Question 1

Which of the following means that the buyer can require the seller to give the buyer the exact goods covered by the contract?

Accepted Answer

A) Specific performance 
B) Trade usage 
C) Implicit guarantee 
D) Trade warranty 
A) Specific performance 
B) Trade usage 
C) Implicit guarantee 
D) Trade warranty

Question 2

"Tool For You" (TFY)is a company that sells power tools to consumers.The sales contract of TFY states that it will not be liable for any consequential damages that the consumer suffers as a result of using power tools purchased from them.Harry purchased a table saw from TFY for use in his hobby of woodworking.Harry was injured when the saw blade flew off.He wants to sue TFY but is not sure whether the contract provision limiting consequential damages will be enforced and seeks your opinion.Will TFY prevail?

Accepted Answer

A) No,because this was a sale of a potentially dangerous product. 
B) No,because Harry is a consumer. 
C) Yes,because Harry agreed to this provision in the contract of sale. 
D) Yes,because the UCC allows parties to agree to limitations on damages. 
A) No,because this was a sale of a potentially dangerous product. 
B) No,because Harry is a consumer. 
C) Yes,because Harry agreed to this provision in the contract of sale. 
D) Yes,because the UCC allows parties to agree to limitations on damages.

Question 3

Which of the following is a condition necessary for a liquidated damages agreement to be enforced?

Accepted Answer

A) If actual damages would be difficult to prove in the event of a breach of the contract 
B) If the amount is large enough to be considered penal 
C) If the amount is considered unconscionable 
D) If there is no breach of the contract agreed upon by both parties 
A) If actual damages would be difficult to prove in the event of a breach of the contract 
B) If the amount is large enough to be considered penal 
C) If the amount is considered unconscionable 
D) If there is no breach of the contract agreed upon by both parties

Question 4

On May 1,1999,S contracts to sell B a toaster that it warrants for five years.On May 5,1999,S delivers the toaster to B.The toaster self-destructs on April 30,2000,but B does not discover this until May 3,2000.However,B does not sue S until May of 2003.Has B sued within the time period permitted by UCC statute of limitations? Why or why not?

Accepted Answer

Yes,B has complied with UCC statute of l

Question 5

In the eventuality of nondelivery by the seller,which of the following would be reduced from the amount of damages claimed from the seller?

Accepted Answer

A) The difference between the contract price of the goods and their market price at the time he learns of the seller's breach 
B) Incidental damages 
C) Expenses saved 
D) Consequential damages 
A) The difference between the contract price of the goods and their market price at the time he learns of the seller's breach 
B) Incidental damages 
C) Expenses saved 
D) Consequential damages

Question 6

Under the UCC,an injured party in a contract dispute cannot recover punitive damages.

Accepted Answer

A) True 
 B)False

Question 7

The seller is obligated to resell the goods in cases where the buyer refuses to accept goods that conform to the contract.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is true of the period during which parties can file a lawsuit for breach of a sales contract?

Accepted Answer

A) The parties can extend it for a period longer than six years after the breach occurs. 
B) The parties to a contract may shorten this period to one year after the breach occurs. 
C) The parties are free to determine the period during which the lawsuit can be filed. 
D) The lawsuit must be filed within two years after the breach occurs. 
A) The parties can extend it for a period longer than six years after the breach occurs. 
B) The parties to a contract may shorten this period to one year after the breach occurs. 
C) The parties are free to determine the period during which the lawsuit can be filed. 
D) The lawsuit must be filed within two years after the breach occurs.

Question 9

Which section of the UCC governs statute of limitations in contract disputes?

Accepted Answer

A) 2-703 
B) 1-102 
C) 2-725 
D) 2-301 
A) 2-703 
B) 1-102 
C) 2-725 
D) 2-301

Question 10

S agrees to sell B 10,000 widgets at a price of $1 per widget.After B breaches the contract,S resells the widgets for $0.90 per widget.As a result of selling the widgets at a lower price,S loses $100 in sales commissions.S saved $200 in shipping costs as the new customer was located closer to its factory.What amount can S recover from B?

Accepted Answer

A) $900 
B) $100 
C) $1,100 
D) $1,000 
A) $900 
B) $100 
C) $1,100 
D) $1,000

Question 11

Which of the following is a common way in which a buyer may breach a contract?

Accepted Answer

A) By wrongfully returning goods 
B) By agreeing to an extension of the credit period 
C) By delivering a faulty product 
D) By refusing to accept goods which are obviously damaged 
A) By wrongfully returning goods 
B) By agreeing to an extension of the credit period 
C) By delivering a faulty product 
D) By refusing to accept goods which are obviously damaged

Question 12

Under the Convention on Contracts for the International Sale of Goods,________ is commonly utilized by buyers because the initial performance called for in contracts typically rests with the seller.

Accepted Answer

A) specific performance 
B) reclamation of goods 
C) suspension of performance 
D) avoidance of contract 
A) specific performance 
B) reclamation of goods 
C) suspension of performance 
D) avoidance of contract

Question 13

If the seller has justifiably withheld delivery of the goods because of the buyer's breach,the buyer may recover any money or goods he has delivered to the seller over and above the agreed amount of liquidated damages.

Accepted Answer

A) True 
 B)False

Question 14

Wonder Widgets agrees to sell Bill Buyer 10,000 of its "Grade A" widgets at a price of $3 per widget.After Wonder breaches the contract by failing to deliver,Bill buys substitute widgets at a price of $3.20 per widget.For this purchase,Bill incurs $200 in reasonable expenses and saves $100 in shipping expenses.Bill then sues Wonder for $2,200.What,if anything,can Bill actually recover?

Accepted Answer

A) Nothing 
B) $200 
C) $2,100 
D) $2,200 
A) Nothing 
B) $200 
C) $2,100 
D) $2,200

Question 15

In the case in the text,Beer v.Bennett,the trial court ordered Beer to hold the Fiat for Bennett until Bennett made shipping arrangements.On review,the court held that this requirement:

Accepted Answer

A) was proper under the UCC and Beer must hold the Fiat with reasonable care. 
B) was proper under the UCC and Beer was responsible for any additional expenses. 
C) was improper under the UCC because this placed an undue burden on Beer. 
D) was improper under the UCC because Beer was willing to make arrangements to send the Fiat to Bennett. 
A) was proper under the UCC and Beer must hold the Fiat with reasonable care. 
B) was proper under the UCC and Beer was responsible for any additional expenses. 
C) was improper under the UCC because this placed an undue burden on Beer. 
D) was improper under the UCC because Beer was willing to make arrangements to send the Fiat to Bennett.

Question 16

On May 1,S sells B 100 widgets on credit at a price of $1 per widget.S did so based on an April 10 letter from B asserting B's solvency.On May 7,B learns that S was insolvent when it received the widgets on May 1.On May 13,S demands the return of the goods from B.Is B obligated to return the goods to S?

Accepted Answer

Yes.Although S did not demand the goods

Question 17

What is the basic objective of the Code remedies for breach of contract?

Accepted Answer

A) To help the injured person recover consequential damages arising from the breach of contract. 
B) To put in place a mechanism that allows for repeat performance of the contract on modified terms. 
C) To help the injured person claim punitive damages arising from the breach of contract. 
D) To put the injured person in the same position that he would have been in if the contract had been performed. 
A) To help the injured person recover consequential damages arising from the breach of contract. 
B) To put in place a mechanism that allows for repeat performance of the contract on modified terms. 
C) To help the injured person claim punitive damages arising from the breach of contract. 
D) To put the injured person in the same position that he would have been in if the contract had been performed.

Question 18

A buyer is entitled to the remedy of specific performance when:

Accepted Answer

A) the contract is between merchants. 
B) the contract is for unique goods. 
C) the contract is for goods where the price is $500 or more. 
D) the contract requires delivery in installments. 
A) the contract is between merchants. 
B) the contract is for unique goods. 
C) the contract is for goods where the price is $500 or more. 
D) the contract requires delivery in installments.

Question 19

The buyer cannot recover any incidental damages.

Accepted Answer

A) True 
 B)False

Question 20

Ace Computers (AC)is a manufacturer.It entered into a contract with a retailer,Reliable Computer (RC)for the sale of 100 new XYZ model computers at $1,000 each,for delivery in six months.AC would thus make a profit of $50,000.Six months later however,the XYZ model has become almost relatively obsolete;its market price is only $600 at that time.RC refuses to accept or pay for those computers.If AC sues,how much should it be entitled to in damages? (Ignore any incidental expenses or cost savings to AC. )

Accepted Answer

A) Nothing;when the XYZ model became almost obsolete,this excused RC from the contract. 
B) $50,000,the profit AC would have made had RC not breached the contract. 
C) $40,000,the difference between market price and contract price. 
D) $90,000,the lost profit plus the difference between market price and contract price. 
A) Nothing;when the XYZ model became almost obsolete,this excused RC from the contract. 
B) $50,000,the profit AC would have made had RC not breached the contract. 
C) $40,000,the difference between market price and contract price. 
D) $90,000,the lost profit plus the difference between market price and contract price.

Exam 22: Remedies for Breach of Sales Contracts

Which of the following means that the buyer can require the seller to give the buyer the exact goods covered by the contract?

Which of the following is a condition necessary for a liquidated damages agreement to be enforced?

In the eventuality of nondelivery by the seller,which of the following would be reduced from the amount of damages claimed from the seller?

Under the UCC,an injured party in a contract dispute cannot recover punitive damages.

The seller is obligated to resell the goods in cases where the buyer refuses to accept goods that conform to the contract.

Which of the following is true of the period during which parties can file a lawsuit for breach of a sales contract?

Which section of the UCC governs statute of limitations in contract disputes?

Which of the following is a common way in which a buyer may breach a contract?

Under the Convention on Contracts for the International Sale of Goods,________ is commonly utilized by buyers because the initial performance called for in contracts typically rests with the seller.

If the seller has justifiably withheld delivery of the goods because of the buyer's breach,the buyer may recover any money or goods he has delivered to the seller over and above the agreed amount of liquidated damages.

In the case in the text,Beer v.Bennett,the trial court ordered Beer to hold the Fiat for Bennett until Bennett made shipping arrangements.On review,the court held that this requirement:

What is the basic objective of the Code remedies for breach of contract?

A buyer is entitled to the remedy of specific performance when:

The buyer cannot recover any incidental damages.

The Nature of Law

The Resolution of Private Disputes

Business and the Constitution

Business Ethics, Corporate Social Responsibility, Corporate Governance, and Critical Thinking

Criminal Law and Procedure

Intentional Torts

Negligence and Strict Liability

Intellectual Property and Unfair Competition

Introduction to Contracts

The Agreement: Offer

The Agreement: Acceptance

Consideration

Reality of Consent

Capacity to Contract

Illegality

Writing

Rights of Third Parties

Performance and Remedies

Formation and Terms of Sales Contracts

Product Liability

Performance of Sales Contracts

Personal Property and Bailments

Real Property

Landlord and Tenant

Estates and Trusts

Insurance Law

Introduction to Credit and Secured Transactions

Security Interests in Personal Property

Bankruptcy

Negotiable Instruments

Negotiation and Holder in Due Course

Liability of Parties

Checks and Electronic Transfers

The Agency Relationship

Third-Party Relations of the Principal and the Agent

Introduction to Forms of Business and Formation of Partnerships

Operation of Partnerships and Related Forms

Partners Dissociation and Partnerships Dissolution and Winding up

Limited Liability Companies, limited Partnerships, and Limited Liability Limited Partnerships

History and Nature of Corporations

Organization and Financial Structure of Corporations

Management of Corporations

Shareholders Rights and Liabilities

Securities Regulation

Legal and Professional Responsibilities of Auditors, Consultants, and Securities Professionals

Administrative Law

The Federal Trade Commission Act and Consumer Protection Laws

Antitrust: the Sherman Act

The Clayton Act, the Robinsonpatman Act, and Antitrust Exemptions and Immunities

Employment Law

Environmental Regulation

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