Question 1

Quincy buys a car under a warranty from Ride Motors. Quincy soon discovers that the car has a defect that significantly affects its value and use. In all states and the District of Columbia, Quincy may have remedies under

Accepted Answer

Lemon laws are state-specific laws that provide remedies for consumers who purchase defective vehicles. They typically require the manufacturer to repair or replace the vehicle or refund the purchase price. Therefore, Quincy may have remedies under a lemon law.

Question 2

Cheesy Pizza Company contracts to sell 1,000 cases of frozen pizzas to Roller Rinks, Inc., but refuses to deliver. Due to a spice shortage, Roller Rinks cannot obtain pizza elsewhere. Roller Rinks's right to recover the goods from Cheesy is the right of

Accepted Answer

The right of replevin allows the buyer to recover goods that were wrongfully withheld by the seller, even if the buyer cannot cover or obtain substitute goods elsewhere.

Question 3

Fact Pattern 22-B1 
First State Bank issues a letter of credit in favor of Oboe Company, an American firm, to facilitate an international sales contract to buy resources from Lapland Mining, Ltd., a Finnish company.
-Refer to Fact Pattern 22-B1. First State Bank

Accepted Answer

As a letter of credit acts as a guarantee of payment, First State Bank will only make payment when Lapland presents the proper documents. The bank is not responsible for making sure that the parties perform the contract, and payment is made before the transaction is completed.

Question 4

Hi-Tech Company contracts to sell fiber optic cable to Internet Services, Inc. Hi-Tech may bring an action to recover the purchase price and inci?dental damages if Internet

Accepted Answer

The answer of Hi-Tech Company contracts to sell fiber optic...

Question 5

Owen and Pablo enter into a contract for a sale of fifty Western saddles. Pablo pays, but Owen does not deliver. Pablo can normally recover as damages the difference between

Accepted Answer

Pablo can recover as damages the difference between the contract price and the market price, which represents the amount he would have gained if Owen had delivered the goods as agreed. Option A is incorrect because there is no information given about any loss avoided or profit gained. Option B is incorrect because there is no information given about the hoped-for price. Option D is incorrect because the current prices in the parties' locations may not accurately reflect the market price of the saddles.

Question 6

Fact Pattern 22-A1 
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 22-A1. Java can

Accepted Answer

Java can terminate the contract and seek damages because Internet's sale to Kwik Eateries, Inc. raises uncertainty about the continuation of the contract, and Java is not obligated to continue performing under the contract if its rights are not assured.

Question 7

Fact Pattern 22-B1 
First State Bank issues a letter of credit in favor of Oboe Company, an American firm, to facilitate an international sales contract to buy resources from Lapland Mining, Ltd., a Finnish company.
-Refer to Fact Pattern 22-B1. First State Bank must pay Lapland when Lapland

Accepted Answer

First State Bank must pay Lapland when Lapland complies with the terms and conditions of the letter of credit. The letter of credit serves as a guarantee of payment to Lapland once they have fulfilled the terms of the sales contract with Oboe. Verification of Oboe's ability to pay is not relevant to when First State Bank must pay Lapland. The entry into the contract is not sufficient to trigger the obligation to pay by the bank.

Question 8

Fact Pattern 22-B1 
First State Bank issues a letter of credit in favor of Oboe Company, an American firm, to facilitate an international sales contract to buy resources from Lapland Mining, Ltd., a Finnish company.
-Refer to Fact Pattern 22-B1. In a letter of credit, the ben?eficiary is

Accepted Answer

In a letter of credit, the beneficiary is the party in whose favor the letter of credit is issued, which in this case is Lapland Mining, Ltd., as they are the ones receiving the payment under the letter of credit.

Question 9

Ghangzhou, Ltd., in China and Hot Togs, Inc., in the United States enter into a contract for a sale of casual clothing. Under the United Nations Convention on Contracts for the International Sale of Goods (CISG), on a breach of the contract, the nonbreaching party can normally recover as damages the difference between

Accepted Answer

Under the United Nations Convention on Contracts for the International Sale of Goods (CISG), the normal measure of damages for breach of contract is the difference between the contract price and the market price at the time and place where the goods should have been delivered. This is known as the "price difference" or "loss of bargain" remedy.

Question 10

BBQ, Inc., makes and sells grills to Grill Mart, a retailer, which sells one of the grills to Hope, a consumer. BBQ and Grill Mart include in their contracts a limitation on consequential damages for personal inju?ries arising from a breach of warranty. This is prima facie un?conscionable with respect to

Accepted Answer

The limitation on consequential damages for personal injuries arising from a breach of warranty is prima facie unconscionable with respect to Hope only, as it would prevent Hope from seeking damages for personal injuries caused by a defective grill. Both BBQ and Grill Mart have the bargaining power to negotiate the terms of their contract, but Hope has no bargaining power as a consumer. Therefore, such a limitation would be considered unconscionable and could be deemed unenforceable with respect to Hope.

Question 11

Double D Ranch and Esau enter into a contract on August 1 for the sale of 200 cattle. Esau cancels the con?tract ten days later. Double D is unable to sell the cattle to another buyer. Double D is enti?tled 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 12

Amble 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, Amble refuses to go through with the deal. Blacksmith can recover

Accepted Answer

Blacksmith can recover the difference between the contract price and the market price, which is $0.50 per shoe for 1,000 shoes, totaling $500.

Question 13

Leather Products Stores, Inc., rejects a shipment of goods that does not conform to its contract with Manufactured Cowhide Corporation, but is unable to obtain instructions from the seller. Leather Products may

Accepted Answer

Leather Products can choose to resell the goods, return them to Manufactured Cowhide Corporation, or store the goods until further instructions are received. Choosing to have all three options available gives Leather Products more flexibility in handling the situation.

Question 14

Delta Boats, Inc., and Eventide Fishing Tours enter into a contract for a sale of seven custom-made swamp boats. Eventide pays for the goods, but Delta does not deliver. Eventide can use replevy as a remedy if

Accepted Answer

Replevy is a remedy that allows a buyer to recover goods wrongfully withheld by the seller when the buyer is unable to cover (find substitute goods).

Question 15

Natural Foods, Inc., orders "Grade A" oil from Olive Grove Farms to process and sell to Pic 'N Pay Grocers. Olive Grove ships "Grade B" oil, which Natural Foods accepts. To recover damages for the nonconformity, Natural Foods must give notice of the breach within a reasonable time to

Accepted Answer

Natural Foods only needs to give notice of the breach to Olive Grove, the supplier who shipped the nonconforming goods. There is no requirement to notify Pic 'N Pay or any government agency in this situation.

Question 16

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

Loni can recover as damages the difference between the contract price and the market price. This is because the market price represents the current value of the goods and is a more accurate reflection of the actual loss suffered by Loni. The hoped-for price (B) is not relevant in determining the damages, and the current prices in the parties' locations (D) may not accurately reflect the market price. Any loss avoided and any profit gained (A) may also be relevant in determining damages, but this is not the only measure of damages that Loni can recover.

Question 17

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...

Question 18

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

Accepted Answer

Regal Manufacturing Company can resell the goods either after finishing the job (and identifying the goods) or after stopping the job. This is because if the job is not finished, Regal can use the materials for other contracts, but if the job is finished and the materials are identified, Regal can't use them for other contracts and can only resell them.

Question 19

Fact Pattern 22-B1 
First State Bank issues a letter of credit in favor of Oboe Company, an American firm, to facilitate an international sales contract to buy resources from Lapland Mining, Ltd., a Finnish company.
-Refer to Fact Pattern 22-B1. To obtain payment, Lapland must comply with all of the requirements of the letter of credit

Accepted Answer

To obtain payment under a letter of credit, the beneficiary (in this case Lapland Mining) must strictly comply with all of the requirements set forth in the letter of credit. Any deviations or discrepancies could result in the issuing bank refusing to make payment.

Question 20

Field Gardens and Gourmet Restaurant, Inc., enter into a con?tract for a sale of lettuce before Gourmet declares bankruptcy. Field can stop delivery of the goods in transit

Accepted Answer

Field Gardens can stop delivery of the goods in transit regardless of the quantity. This is because the contract was entered before the bankruptcy declaration and Field Gardens has the right to stop delivery as an unpaid seller under the Uniform Commercial Code.

Quiz 22: Performance Breach of Sales Lease Contracts