Question 1

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

Accepted Answer

The answer of Summit Supply Company contracts for a sale...

Question 2

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

Golden Dairy Company may reject delivery, but Food Packaging, Inc. can cure the shortage of 6-ounce containers by providing replacements within a reasonable time after notice from Golden Dairy Company. However, Food Packaging, Inc. cannot later replace the containers if Golden Dairy Company accepts the shipment.

Question 3

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' breached the contract by refusing to go through with the deal. Blacksmith could sue Ramblin' for the difference between the contract price ($1 per shoe) and the market price ($0.50 per shoe) for 1,000 shoes, which would be $500. Therefore, the correct answer is C.

Question 4

According to the court in Case 14.1,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 5

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...

Question 6

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

The answer of Citrus Groves contracts with four food companies...

Question 7

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 breached the contract by tendering a non-conforming product twice. Quality Painters rejected the Grade B-2 paint, which signifies that they did not accept Pep's offer to modify the contract. Thus, Pep has already used all their allotted time to cure and has no more time left to cure the non-conforming paint.

Question 8

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 has three options: 
1) Await performance: Stuffy can choose to wait until June 1 for the delivery of chairs, since the contract has not been terminated. 
2) Sue Relax: Stuffy may also choose to sue Relax for breach of contract if they do not receive the chairs by June 1 or if they incur any losses or damages due to the delay. 
3) Suspend its own performance: Stuffy may also suspend its own performance if they are unable to use the chairs until after June 1, but this would require notifying Relax of the suspension and providing a valid reason for it.

Question 9

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 10

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

When a buyer breaches a contract and fails to pay, the seller can normally recover damages in an amount equal to the difference between the contract price and the market price of the goods at the time and place of delivery. In this case, Loni can recover damages in the amount of the contract price minus the current market price of the clarinets and other instruments.

Question 11

Fact Pattern 14-1 
Internet Cafes, Inc., contracts to buy all of its requirements for coffee, at a minimum of 1 million pounds per year, from Java Corporation for six years. After three years, Internet tells Java that it plans to sell its company to Kwik Eateries, Inc. Kwik refuses to assure Java that it will continue Internet’s contract.
-Refer to Fact Pattern 14-1.Java can

Accepted Answer

Java can terminate the contract and seek damages. The fact pattern states that Java has delivered the software and has not been paid, which can be considered a breach of contract by the other party. Therefore, Java has the right to terminate the contract and seek damages for the breach.

Question 12

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

In this scenario, Dino has breached the contract by refusing delivery and canceling the contract. This means that City Auto & Truck Sales is entitled to recover any damages resulting from Dino's breach. Additionally, they have the right to resell the car to mitigate these damages. Therefore, the best choice in this scenario is for City Auto & Truck Sales to resell the car and recover any damages from Dino.

Question 13

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 the delivered vans are not of the agreed cargo size, Wander Trucking Company has the right to reject the entire shipment as it does not meet the requirements of the contract.

Question 14

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 is anticipatory repudiation because Craft has notified Detail in advance that it will not perform its obligations under the contract before the due date. This allows Detail to treat the contract as breached and pursue other options without waiting for the performance deadline.

Question 15

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

Mineral Resource is unable to fulfill its contracts due to the external embargo and is therefore excused from performance. This is called frustration of purpose, which is a legal doctrine that excuses a party's performance in a contract when an unforeseen event occurs that makes performance significantly more difficult or expensive. In this case, Mineral Resource cannot fulfill its contracts without the necessary tin supply, and the embargo was an unforeseeable event that made it impossible for Mineral Resource to fulfill its obligations.

Question 16

Fact Pattern 14-1 
Internet Cafes, Inc., contracts to buy all of its requirements for coffee, at a minimum of 1 million pounds per year, from Java Corporation for six years. After three years, Internet tells Java that it plans to sell its company to Kwik Eateries, Inc. Kwik refuses to assure Java that it will continue Internet’s contract.
-Refer to Fact Pattern 14-1.Kwik's refusal constitutes

Accepted Answer

Kwik's refusal to deliver the goods as per the contract is a clear indication of repudiation, as it shows an intention not to fulfill its obligations under the contract.

Question 17

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 a breach of contract that occurs prior to the time when performance is due. It is a clear indication that one party is not willing or able to fulfill their obligations under the contract, which gives the other party the right to seek damages and terminate the agreement. Therefore, the best choice is A.

Question 18

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

Regal can resell the goods either after finishing the job and identifying the goods, or after stopping the job. This is because Superb's inability to pay for the goods constitutes a breach of contract, and Regal is entitled to sell the goods to mitigate its damages. However, the best course of action may depend on the specific circumstances of the situation.

Question 19

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 as indicated in the contract. The buyer does not have the right to reject the goods unless they do not conform to the specifications outlined in the contract. The seller is also responsible for any damage or loss of the goods during transit to the agreed-upon destination. Therefore, option B is the correct choice.

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 or products delivered by the seller must exactly conform to the details agreed upon in the contract. It means that any deviation from the exact terms of the contract may give the buyer the right to reject the goods. Therefore, Genuine Seed must ship or tender seeds to Hillside that "exactly conform to the contract in every detail." Choice A, B, and D imply some deviation from the contract, which would not be allowed under the perfect tender rule.

Quiz 14: Performance Breach of Sales Lease Contracts