goods is to be made,which of the following statements is false?
A)The courts will enforce the agreement unless it is found to be unconscionable.
B)The seller should make it clear that the goods he is selling are those related to the broken contract.
C)The buyer must assist the seller in finding a new buyer.
D)The resale must be made in good faith and in a commercially reasonable manner.

Accepted Answer

If the buyer and seller have agreed as to the manner in which the resale is to be made,the courts will enforce the agreement unless it is found to be unconscionable [2-302].If the parties have not entered into an agreement as to the resale of the goods,they may be resold at public or private sale,but in all events,the resale must be made in good faith and in a commercially reasonable manner.The seller should make it clear that the goods he is selling are those related to the broken contract.

Question 18

In which of the following transactions is the buyer most unlikely to be entitled to specific performance of the contract?
A)A contract for the purchase of a historical artifact
B)A contract for the purchase of 10,000 tons of wheat
C)A contract for the purchase of a Rembrandt painting
D)A contract for the purchase of a 1910 Ford

Accepted Answer

Specific performance means that the buyer can require the seller to give the buyer the exact goods covered by the contract.Sometimes,the goods covered by a contract are unique and it is not possible for a buyer to obtain substitute goods.When this is the case,the buyer is entitled to specific performance of the contract.

Question 19

In Jewish Federation of Greater Des Moines v.Cedar Forrest Products Co. ,the case in the text,the court held that:
A)CFP was entitled to lost profits because Jewish Federation did not act in good faith.
B)CFP,as a lost volume seller,was entitled to lost profits.
C)CFP was not entitled to lost profits because it used the materials for another customer.
D)CFP was not entitled to lost profits because there was no meeting of the minds.

Accepted Answer

The court held that as a lost volume seller,CFP was entitled to its lost profits of $53,887.46.

Question 20

In which of the following transactions is the buyer most likely to be entitled to specific performance of the contract?
A)A contract for the purchase of a tanker of crude oil
B)A contract for the purchase of 1,000 tons of wheat
C)A contract for the purchase of 100,000 light bulbs
D)A contract for the purchase of a Picasso painting

Accepted Answer

Specific performance means that the buyer can require the seller to give the buyer the exact goods covered by the contract.Sometimes,the goods covered by a contract are unique and it is not possible for a buyer to obtain substitute goods.When this is the case,the buyer is entitled to specific performance of the contract.

Quiz 22: Remedies for Breach of Sales Contracts

If goods from a breached contract are resold at a private sale,the seller must:

A buyer is entitled to the remedy of specific performance when:

Normally,a breach of warranty is considered to have occurred:

If a seller who learns of the buyer's breach decides to stop manufacturing the goods,she must:

Which of the following means that the buyer can require the seller to give the buyer the exact goods covered by the contract?

For warranties that cover the future performance of goods,a breach of warranty occurs:

If goods from a breached contract are resold at a public sale,the seller must:

A contract requires Jim,a farmer,to ship 1,000 dozen eggs to Tim,a grocer.The shipment states "FOB Jim's Farm." If the eggs are lost or damaged:

In the case in the text,Helena Chemical Co.v.Williamson,the court considered many factors in determining whether Williamson was able to seek consequential damages.Which of the following was not one of those factors?

Which of the following statements about consequential damages is false?

If a liquidated damages clause is unenforceable because a court deems it to be unconscionable,the injured party can still recover ________.

Under the Convention on Contracts for the International Sale of Goods,an aggrieved seller has five potential remedies when the buyer breaches the contract.Which of the following is not one of the remedies available?

When deciding what to do with the unfinished goods after a buyer breaches a contract,the seller must follow a reasonable course of action to ________ her damages.

Under the Convention on Contracts for the International Sale of Goods,________ is commonly utilized by buyers because the initial performance called for in contracts typically rests with the seller.

A buyer breaches a contract with a seller.If the contract states the manner in which resale of the goods is to be made,which of the following statements is false?

In which of the following transactions is the buyer most unlikely to be entitled to specific performance of the contract?

In Jewish Federation of Greater Des Moines v.Cedar Forrest Products Co. ,the case in the text,the court held that:

In which of the following transactions is the buyer most likely to be entitled to specific performance of the contract?