Exam 21: Performance and Breach of Sales and Lease Contracts

Coal Mine Company buys an excavator from Dig Equipment Inc. Coal Mine is unaware that Equity Credit Company holds a lien against the excavator. If Equity repossesses the goods, Coal Mine can recover for breach of warranty from

Pipe Company includes in its contracts a provision that reads, in large red letters, "There are no warranties that extend beyond the description on the face hereof." This disclaimer negates

If a creditor repossesses goods from a buyer who bought the goods knowing they were subject to a prior claim, the buyer can recover from the seller for breach of warranty.

Field Farm enters into a contract with Gourmet Restaurant for a sale of a certain quantity of specified vegetables. After Field ships the produce but before Gourmet receives it, the buyer declares bankruptcy. Field can stop delivery of the goods in transit

Tender can occur at any hour-and in any manner-such as by a phone call to the buyer, allowing "fifteen minutes to pick up the goods."

Under the UCC, good faith can never be disclaimed.

Ski Shop sells a pair of skis to Tami. When Tami uses the skis, they snap in two. The cause is something that Ski Shop did not know about and could not have discovered. This is a breach of

If a seller fails to deliver conforming goods, the measure of recovery in the buyer's suit for damages is the difference between the contract price and the market price at the place of delivery at the time the buyer learns of the breach.

Fuel Connector Products, Inc., agrees to sell Go-Flo, Inc., a certain quantity of hose couplings and fittings, but the contract does not specify a place of delivery. Go-Flo is expected to pick up the goods. The place of delivery is

Home Redo, Inc., and Ivy enter into a contract for a sale of cabinets and countertops. Home Redo, a merchant who deals in goods of the kind sold, notes that its goods come with an implied warranty of merchantability. Under the UCC, this means that the goods are reasonably

On July 10, Bob's Pet Supply Store orders fifty small dog collars from Canine Collars, Inc. to be delivered by July 15. On July 13, Canine Collars tenders fifty large dog collars. Bob's rejects the shipment. Canine Collars has

Precise Parts, Inc., and Quality Auto stores enter into a contract for a sale of auto parts that meet certain specifications. Precise Parts ships goods that do not comply. Quality Auto

Commercial impracticability arises only when the parties-at the time the contract was made-had reason to foresee a certain event that could make performance "impracticable."

Under the UCC, because a contract for the sale of six freezers does not designate where the goods will be delivered, the place of delivery is the buyer's place of business.

Chair Company contracts to deliver a dozen suites of dining room tables and chairs to Furniture Store on May 1. On April 15, Chair tells Furniture that delivery will be delayed until June 1. Furniture may

Elegant Carpets, Inc., agrees to sell a certain quantity of carpeting to Fantastic Floors stores under a shipment contract. Elegant Carpets must

If a buyer wrongfully refuses to accept the goods, the seller can bring an action for damages equal to the difference between the contract and market prices at the time and place of tender.

A merchant who is in the business of selling certain goods makes an implied warranty of merchantability every time she sells any type of merchandise.

Blake, a salesperson for Custom Commercial Kitchens Inc., shows Dylan, a buyer for Eatery Inc., display items in Custom's showroom, stating that any purchased equipment will match the display. This statement is

An express warranty arises when a seller or lessor indicates that the goods are the "best" of the kind of goods sold.