Question 1

Elegant Carpet Inc. agrees to sell a certain quantity of carpeting to Fabulous Floor stores under a shipment contract. Elegant must

Accepted Answer

A) allow Fabulous to reject the goods for any reason. 
B) deliver the carpeting to a particular destination. 
C) inspect the carpeting before shipping it. 
D) place the carpeting into the hands of a carrier. 
A) allow Fabulous to reject the goods for any reason. 
B) deliver the carpeting to a particular destination. 
C) inspect the carpeting before shipping it. 
D) place the carpeting into the hands of a carrier.

Question 2

Under the United Nations Convention on Contracts for the International Sale of Goods, a buyer can avoid obligations under a contract only if the seller fails to deliver the goods.

Accepted Answer

A) True 
 B)False

Question 3

River Gear Company and Scenic Trips Inc. enter into a contract on August 1 for the sale of fifty inflatable river rafts. Scenic cancels the contract ten days later. River is unable to sell the rafts to another buyer. River can

Accepted Answer

A) force the buyer to accept the rafts and pay for them. 
B) recover the contract price but must hold the rafts for the buyer. 
C) recover the contract price and keep the rafts. 
D) recover the contract price but must destroy the rafts. 
A) force the buyer to accept the rafts and pay for them. 
B) recover the contract price but must hold the rafts for the buyer. 
C) recover the contract price and keep the rafts. 
D) recover the contract price but must destroy the rafts.

Question 4

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

Accepted Answer

A) any profit lost minus any loss avoided. 
B) whatever amount Concrete wishes to claim. 
C) the purchase price plus incidental damages. 
D) the market price at the place at which Concrete delivered the goods. 
A) any profit lost minus any loss avoided. 
B) whatever amount Concrete wishes to claim. 
C) the purchase price plus incidental damages. 
D) the market price at the place at which Concrete delivered the goods.

Question 5

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.

Accepted Answer

A) True 
 B)False

Question 6

A letter of credit is independent of the underlying contract between a buyer and seller, requiring the issuer to ascertain whether the contractual conditions have been met.

Accepted Answer

A) True 
 B)False

Question 7

A buyer can revoke his or her acceptance if it was predicated on a reasonable assumption that the goods' nonconformity would be cured, and the nonconformity was not cured.

Accepted Answer

A) True 
 B)False

Question 8

Under the UCC, good faith can never be disclaimed.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A) $1,500. 
B) $1,000. 
C) $500. 
D) $0. 
A) $1,500. 
B) $1,000. 
C) $500. 
D) $0.

Question 10

Real Stones Inc. and Sparkling Jewelry stores enter into a contract for a sale of gemstones. The seller fails to deliver. Sparkling can recover as damages the difference between

Accepted Answer

A) any loss avoided and any profit gained. 
B) the actual price and the hoped-for price. 
C) the contract price and the market price. 
D) the current prices in the contracting parties' places of business. 
A) any loss avoided and any profit gained. 
B) the actual price and the hoped-for price. 
C) the contract price and the market price. 
D) the current prices in the contracting parties' places of business.

Question 11

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.

Accepted Answer

A) True 
 B)False

Question 12

Bayou Boats Inc. contracts for the sale of seven swamp boats to Eventide Fishing Tours. Bayou repudiates the contract. Eventide's recovery is measured at the time

Accepted Answer

A) Bayou advertised the goods. 
B) Eventide ordered the goods. 
C) Eventide learned of the breach. 
D) Bayou knew that it would repudiate the contract. 
A) Bayou advertised the goods. 
B) Eventide ordered the goods. 
C) Eventide learned of the breach. 
D) Bayou knew that it would repudiate the contract.

Question 13

A buyer can revoke his or her acceptance if, despite assurances by the seller that the goods would conform, the buyer was aware of their nonconformity before acceptance.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

If a party to a contract has reasonable grounds to believe that the other party will not perform, he or she can demand in writing assurance of performance.

Accepted Answer

A) True 
 B)False

Question 16

When a buyer or lessee is a consumer, any limitation of damages is per se unconscionable.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) can substitute some other material for the tin. 
B) is excused from the performance of its contracts. 
C) is liable for breach of contract. 
D) must obtain tin in any way to meet the needs of its customers. 
A) can substitute some other material for the tin. 
B) is excused from the performance of its contracts. 
C) is liable for breach of contract. 
D) must obtain tin in any way to meet the needs of its customers.

Question 19

Watercraft Inc., a U.S. firm, files a suit in a U.S. court against Xia Ltd., a Chinese company, seeking specific performance. Under the United Nations Convention for the International Sale of Goods, the court is most likely to grant this remedy if

Accepted Answer

A) no remedy at law is available and the goods at issue are unique. 
B) specific performance is a commonly granted remedy in China. 
C) the measure of damages would be undercut by currency differences. 
D) the parties' deal was a simple letter-of-credit transaction. 
A) no remedy at law is available and the goods at issue are unique. 
B) specific performance is a commonly granted remedy in China. 
C) the measure of damages would be undercut by currency differences. 
D) the parties' deal was a simple letter-of-credit transaction.

Question 20

Nature's Eggs Inc. agrees to supply Omelet Express with five hundred eggs. Nature's Eggs can reasonably ask Omelet Express to pick up the eggs at

Accepted Answer

A) no specific time-only a buyer can set the time. 
B) any reasonable hour. 
C) no time-as a seller, Nature's Eggs must deliver the goods. 
D) any hour. 
A) no specific time-only a buyer can set the time. 
B) any reasonable hour. 
C) no time-as a seller, Nature's Eggs must deliver the goods. 
D) any hour.

Exam 22: Performance and Breachapter of Sales and Lease Contracts

Elegant Carpet Inc. agrees to sell a certain quantity of carpeting to Fabulous Floor stores under a shipment contract. Elegant must

Under the United Nations Convention on Contracts for the International Sale of Goods, a buyer can avoid obligations under a contract only if the seller fails to deliver the goods.

River Gear Company and Scenic Trips Inc. enter into a contract on August 1 for the sale of fifty inflatable river rafts. Scenic cancels the contract ten days later. River is unable to sell the rafts to another buyer. River can

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

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 letter of credit is independent of the underlying contract between a buyer and seller, requiring the issuer to ascertain whether the contractual conditions have been met.

A buyer can revoke his or her acceptance if it was predicated on a reasonable assumption that the goods' nonconformity would be cured, and the nonconformity was not cured.

Under the UCC, good faith can never be disclaimed.

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

Real Stones Inc. and Sparkling Jewelry stores enter into a contract for a sale of gemstones. The seller fails to deliver. Sparkling can recover as damages the difference between

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.

Bayou Boats Inc. contracts for the sale of seven swamp boats to Eventide Fishing Tours. Bayou repudiates the contract. Eventide's recovery is measured at the time

A buyer can revoke his or her acceptance if, despite assurances by the seller that the goods would conform, the buyer was aware of their nonconformity before acceptance.

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

If a party to a contract has reasonable grounds to believe that the other party will not perform, he or she can demand in writing assurance of performance.

When a buyer or lessee is a consumer, any limitation of damages is per se unconscionable.

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

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

Watercraft Inc., a U.S. firm, files a suit in a U.S. court against Xia Ltd., a Chinese company, seeking specific performance. Under the United Nations Convention for the International Sale of Goods, the court is most likely to grant this remedy if

Nature's Eggs Inc. agrees to supply Omelet Express with five hundred eggs. Nature's Eggs can reasonably ask Omelet Express to pick up the eggs at

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