Exam 21: Performance and Breach of Sales and Lease Contracts

Riverside Mill and Standard Contractors enter into a contract for a sale of lumber. The mill knows the purpose for which the buyer will use the goods. Under the UCC, an implied warranty of fitness of a particular purpose arises if

Builders Inc. and Concrete Supply Company enter into a contract for a sale of cement. Concrete delivers, but Builders does not pay. Concrete can recover as damages

A seller who tenders nonconforming goods has reasonable grounds to believe that the buyer will accept the tender if it includes a price allowance.

If a buyer wrongfully refuses to pay for goods, the seller can reclaim them and resell them, without crediting the sale proceeds to the buyer.

Real Stones, Inc., and Sparkling Jewelry Stores enter into a contract for a sale of gemstones. Real Stones does not deliver. Sparkling can recover as damages the difference between

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

Loading Ramps Inc. contracts to sell sixteen loading ramps to Moving Service Inc. Loading Ramps ships the ramps, which Moving Service accepts but does not pay for. Loading Ramps can

Eliza buys a new motorcycle from Fast Bikes, Inc. The most important factor in determining whether an express warranty is created is whether

Fiesta LLC contracts to buy 1,000 balloons from Gas Bags Inc. for $1 per item. When the market price decreases to 50 cents per balloon, Fiesta refuses to go through with the deal. Gas Bags can recover

When the time for performance under a contract expires, the right to cure also expires.

The obligation of commercial reasonableness underlies every sales and lease contract.

Rancho Stables orders ten saddles from Saddles, Inc. The sales contract states that if the tack is defective, Rancho will allow Saddles to repair or replace it instead of rejecting the shipment. When the gear arrives, it is defective. In this case, the perfect tender rule

Pine Mills Inc. agrees to sell a certain quantity of plywood to Quality Lumber Company under a destination contract. Pine Mills must

If a seller fails to deliver the goods, the buyer can purchase other goods to substitute for those due under the contract, but cannot then sue for consequential damages.

Pavers Inc. contracts to buy some heavy equipment from Earthmovers, Inc. Before either party performs, Earthmovers sells its assets to Excavation Corporation. On learning of the sale, Pavers is concerned about its contract with Earthmovers. Pavers should

H2O Company contracts to sell pumps, tanks, and water storage systems to In-Flo Irrigation, Inc. Before the goods are delivered, In-Flo indicates that it will not be able to pay. H2O can

Any use of delivered goods by the buyer-even for the limited purpose of testing them-constitutes acceptance.

If contracting parties agree that defective goods will not be rejected if the seller or lessor can repair or replace them within a reasonable period of time, the perfect tender rule does not apply.

Trucks & Trailers, Inc. (T&T), and United Express Service enter into a contract for a lease of trucks. T&T is a merchant who deals in goods of the kind leased. Under the UCC, an implied warranty of merchantability arises

The parties to a sales contract can limit or exclude consequential damages for any commercial loss-such as a business's lost profits or property damage.