Question 1

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 outbreak of disease in the feedlot is an example of a force majeure event, which is an unforeseeable circumstance that makes it impossible for one or both parties to perform their obligations under a contract. In such cases, the perfect tender rule does not apply, and the party affected by the force majeure event is excused from performance. Therefore, neither party is obligated to perform under the contract.

Question 2

Sof' Chair Company contracts to deliver 100 chairs to Stuffy Furnishings Store on May 1 for which Stuffy agrees to pay.Sof' tells Stuffy on April 15 that delivery will be delayed until June 1.Stuffy may

Accepted Answer

Stuffy has three options: 
1) Await performance, meaning that they can wait until June 1 for the delivery of the chairs without taking any legal action. 
2) Sue Sof' for breach of contract, which is an option if Stuffy wants to hold Sof' accountable for not fulfilling their contractual obligations. 
3) Suspend its own performance, meaning that Stuffy can hold off on paying until they receive the chairs on June 1. Stuffy has the right to choose any or all of these options.

Question 3

Office Suppliers,Inc.and Little Office Shop enter into a contract for a sale of office supplies.Office Suppliers is the seller.Under a shipment contract,the Office Suppliers does NOT have to

Accepted Answer

In a shipment contract, the seller is only required to put the goods in the hands of the carrier and is not obligated to deliver the goods to a particular destination. Therefore, choice B is the correct answer. Choices A, C, and D are all obligations of the seller under a shipment contract.

Question 4

Business Rental Corporation (BRC) and Cartage Trucking Company enter into a contract for a lease of ten hydraulic lifts.Under the perfect tender rule,BRC must ship or tender goods to the lessee that

Accepted Answer

Under the perfect tender rule, the goods must exactly conform to the contract in every detail. Therefore, BRC must ship or tender the hydraulic lifts that perfectly match all the details of the contract to Cartage Trucking Company.

Question 5

On January 10,Winchester Pet Supplies orders fifty small dog collars from Quality Collars,Inc.to be delivered by January 15.On January 13,Quality Collars tenders fifty large dog collars.Winchester Pet Supplies rejects the shipment.Quality Collars has

Accepted Answer

The answer of On January 10,Winchester Pet Supplies orders fifty...

Question 6

Pine Mills Corporation and Ur-Choice Lumberyards enter into a contract for a sale of plywood.Under a destination contract,the seller must

Accepted Answer

Under a destination contract, the seller is responsible for delivering the goods to a specific destination agreed upon by the seller and buyer. This is in contrast to a shipment contract, where the seller's responsibility ends once the goods are delivered to the carrier.

Question 7

Mineral Resource Company contracts to provide several manufacturers with tin.When a cartel of tin-producing countries suddenly embargoes future shipments of tin to Mineral Resource so that it cannot fulfill its contracts,the distributor

Accepted Answer

When an event occurs that is outside the control of a party, such as an embargo from a third party, it is considered a force majeure event. In this case, the embargo prevents Mineral Resource from fulfilling its contracts, and it would be excused from performance under the force majeure clause in its contracts. Therefore, option B is the correct answer.

Question 8

Craft Engineering,Inc.,contracts for a sale of technical instruments to Detail Design Company.Before the date on which performance is due,Craft notifies Detail that it will not perform.This is

Accepted Answer

When one party to a contract anticipatorily repudiates, they communicate an intention to not perform their obligations under the contract before the performance is due. In this scenario, Craft notifies Detail that they will not perform before the performance is due, constituting an anticipatory repudiation.

Question 9

Silas Paving Co.contracts to buy some construction machinery from Massive Earthmovers,Inc.Before either party performs,Massive sells its assets to Phoenix Equipment Corp.On learning of the sale,Silas is concerned about its contract with Massive.Silas should

Accepted Answer

Silas should demand assurances of performance from Massive, as the contract was made with them and not Phoenix Equipment Corp. Silas should request a confirmation of the sale from both Massive and Phoenix Equipment Corp., and negotiate any necessary changes to the contract terms if needed.

Question 10

Sally's Sweet Fruits contracts with Fruits to You,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.Fruits to You

Accepted Answer

Fruits to You must find a different trucking company with refrigerated trucks to deliver the strawberries to Sally's Sweet Fruits. Canceling the contract and refunding Sally's money is not necessary if an alternative delivery option can be found. Waiting for Keep Kool to fix their trucks would delay the delivery and potentially harm the quality of the strawberries. Incidental damages would only apply if there was a breach of contract causing harm to Sally's business.

Question 11

Genuine Seed Company and Hillside Farmers Cooperative enter into a contract for a sale of hybrid seeds.Under the perfect tender rule,Genuine Seed must ship or tender seeds to Hillside that

Accepted Answer

Under the perfect tender rule, the seller must deliver goods that exactly conform to the contract in every detail. Any deviation from the contract terms, no matter how insignificant, can constitute a breach of the contract. Therefore, Genuine Seed Company must ship or tender seeds to Hillside that exactly conform to the contract in every detail.

Question 12

Screen Perfect,Inc.,and TV Stores enter into a contract for a sale of high-definition television sets.Screen Perfect ships goods that do not exactly conform to the contract in some details.TV Stores

Accepted Answer

TV Stores can reject the entire shipment if the goods do not conform to the contract in essential details. This is because nonconformity in essential matters constitutes a breach of contract, entitling the buyer to reject the entire shipment. However, if the nonconformity is minor, TV Stores cannot reject the entire shipment and must accept the conforming portion of the goods.

Question 13

Kim's Pony Rides orders ten saddles from Little Horse Saddles,Inc.The sales contract states that if the saddles are defective,Kim's will allow Little Horse Saddles to repair or replace them instead of rejecting the shipment.When the saddles arrive,they are defective.In this case,the perfect tender rule

Accepted Answer

The answer of Kim's Pony Rides orders ten saddles from...

Question 14

Food Packaging,Inc.,agrees to sell 50,000 6-ounce yogurt containers to Golden Dairy Company.Food can obtain only 20,000 of the 6-ounce contain?ers,but also ships 30,000 more expensive 8-ounce containers for the same price.Under these circumstances,Golden

Accepted Answer

Golden Dairy Company may reject delivery since Food Packaging, Inc. did not fulfill the agreed upon quantity of 6-ounce yogurt containers. However, if Food Packaging, Inc. provides notice of their intent to cure, Golden Dairy Company must give them a reasonable time to replace the containers. Since Food Packaging, Inc. shipped 30,000 more expensive 8-ounce containers for the same price, they may be able to argue that they provided a suitable substitute to fulfill the contract.

Question 15

Julia orders twelve violins for her music shop from Notable Notes Instrument Manufacturers.The sale is made on credit.Julia orders the violins on May 1,Notable Notes ships the violins on May 2,and Julia receives the violins on May 4.Julia sells all the violins by June 15.Julia's credit period most likely began on

Accepted Answer

The credit period typically begins on the day the goods are shipped, which in this case was May 2 when Notable Notes shipped the violins to Julia.

Question 16

Levi's Toy Store orders one hundred board games from Big Board Games Warehouse.When the games are delivered,they are all missing pieces.Levi's Toy Store rejects the shipment.Big Board Games wants to cure.Big Board Games must

Accepted Answer

The best choice is for Big Board Games to promptly notify Levi's Toy Store of their intent to cure. This means they will attempt to fix the problem, either by sending replacement pieces or substituting with another product. This is the first step in resolving the issue and ultimately satisfying Levi's Toy Store's order.

Question 17

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

According to the UCC (Uniform Commercial Code), if partial delivery of goods is made, the buyer has the right to accept the goods and pay a reduced price for the damaged goods. Therefore, Shane's Auto Parts may inspect the tires and accept the shipment with a reduction in price due to the damaged tires.

Question 18

Vehicle Leasing Agency (VLA) and Wander Trucking Company enter into a contract for a lease of eight cargo vans.VLA delivers eight vans,but they are not cargo-sized.Wander

Accepted Answer

Since VLA delivered a different product than what was agreed upon in the contract, Wander Trucking Company has the right to reject the entire shipment. It is a breach of contract and Wander Trucking Company is not obligated to accept something they did not agree to lease.

Question 19

Garden Field Farms and Haute Gourmet Restaurant,Inc.,enter into a con?tract for a sale of lettuce before Haute Gourmet becomes insolvent.Garden Field can stop delivery of the goods in transit

Accepted Answer

Garden Field Farms can stop delivery of the goods in transit if Haute Gourmet becomes insolvent, unless Haute Gourmet pays in cash, as cash payment provides immediate assurance of payment.

Question 20

Elegant Carpets,Inc.,and Fantastic Floors Stores enter into a contract for a sale of carpeting.Under a shipment contract,the seller must

Accepted Answer

Under a shipment contract, the seller has the obligation to place the goods into the hands of a carrier. The buyer is responsible for arranging for the transportation of the goods from that point on. The seller is not required to deliver the goods to a particular destination or inspect the goods before shipping them. The buyer also does not have the right to reject the goods for any reason.

Quiz 20: Performance and Breach