Question 1

Which type of contractual provision affects remedies?

Accepted Answer

A)  Cover. 
B)  Liquidation or limitation of damages. 
C)  Modification or limitation of remedy. 
D)  Both limitation of damages  and limitation of remedy are correct. 
A)  Cover. 
B)  Liquidation or limitation of damages. 
C)  Modification or limitation of remedy. 
D)  Both limitation of damages  and limitation of remedy are correct.

Question 2

Powers sells 5,000 insulators to Falconbury and issues a negotiable document of title for the goods.The insulators are stored in the Southside Warehouse.When Powers discovers that Falconbury is insolvent, he may effectively stop delivery of the goods by notifying Southside not to deliver the goods to Falconbury.

Accepted Answer

A) True 
 B)False

Question 3

A buyer's commercially reasonable charges for the care and custody of goods that a buyer has rightfully rejected are known as:

Accepted Answer

A)  liquidated damages. 
B)  consequential damages. 
C)  cover charges. 
D)  incidental damages. 
A)  liquidated damages. 
B)  consequential damages. 
C)  cover charges. 
D)  incidental damages.

Question 4

Andrews Manufacturing Company has repudiated its contract to sell 500 computers to a computer store.What recourse does the retailer have under the circumstances?

Accepted Answer

A)  It must await the seller's performance. 
B)  It can "cover" by procuring goods elsewhere and then sue for any difference between the cost of cover and the contract price, plus incidental and consequential damages less expenses saved by the breach. 
C)  It can recover punitive damages. 
D)  It can seek specific performance. 
A)  It must await the seller's performance. 
B)  It can "cover" by procuring goods elsewhere and then sue for any difference between the cost of cover and the contract price, plus incidental and consequential damages less expenses saved by the breach. 
C)  It can recover punitive damages. 
D)  It can seek specific performance.

Question 5

A buyer's right to purchase, in good faith and without unreasonable delay, substituted goods from Seller B when Seller A breaches a sales contract is:

Accepted Answer

A)  specific performance. 
B)  cover. 
C)  replevin. 
D)  reclamation. 
A)  specific performance. 
B)  cover. 
C)  replevin. 
D)  reclamation.

Question 6

Amy agrees to buy goods from Van for a contract price of $2,000 payable on delivery.Amy repudiates the contract and refuses to pay anything.Van resells the goods in compliance with the Code for $1,700, incurring $200 in sales commissions but saving $250 in shipping costs.Van would recover from Amy:

Accepted Answer

A)  $250. 
B)  $350. 
C)  the contract price of $2,000. 
D)  $500. 
A)  $250. 
B)  $350. 
C)  the contract price of $2,000. 
D)  $500.

Question 7

In the Bigelow-Sanford, Inc.v.Gunny Corp.case, the court found:

Accepted Answer

A)  the Code permits a buyer to cover by buying substitute goods if the buyer acts in good faith and without unreasonable delay. 
B)  the buyer did not purchase substitute goods in good faith and without unreasonable delay. 
C)  the buyer was required to obtain cover and its failure to do so bars other Code remedies. 
D)  since the buyer did not specifically allocate the spot market replacements to the individual sellers' accounts, the cost of cover could not be determined in this case. 
A)  the Code permits a buyer to cover by buying substitute goods if the buyer acts in good faith and without unreasonable delay. 
B)  the buyer did not purchase substitute goods in good faith and without unreasonable delay. 
C)  the buyer was required to obtain cover and its failure to do so bars other Code remedies. 
D)  since the buyer did not specifically allocate the spot market replacements to the individual sellers' accounts, the cost of cover could not be determined in this case.

Question 8

Replevin is an action at law to recover specific goods in the possession of the defendant which are being unlawfully withheld from the plaintiff.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is not a remedy of the buyer?

Accepted Answer

A)  The buyer may have the right to recover incidental and consequential damages. 
B)  The buyer has the right of cover and to receive damages. 
C)  The buyer may have the right to obtain specific performance. 
D)  The buyer has the right to stop delivery of the goods. 
A)  The buyer may have the right to recover incidental and consequential damages. 
B)  The buyer has the right of cover and to receive damages. 
C)  The buyer may have the right to obtain specific performance. 
D)  The buyer has the right to stop delivery of the goods.

Question 10

The Code's remedies are cumulative, therefore, a seller may both withhold delivery of the goods and identify goods to the contract.

Accepted Answer

A) True 
 B)False

Question 11

Smith's of Dallas agreed to buy $10,000 worth of dresses F.O.B.Dallas from Magnifique Manufacturing Co.in New York for their October 1 Fall Showing.The cost of shipping the dresses is $300.In New York, Magnifique dresses were the rage, but the boom had not yet reached Dallas.By September 15, Smith's realized that the shop could not afford all of these dresses and called Magnifique to cancel the contract before the goods were shipped.On September 15, the market price for the dresses in New York was $9,000 and in Dallas, $5,000.On October 1, the market price had risen to $9,500 in New York and to $7,000 in Dallas.What may Magnifique do? What damages may be sought from Smith's?

Accepted Answer

Magnifique may withhold delivery, cancel

Question 12

A company may be considered insolvent under the Code only if it is unable to pay its debts as they are due.

Accepted Answer

A) True 
 B)False

Question 13

If the seller has failed to comply with Code requirements in making a resale of goods that were wrongfully rejected, a good faith purchaser at the resale takes the goods subject to rights of the original buyer.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is not a remedy available to an unpaid seller against the buyer?

Accepted Answer

A)  Recovery of the price. 
B)  Recovery of incidental damages. 
C)  Cover and sue for damages. 
D)  Cancellation of the contract. 
A)  Recovery of the price. 
B)  Recovery of incidental damages. 
C)  Cover and sue for damages. 
D)  Cancellation of the contract.

Exam 23: Sales Remediespart V: Negotiable Instruments

Which type of contractual provision affects remedies?

A buyer's commercially reasonable charges for the care and custody of goods that a buyer has rightfully rejected are known as:

Andrews Manufacturing Company has repudiated its contract to sell 500 computers to a computer store.What recourse does the retailer have under the circumstances?

A buyer's right to purchase, in good faith and without unreasonable delay, substituted goods from Seller B when Seller A breaches a sales contract is:

Amy agrees to buy goods from Van for a contract price of $2,000 payable on delivery.Amy repudiates the contract and refuses to pay anything.Van resells the goods in compliance with the Code for $1,700, incurring $200 in sales commissions but saving $250 in shipping costs.Van would recover from Amy:

In the Bigelow-Sanford, Inc.v.Gunny Corp.case, the court found:

Replevin is an action at law to recover specific goods in the possession of the defendant which are being unlawfully withheld from the plaintiff.

Which of the following is not a remedy of the buyer?

The Code's remedies are cumulative, therefore, a seller may both withhold delivery of the goods and identify goods to the contract.

A company may be considered insolvent under the Code only if it is unable to pay its debts as they are due.

If the seller has failed to comply with Code requirements in making a resale of goods that were wrongfully rejected, a good faith purchaser at the resale takes the goods subject to rights of the original buyer.

Which of the following is not a remedy available to an unpaid seller against the buyer?

Introduction to Law

Business Ethicspart Ii: the Legal Environment of Business

Civil Dispute Resolution

Constitutional Law

Administrative Law

Criminal Law

Negligence and Strict Liabilitypart Iii: Contracts

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Consideration

Illegal Bargains

Contractual Capacity

Contracts in Writing

Third Parties to Contracts

Performance, Breach, and Discharge

Contract Remediespart Iv: Sales

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Product Liability: Warranties and Strict Liability

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits, Collections, and Funds Transferspart Vi: Agency

Relationship of Principal and Agent

Relationship With Third Partiespart Vii: Business Associations

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature and Formation of Corporations

Financial Structure of Corporations

Management Structure of Corporations

Fundamental Changes of Corporationspart Viii: Debtor and Creditor Relations

Secured Transactions and Suretyship

Bankruptcypart Ix: Regulation of Business

Securities Regulation

Intellectual Property

Employment Law

Antitrust

Accountants Legal Liability

Consumer Protection

International Business Lawpart X: Property

Introduction to Property, Property Insurance, Bailments, and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

Trusts and Wills

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