Exam 23: Sales Remedies

The fair market value of a 10-foot fishing boat is $1,000.In a special promotion, J's Marina purchases a 10-foot fishing boat for $900.The boat is badly scratched when it arrives.J's Marina, however, accepts the shipment and notifies the seller of the defect.The boat as delivered has a value of $800.If the damaged boat is a breach of warranty by the seller, the buyer may recover from the seller:

MATCHING Part IV Matching Match each statement with the correct term below.a.A sequence of previous conduct between parties establishing a basis for interpreting their agreement.b.A practice or method of dealing regularly observed and followed in a place, vocation, or trade.c.The transfer of a major part of one's inventory not in the ordinary course of business.d.A contract in which the risk of loss remains with the seller until the buyer "approves" or accepts the goods.e.A contract in which the seller bears the risk of loss and expense until the goods are delivered to the carrier for shipment.f.Transfer of right to possession and use of goods for a term in return for consideration.g.A contract to hold open an offer.h.An offer in writing by a merchant that gives assurance it will be kept open for a period of time up to three months.i.A contract in which goods are sold and delivered to the buyer with an option to return them to the seller; the risk of loss is on the buyer until she returns the goods.j.Delivery term for a shipment contract, free on board.k.The obligation of the seller to convey the right to ownership without a lien.l.A doctrine determining who in the chain of distribution is liable for a breach of warranty.m.Limits the time period for which a manufacturer is liable for injury caused by its defective product.n.Historically, a contractual relationship between the plaintiff and the defendant that was necessary at common law to maintain a lawsuit.o.An affirmation of fact or promise about the goods or a description, including a sample of the goods, which becomes part of the basis of the bargain.p.A contract in which the seller is required to tender delivery of the goods at a particular destination; title passes to the buyer on tender of the goods at that destination.q.A negation of a warranty.r.Designation of specific goods as goods to which the contract of sale refers.s.A person who is a dealer in the goods, or who by his occupation holds himself out as having knowledge or skill peculiar to the goods or practices involved, or who employs an agent or broker whom he holds out as having such knowledge or skill.t.Honesty in fact in the conduct or transaction concerned. -merchant

MATCHING Part IV Matching Match each statement with the correct term below.a.A sequence of previous conduct between parties establishing a basis for interpreting their agreement.b.A practice or method of dealing regularly observed and followed in a place, vocation, or trade.c.The transfer of a major part of one's inventory not in the ordinary course of business.d.A contract in which the risk of loss remains with the seller until the buyer "approves" or accepts the goods.e.A contract in which the seller bears the risk of loss and expense until the goods are delivered to the carrier for shipment.f.Transfer of right to possession and use of goods for a term in return for consideration.g.A contract to hold open an offer.h.An offer in writing by a merchant that gives assurance it will be kept open for a period of time up to three months.i.A contract in which goods are sold and delivered to the buyer with an option to return them to the seller; the risk of loss is on the buyer until she returns the goods.j.Delivery term for a shipment contract, free on board.k.The obligation of the seller to convey the right to ownership without a lien.l.A doctrine determining who in the chain of distribution is liable for a breach of warranty.m.Limits the time period for which a manufacturer is liable for injury caused by its defective product.n.Historically, a contractual relationship between the plaintiff and the defendant that was necessary at common law to maintain a lawsuit.o.An affirmation of fact or promise about the goods or a description, including a sample of the goods, which becomes part of the basis of the bargain.p.A contract in which the seller is required to tender delivery of the goods at a particular destination; title passes to the buyer on tender of the goods at that destination.q.A negation of a warranty.r.Designation of specific goods as goods to which the contract of sale refers.s.A person who is a dealer in the goods, or who by his occupation holds himself out as having knowledge or skill peculiar to the goods or practices involved, or who employs an agent or broker whom he holds out as having such knowledge or skill.t.Honesty in fact in the conduct or transaction concerned. -FOB place of shipment

Perry is building his house and orders a hot water heater from Jones Co.to be installed by them.The hot water heater they sent has a 45-gallon capacity, but Perry had ordered a 60-gallon capacity.Jones cannot provide a 60-gallon heater for two months, so Perry cancels the contract and gets a heater from another company.Jones Co.says it must be allowed to install the heater.What result?

Under what circumstances may the buyer seek the remedy of replevin?

If the seller has the right to cancel, he may recover damages for breach without having to tender any further performance.

A buyer's incidental damages include reasonable expenses or commissions in effecting cover.

Rachel agrees to sell Bill goods for $2,000.The value of the goods accepted is $1,500.If the goods had been as warranted, their value would have been $2,600.What are the buyer's damages for breach of warranty?

Which of the following remedies are mutually exclusive and could not be obtained simultaneously?

Demrow Co., which contracted to buy 400 fishing poles from Royal Industries, anticipatorily breached the contract.Royal may proceed to identify to the contract conforming goods in its possession so that it can exercise the remedy of resale of the goods.

Under the CISG, if the buyer fails to perform any obligations, the seller may either require the buyer to pay the price or fix an additional period of time for the buyer to perform.

The contract between the buyer and the seller cannot provide for any additional remedies other than those specified in the Code.

Match each statement with the correct term below.a.Unfairness in the bargaining process.b.An action at law to recover specific goods in the possession of a defendant that are being unlawfully withheld from the plaintiff.c.An amount specified by the parties that is recoverable in the event of a breach.d.A seller makes available to a buyer goods conforming to the contract and so notifies the buyer.e.The inability of a person to pay his debts in the ordinary course of business or as they become due.f.Total liabilities exceeding the total value of all assets.g.Commercially reasonable expenses directly resulting from a breach.h.Expenses resulting from the buyer's requirements of which the seller had reason to know at the time of contracting; also injury to person or property resulting from breach of warranty.i.A buyer's purchase of goods in substitution for those not delivered by a breaching seller.j.Oppressive or grossly unfair contractual provisions.k.Clear indication before performance is due of an unwillingness or inability to perform contractual duties.l.The right of a seller under the Code to correct a nonconforming delivery of goods to the buyer.m.The manifestation by a buyer of unwillingness to become the owner of the goods.n.Interest in personal property or fixtures ensuring payment or performance of an obligation. -equity insolvency

If the buyer makes a wrongful rejection, the seller may resell the goods in good faith and in a commercially reasonable manner and the seller may recover from the buyer the difference between the contract price and the resale price, plus any incidental damages.

MATCHING Part IV Matching Match each statement with the correct term below.a.A sequence of previous conduct between parties establishing a basis for interpreting their agreement.b.A practice or method of dealing regularly observed and followed in a place, vocation, or trade.c.The transfer of a major part of one's inventory not in the ordinary course of business.d.A contract in which the risk of loss remains with the seller until the buyer "approves" or accepts the goods.e.A contract in which the seller bears the risk of loss and expense until the goods are delivered to the carrier for shipment.f.Transfer of right to possession and use of goods for a term in return for consideration.g.A contract to hold open an offer.h.An offer in writing by a merchant that gives assurance it will be kept open for a period of time up to three months.i.A contract in which goods are sold and delivered to the buyer with an option to return them to the seller; the risk of loss is on the buyer until she returns the goods.j.Delivery term for a shipment contract, free on board.k.The obligation of the seller to convey the right to ownership without a lien.l.A doctrine determining who in the chain of distribution is liable for a breach of warranty.m.Limits the time period for which a manufacturer is liable for injury caused by its defective product.n.Historically, a contractual relationship between the plaintiff and the defendant that was necessary at common law to maintain a lawsuit.o.An affirmation of fact or promise about the goods or a description, including a sample of the goods, which becomes part of the basis of the bargain.p.A contract in which the seller is required to tender delivery of the goods at a particular destination; title passes to the buyer on tender of the goods at that destination.q.A negation of a warranty.r.Designation of specific goods as goods to which the contract of sale refers.s.A person who is a dealer in the goods, or who by his occupation holds himself out as having knowledge or skill peculiar to the goods or practices involved, or who employs an agent or broker whom he holds out as having such knowledge or skill.t.Honesty in fact in the conduct or transaction concerned. -shipment contract

The amount of liquidated damages included in a contract that would be upheld by a court:

Article 2A authorizes liquidated damages payable by either party for default or any other act or omission expressed in the contract.

Which of the following would not be a remedy available to the seller on account of buyer's breach?

Match each statement with the correct term below.a.Unfairness in the bargaining process.b.An action at law to recover specific goods in the possession of a defendant that are being unlawfully withheld from the plaintiff.c.An amount specified by the parties that is recoverable in the event of a breach.d.A seller makes available to a buyer goods conforming to the contract and so notifies the buyer.e.The inability of a person to pay his debts in the ordinary course of business or as they become due.f.Total liabilities exceeding the total value of all assets.g.Commercially reasonable expenses directly resulting from a breach.h.Expenses resulting from the buyer's requirements of which the seller had reason to know at the time of contracting; also injury to person or property resulting from breach of warranty.i.A buyer's purchase of goods in substitution for those not delivered by a breaching seller.j.Oppressive or grossly unfair contractual provisions.k.Clear indication before performance is due of an unwillingness or inability to perform contractual duties.l.The right of a seller under the Code to correct a nonconforming delivery of goods to the buyer.m.The manifestation by a buyer of unwillingness to become the owner of the goods.n.Interest in personal property or fixtures ensuring payment or performance of an obligation. -cure

One hundred crystal flower vases have been identified to the contract and a down payment of $1,000 of the $10,000 purchase price has been paid.If the seller becomes insolvent, the buyer may still pay $9,000 and get the goods.