Question 1

If goods are specially manufactured, unique, or rare, a buyer may have the right to specific performance.

Accepted Answer

A) True 
 B)False

Question 2

Consumer protection law prohibits the waiver of defenses in consumer contracts.

Accepted Answer

A) True 
 B)False

Question 3

In the absence of a liquidated damages clause and a proof of greater damages, the seller's damages are computed as:

Accepted Answer

A)  25% of the purchase price or $500, whichever is less. 
B)  25% of the purchase price or $500, whichever is greater. 
C)  20% of the purchase price or $500, whichever is greater. 
D)  20% of the purchase price or $500, whichever is less. 
A)  25% of the purchase price or $500, whichever is less. 
B)  25% of the purchase price or $500, whichever is greater. 
C)  20% of the purchase price or $500, whichever is greater. 
D)  20% of the purchase price or $500, whichever is less.

Question 4

A buyer can be barred from claiming a breach if the sales contract expressly states that the buyer will not assert any defenses against the seller.

Accepted Answer

A) True 
 B)False

Question 5

Some courts allow sellers to recover the profits they would have made if the buyer had completed the transaction.

Accepted Answer

A) True 
 B)False

Question 6

If a buyer refuses to accept specially manufactured goods, the seller has the right to keep the goods, and recover the full purchase price as damages.

Accepted Answer

A) True 
 B)False

Question 7

Rejection of an improper tender of goods constitutes terminates the buyer's options for recovery.

Accepted Answer

A) True 
 B)False

Question 8

A liquidation of damages clause in a consumer contract is enforceable if it:

Accepted Answer

A)  is not in excess of twice the provable damages. 
B)  is agreed to by both parties to the contract. 
C)  reasonably attempts to estimate the actual harm caused by a breach. 
D)  is a reasonable amount designed to punish the breaching party. 
A)  is not in excess of twice the provable damages. 
B)  is agreed to by both parties to the contract. 
C)  reasonably attempts to estimate the actual harm caused by a breach. 
D)  is a reasonable amount designed to punish the breaching party.

Question 9

Peter contracted to purchase five (5) cases of soda and a vacuum cleaner because Peter was planning a party for his son's graduation. Both contract forms that Peter signed contained exclusion of damages clauses; i.e., each contract stated that the buyer had no right to sue the seller in the event that the goods were defective. Instead, each seller's sole obligation was to replace or repair the defective goods within a reasonable time of being notified of the defect(s). These clauses in the contract were set forth in the ordinary type of the contract and were not especially conspicuous.??The vacuum cleaner was delivered on Friday, the day before the party, when the rugs in Peter's home were quite dirty. The vacuum cleaner did not work properly. Peter notified the seller, who responded by saying that nothing could be done until the following week. Frantic because guests were coming, Peter hired a cleaning service to clean the rugs.??While serving the soda to guests, one of the bottle caps burst from an unopened bottle with great force. It struck Peter in the eye and he required medical treatment and hospitalization.??Eventually, Peter sued both sellers for damages. Peter sought the expense of the cleaning service from one. From the other, Peter sought damages for personal injury, including his medical and hospitalization expenses. Both defendant-sellers cited the exclusion of damages clauses as their defense.

Accepted Answer

an exclusion of damages clause does not

Question 10

In the case of a breach of warranties, the buyer:

Accepted Answer

A)  should not notify the seller. 
B)  is required to notify the seller. 
C)  does not have the option to resell the goods. 
D)  is not able to recover consequential damages. 
A)  should not notify the seller. 
B)  is required to notify the seller. 
C)  does not have the option to resell the goods. 
D)  is not able to recover consequential damages.

Question 11

Under both the CISG and the UCC, a buyer may reject goods only if the tender of the goods is a fundamental breach of the contract.

Accepted Answer

A) True 
 B)False

Question 12

If a buyer refuses to pay for goods after an acceptance that was not revoked, the seller may bring action to recover the purchase price and any incidental damages.

Accepted Answer

A) True 
 B)False

Question 13

A buyer may revoke acceptance because of a seller's failure to complete promised repairs.

Accepted Answer

A) True 
 B)False

Question 14

A buyer can revoke acceptance of the goods, if the seller does any of the following, except:

Accepted Answer

A)  the seller fails to deliver conforming goods. 
B)  the seller has repudiated the contract. 
C)  the defective goods substantially impair value of the contract. 
D)  cancels the shipment while in transit. 
A)  the seller fails to deliver conforming goods. 
B)  the seller has repudiated the contract. 
C)  the defective goods substantially impair value of the contract. 
D)  cancels the shipment while in transit.

Question 15

Which of the following is not an example of incidental damages recoverable by a seller?

Accepted Answer

A)  expenses for the care of the goods after the buyer's breach 
B)  expenses for transportation of the goods after the buyer's breach 
C)  expenses for resale of the goods after the buyer's breach 
D)  expenses for the attorney's fees after the buyer's breach 
A)  expenses for the care of the goods after the buyer's breach 
B)  expenses for transportation of the goods after the buyer's breach 
C)  expenses for resale of the goods after the buyer's breach 
D)  expenses for the attorney's fees after the buyer's breach

Question 16

A buyer may reject a tender of delivery:

Accepted Answer

A)  if the goods do not conform to the contract in some way. 
B)  only if the goods have a substantial defect. 
C)  unless the seller promises to cure the defective tender. 
D)  unless the goods have been sold on credit. 
A)  if the goods do not conform to the contract in some way. 
B)  only if the goods have a substantial defect. 
C)  unless the seller promises to cure the defective tender. 
D)  unless the goods have been sold on credit.

Question 17

If a buyer materially breaches the contract, the seller may not cancel the contract until it notifies the buyer.

Accepted Answer

A) True 
 B)False

Question 18

Fran had a very rare, and therefore expensive, automobile that she wished to sell. Fran worried that if the first attempt at selling the auto failed, the value of the auto might come into question. To prevent any potential loss of profit if the auto needed to be resold, Fran created a sales contract that provided for an estimation of damages should the contract later be breached by the potential buyer. A potential buyer was found, and the contract was signed. Later, because of a lack of sufficient financing, the buyer breached the sales contract. Fran requested the estimated damages provided for in the contract. The buyer refused, calling the clause unconscionable and excessive. Can Fran recover?

Accepted Answer

Fran can recover from the buyer's breach

Question 19

The buyer must give notice of the action to the seller if a third party In an action by a third party against the buyer that is based on the seller's breach of warranty, the buyer must give notice of the action to the seller.

Accepted Answer

A) True 
 B)False

Question 20

If a seller elects to resell the goods remaining in the seller's possession after the buyer breaks the contract, the seller:

Accepted Answer

A)  must always give notice of the sale to the original buyer. 
B)  is never required to give notice of the sale to the original buyer. 
C)  is required to follow strict standards in the resale of the goods. 
D)  is not required to give notice of the sale to the original buyer when the goods are perishable. 
A)  must always give notice of the sale to the original buyer. 
B)  is never required to give notice of the sale to the original buyer. 
C)  is required to follow strict standards in the resale of the goods. 
D)  is not required to give notice of the sale to the original buyer when the goods are perishable.

Exam 26: Remedies for Breach of Sales Contracts

If goods are specially manufactured, unique, or rare, a buyer may have the right to specific performance.

Consumer protection law prohibits the waiver of defenses in consumer contracts.

In the absence of a liquidated damages clause and a proof of greater damages, the seller's damages are computed as:

A buyer can be barred from claiming a breach if the sales contract expressly states that the buyer will not assert any defenses against the seller.

Some courts allow sellers to recover the profits they would have made if the buyer had completed the transaction.

If a buyer refuses to accept specially manufactured goods, the seller has the right to keep the goods, and recover the full purchase price as damages.

Rejection of an improper tender of goods constitutes terminates the buyer's options for recovery.

A liquidation of damages clause in a consumer contract is enforceable if it:

In the case of a breach of warranties, the buyer:

Under both the CISG and the UCC, a buyer may reject goods only if the tender of the goods is a fundamental breach of the contract.

If a buyer refuses to pay for goods after an acceptance that was not revoked, the seller may bring action to recover the purchase price and any incidental damages.

A buyer may revoke acceptance because of a seller's failure to complete promised repairs.

A buyer can revoke acceptance of the goods, if the seller does any of the following, except:

Which of the following is not an example of incidental damages recoverable by a seller?

A buyer may reject a tender of delivery:

If a buyer materially breaches the contract, the seller may not cancel the contract until it notifies the buyer.

The buyer must give notice of the action to the seller if a third party In an action by a third party against the buyer that is based on the seller's breach of warranty, the buyer must give notice of the action to the seller.

If a seller elects to resell the goods remaining in the seller's possession after the buyer breaks the contract, the seller:

The Nature and Sources of Law

The Court System and Dispute Resolution

Business Ethics, Social Forces, and the Law

The Constitution As the Foundation of the Legal Environment

Government Regulation of Competition and Prices

Administrative Agencies

Crimes

Torts

Intellectual Property Rights and the Internet

The Legal Environment of International Trade

Nature and Classes of Contracts: Contracting on the Internet

Formation of Contracts: Offer and Acceptance

Capacity and Genuine Assent

Consideration

Legality and Public Policy

Writing, Electronic Forms, and Interpretation of Contracts

Third Persons and Contracts

Discharge of Contracts

Breach of Contract and Remedies

Personal Property and Bailments

Legal Aspects of Supply Chain Management

Nature and Form of Sales

Title and Risk of Loss

Product Liability: Warranties and Torts

Obligations and Performance

Kinds of Negotiable Instruments and Negotiability

Transfers of Negotiable Instruments and Warranties of Parties

Liability of the Parties Under Negotiable Instruments

Checks and Funds Transfers

Nature of the Debtor Creditor Relationship

Consumer Protection

Secured Transactions in Personal Property

Bankruptcy

Insurance

Agency

Third Persons in Agency

Regulation of Employment

Equal Employment Opportunity Law

Types of Business Organizations

Partnerships

LPs, LLCs, and LLPs

Corporate Formation

Shareholder Rights in Corporations

Securities Regulation

Accountants Liability and Malpractice

Management of Corporations

Real Property

Environmental Law and Land Use Controls

Leases

Decedents Estates and Trusts

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