Question 1

On May 1,City Auto & Truck Sales agrees to sell a car to Dino.Five days later,Dino refuses delivery and cancels the contract.City is entitled to

Accepted Answer

City Auto & Truck Sales can resell the car and recover any damages from Dino, as they breached the contract by refusing delivery. This is known as an action for breach of contract, where the non-breaching party can seek damages to compensate for any losses resulting from the breach.

Question 2

Citrus Groves contracts with four food companies to sell its entire crop of oranges.When half of the crop is lost to an unexpected insect infestation,Citrus must

Accepted Answer

Citrus Groves must apportion its surviving crop fairly among its customers because it has a duty to mitigate its damages.

Question 3

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

The sudden embargo of tin shipments by the cartel is an event beyond the control of Mineral Resource Company. This is considered as a force majeure or an unforeseeable event that makes the performance of the contracts impossible. As such, Mineral Resource Company is excused from fulfilling its contracts.

Question 4

Double D Ranch and Esau enter into a contract on August 1 for the sale of 200 cattle.Esau cancels the contract ten days later.Double D is unable to sell the cattle to another buyer.Double D is entitled to

Accepted Answer

Double D Ranch can keep the cattle and recover the contract price from Esau as it is a case of anticipatory breach where Esau cancelled the contract before the delivery of the cattle. As Double D is unable to sell the cattle to another buyer, they can claim damages from Esau for the breach of contract. Option A is not valid as Double D cannot force Esau to accept the cattle. Option C is not valid as it is not a viable option for Double D to keep the cattle without any compensation. Option D is not valid as Double D can keep the cattle and recover damages, they are not required to destroy the cattle.

Question 5

Text Publishers,Inc.,contracts for a sale of textbooks to University Bookstores,Inc.Vital Shipping Corporation,the carrier,transports the books to Warehouse Storage Company.Text's right to stop delivery is lost when University's rights to the goods are acknowledged by

Accepted Answer

The answer of Text Publishers,Inc.,contracts for a sale of textbooks...

Question 6

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

Accepted Answer

Stuffy Furnishings Store has several options in this situation. They can await performance, meaning they can choose to wait until June 1 for Relax Chair Company to deliver the chairs. They can also sue Relax for breach of contract, since Relax has failed to perform according to the original agreement. Additionally, Stuffy can suspend its own performance, meaning they can choose not to make any payments or take any further action until Relax fulfills their obligation to deliver the chairs. All of these options are available to Stuffy, but it ultimately depends on their specific needs and priorities.

Question 7

Garden Field Farms and Haute Gourmet Restaurant,Inc.,enter into a contract for a sale of lettuce before Haute Gourmet declares bankruptcy.Garden Field can stop delivery of the goods in transit

Accepted Answer

Under the Uniform Commercial Code (UCC), a seller can stop delivery of goods in transit if the buyer becomes insolvent or bankrupt, regardless of the quantity of goods being shipped. Therefore, Garden Field Farms can stop delivery of the lettuce even if it is not a carload, planeload, or truckload.

Question 8

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 vans that were not the size specified in the contract, this is a breach of contract. As a result, Wander Trucking Company has the right to reject the entire shipment.

Question 9

Ramblin' Country Stables contracts to buy 1,000 horseshoes from Blacksmith,Inc.,for $1 per shoe.When the market price decreases to 50 cents per shoe,Ramblin' refuses to go through with the deal.Blacksmith can recover

Accepted Answer

Ramblin' Country Stables breached the contract by refusing to go through with the deal. However, since the market price decreased to 50 cents per shoe, Blacksmith could have resold the horseshoes and only suffered a loss of $500 (selling for $500 instead of $1,000). Therefore, Blacksmith can recover the difference of the contract price and the resale price, which is $500.

Question 10

According to the court in Case 20.1,Maple Farms,Inc.v.City School District of Elmira,the defense of commercial impracticability will not excuse the performance of a contractual obligation when there is an increase in the seller's costs while the contract is in force

Accepted Answer

The defense of commercial impracticability can be invoked if the increase in costs was not foreseeable at the time the contract was formed, making performance impracticable.

Question 11

Primo Pools Company and Aquatic Recreation,Inc.,enter into a contract for a sale of prefabricated swimming pools.Under either a shipment contract or a destination contract,the seller must

Accepted Answer

The answer of Primo Pools Company and Aquatic Recreation,Inc.,enter into...

Question 12

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 containers,but also ships 30,000 more expensive 8-ounce containers for the same price.Under these circumstances,Golden

Accepted Answer

This situation is a partial shipment and Food Packaging, Inc. cannot fulfill their entire order of 6-ounce yogurt containers. However, they shipped 30,000 more expensive 8-ounce containers for the same price. Golden Dairy Company has the right to reject delivery, but Food Packaging, Inc. can cure the breach by replacing the containers. Golden Dairy Company must provide notice to Food Packaging, Inc. of their intent to cure and Food Packaging, Inc. will have a reasonable time to replace the containers.

Question 13

Loni and Myra enter into a contract for a sale of clarinets and other wind instruments.Loni delivers,but Myra does not pay.Loni can normally recover as damages the difference between

Accepted Answer

The normal measure of damages in a sale of goods contract is the difference between the contract price and the market price at the time of breach. This allows the non-breaching party to be compensated for their loss, which is typically the lost profit they would have gained from the sale. Option A is incorrect because it includes any loss avoided, which is not relevant to the calculation of damages. Option B is incorrect because the hoped-for price is not a relevant factor in determining damages. Option D is incorrect because the current prices in the parties' locations may vary and do not accurately reflect the market price at the time of breach.

Question 14

Sid and Tony enter a contract for a sale of Sid's collection of electric guitars.Before the time for performance,Sid tells Tony that he does not want to deliver the guitars.Anticipatory repudiation is

Accepted Answer

Anticipatory repudiation is the breach of contract before the time of performance. Therefore, the correct choice is A.

Question 15

Summit Supply Company contracts for a sale of medical equipment to Valley Immediate Care Corporation.Summit can enforce its right to payment

Accepted Answer

Summit can enforce its right to payment after Valley has had an opportunity to inspect the goods, as this is a standard practice to ensure that the buyer is satisfied with the goods before payment is required.

Question 16

Regal Manufacturing Company contracts to sell sweaters to Superb Styles Store.Before the sweaters are delivered,Superb indicates that it will not be able to pay.Regal can resell the goods

Accepted Answer

If Superb Styles Store has indicated that they will not be able to pay before the sweaters are delivered, Regal Manufacturing Company can still resell the goods. Option A is the best choice because Regal can either finish the job and then identify the goods for resale or stop the job and then sell the goods. Option B is not the best choice because Regal should have the option to stop the job if there is no guarantee of payment. Option C is not the best choice because Regal can still resell the goods even if they do not stop the job immediately. Option D is not correct because Regal does have the option to resell the goods.

Question 17

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

This scenario describes anticipatory repudiation, which occurs when one party to a contract informs the other party that it will not perform its obligations under the contract before the performance is due.

Question 18

Timber 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 particular destination agreed upon by the buyer and seller.

Question 19

Pep Paints agrees to sell to Quality Painters Grade A-1 latex outdoor paint to be delivered May 8.On May 7,Pep tenders Grade B-2 paint.Quality rejects the Grade B-2 paint.Two days later,Pep tenders Grade C-3 paint with an offer of a price allowance.Pep has

Accepted Answer

Pep has already had two chances to tender the correct grade of paint and has failed both times. Quality Painters can reject the Grade C-3 paint and terminate the contract. Pep has no more time to cure the breach.

Question 20

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

The perfect tender rule requires that the goods tendered or delivered must conform to the contract in every detail. Therefore, Genuine Seed must ship or tender seeds to Hillside that exactly conform to the contract in every detail.

Quiz 20: Performance Breach of Sales Lease Contracts