Question 1

If the seller discovers that the buyer is insolvent,he has:

Accepted Answer

A) no right to stop the delivery of any goods that he has shipped to the buyer. 
B) the right to stop the delivery of any goods that he has shipped to the buyer. 
C) the right to ask the buyer to pay double compensation. 
D) no right to do anything against the buyer. 
A) no right to stop the delivery of any goods that he has shipped to the buyer. 
B) the right to stop the delivery of any goods that he has shipped to the buyer. 
C) the right to ask the buyer to pay double compensation. 
D) no right to do anything against the buyer.

Question 2

S agrees to specially manufacture a machine for B.After S finishes the job,B breaches the contract.Knowing that there is no market for the machine,S does not try to resell it.Instead,S sues B for the price of the machine.Which of the following is true? Assume that there truly was no market for the machine.

Accepted Answer

A) S can recover only the input price invested in making the machine. 
B) No recovery,because S was obligated to make an effort to resell the partially completed machine for scrap. 
C) No recovery,because S was obligated to sue B for his lost profit on the deal. 
D) S can recover the price of the machine from B. 
A) S can recover only the input price invested in making the machine. 
B) No recovery,because S was obligated to make an effort to resell the partially completed machine for scrap. 
C) No recovery,because S was obligated to sue B for his lost profit on the deal. 
D) S can recover the price of the machine from B.

Question 3

In which of the following transactions is the buyer most unlikely to be entitled to specific performance of the contract?

Accepted Answer

A) A contract for the purchase of a historical artifact 
B) A contract for the purchase of 10,000 tons of wheat 
C) A contract for the purchase of a Rembrandt painting 
D) A contract for the purchase of a 1910 Ford 
A) A contract for the purchase of a historical artifact 
B) A contract for the purchase of 10,000 tons of wheat 
C) A contract for the purchase of a Rembrandt painting 
D) A contract for the purchase of a 1910 Ford

Question 4

Which of the following statements about a buyer's damages for defective goods is false?

Accepted Answer

A) The buyer must give the seller notice of the defect within a reasonable amount of time after the buyer discovers the defect. 
B) The buyer can recover the difference between the value of the goods received and the value of the goods in the industry. 
C) The buyer can only recover damages if he gave proper notice. 
D) The buyer may recover incidental and consequential damages. 
A) The buyer must give the seller notice of the defect within a reasonable amount of time after the buyer discovers the defect. 
B) The buyer can recover the difference between the value of the goods received and the value of the goods in the industry. 
C) The buyer can only recover damages if he gave proper notice. 
D) The buyer may recover incidental and consequential damages.

Question 5

Consequential damages do not include an injury to a person or property caused by a breach of warranty.

Accepted Answer

A) True 
 B)False

Question 6

If a seller who learns of the buyer's breach decides to stop manufacturing the goods,she must:

Accepted Answer

A) sell the goods for their scrap or salvage value. 
B) hold on to the goods for 14 days just in case the buyer changes his mind. 
C) finish the manufacturing of the goods to prevent waste. 
D) try to find a replacement buyer for the finished goods. 
A) sell the goods for their scrap or salvage value. 
B) hold on to the goods for 14 days just in case the buyer changes his mind. 
C) finish the manufacturing of the goods to prevent waste. 
D) try to find a replacement buyer for the finished goods.

Question 7

Cahaba Disaster Recovery v.Rogers,the case in the text,demonstrates the requirement that a buyer notify a seller of defective goods within ________ after he discovers the defect.

Accepted Answer

A) 14 days 
B) 48 hours 
C) a reasonable time 
D) 7 days. 
A) 14 days 
B) 48 hours 
C) a reasonable time 
D) 7 days.

Question 8

Under UCC section 2-712,the buyer is required to seek cover during a breach of contract dispute.

Accepted Answer

A) True 
 B)False

Question 9

Edna Boyle contracts with The Melonville Times to advertise her garage sale to be held this Saturday.The ad is to run in the Friday and Saturday morning edition.If the ad does not run on time,The Melonville Times agrees to pay Edna $50.This liquidated damages clause is most likely enforceable.

Accepted Answer

A) True 
 B)False

Question 10

If a seller fails to deliver goods called for in the contract,the buyer may purchase substitute goods and recover as damages the difference between the contract price and the cost of the substituted goods.This is known as:

Accepted Answer

A) cover. 
B) action for the price. 
C) specific performance. 
D) incidental damages. 
A) cover. 
B) action for the price. 
C) specific performance. 
D) incidental damages.

Question 11

If the parties agree on a reasonable amount of damages that will be paid to the injured party,this amount is known as ________.

Accepted Answer

A) liquidated damages 
B) unconscionable damages 
C) punitive damages 
D) unenforceable damages 
A) liquidated damages 
B) unconscionable damages 
C) punitive damages 
D) unenforceable damages

Question 12

If the seller has justifiably withheld delivery of the goods because of the buyer's breach,the buyer may:

Accepted Answer

A) not recover any money or goods he has delivered to the seller. 
B) not recover the goods. 
C) recover only goods that he has not delivered. 
D) recover any money or goods he has delivered to the seller over and above the agreed amount of liquidated damages. 
A) not recover any money or goods he has delivered to the seller. 
B) not recover the goods. 
C) recover only goods that he has not delivered. 
D) recover any money or goods he has delivered to the seller over and above the agreed amount of liquidated damages.

Question 13

Ralf breaches a contract with Smith whereby Smith agreed to make Ralf 1,000 sport goggles in exchange for $2,000.Smith decided to resell them to diminish his losses.Luckily,there was a huge market for sports goggles and he collected a huge profit.The amount was far more than the contracted price with Ralf.However,now Ralf is demanding a share of the profit.Will Ralf succeed?

Accepted Answer

No,Ralf will not succeed.When

Question 14

Which of the following is an example of a consequential damage?

Accepted Answer

A) An expense that a buyer incurs in receiving and inspecting goods shipped by the seller that do not conform to those called for in the contract 
B)   A charge that the buyer has to pay in obtaining substitute goods 
C) An injury to a person caused by a breach of warranty 
D) An expense that a buyer incurs in storing nonconforming goods shipped by the seller 
A) An expense that a buyer incurs in receiving and inspecting goods shipped by the seller that do not conform to those called for in the contract 
B)   A charge that the buyer has to pay in obtaining substitute goods 
C) An injury to a person caused by a breach of warranty 
D) An expense that a buyer incurs in storing nonconforming goods shipped by the seller

Question 15

________ include any reasonable expenses or charges that the buyer has to pay in obtaining substitute goods in case of a breach of contract on the part of the seller.

Accepted Answer

A) Incidental damages 
B) Unconscionable damages 
C) Punitive damages 
D) Consequential damages 
A) Incidental damages 
B) Unconscionable damages 
C) Punitive damages 
D) Consequential damages

Question 16

Explain the concept of a buyer's right to cover.

Accepted Answer

If the seller fails or refuses to delive

Question 17

The UCC provides that a lawsuit for breach of a sales contract must be filed within a year after the breach occurs.

Accepted Answer

A) True 
 B)False

Question 18

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 $1.10 per widget in a public sale.S also saved $200 in shipping costs.What amount does S owe B?

Accepted Answer

A) $1,200 
B) $1,300 
C) $1,000 
D) Nothing 
A) $1,200 
B) $1,300 
C) $1,000 
D) Nothing

Question 19

If goods from a breached contract are resold at a private sale,the seller must:

Accepted Answer

A) give the buyer 7 days' notice of its intention to resell the goods. 
B) hold the sale at a usual place or market for private sales if one is reasonably available. 
C) give the buyer notice of the time and place of the resale. 
D) give the buyer reasonable notification of his intention to resell the goods. 
A) give the buyer 7 days' notice of its intention to resell the goods. 
B) hold the sale at a usual place or market for private sales if one is reasonably available. 
C) give the buyer notice of the time and place of the resale. 
D) give the buyer reasonable notification of his intention to resell the goods.

Question 20

When deciding what to do with the unfinished goods after a buyer breaches a contract,the seller must follow a reasonable course of action to ________ her damages.

Accepted Answer

A) mitigate 
B) realize 
C) maximize 
D) actualize 
A) mitigate 
B) realize 
C) maximize 
D) actualize

Exam 22: Remedies for Breach of Sales Contracts

If the seller discovers that the buyer is insolvent,he has:

In which of the following transactions is the buyer most unlikely to be entitled to specific performance of the contract?

Which of the following statements about a buyer's damages for defective goods is false?

Consequential damages do not include an injury to a person or property caused by a breach of warranty.

If a seller who learns of the buyer's breach decides to stop manufacturing the goods,she must:

Cahaba Disaster Recovery v.Rogers,the case in the text,demonstrates the requirement that a buyer notify a seller of defective goods within ________ after he discovers the defect.

Under UCC section 2-712,the buyer is required to seek cover during a breach of contract dispute.

Edna Boyle contracts with The Melonville Times to advertise her garage sale to be held this Saturday.The ad is to run in the Friday and Saturday morning edition.If the ad does not run on time,The Melonville Times agrees to pay Edna $50.This liquidated damages clause is most likely enforceable.

If a seller fails to deliver goods called for in the contract,the buyer may purchase substitute goods and recover as damages the difference between the contract price and the cost of the substituted goods.This is known as:

If the parties agree on a reasonable amount of damages that will be paid to the injured party,this amount is known as ________.

If the seller has justifiably withheld delivery of the goods because of the buyer's breach,the buyer may:

Which of the following is an example of a consequential damage?

________ include any reasonable expenses or charges that the buyer has to pay in obtaining substitute goods in case of a breach of contract on the part of the seller.

Explain the concept of a buyer's right to cover.

The UCC provides that a lawsuit for breach of a sales contract must be filed within a year after the breach occurs.

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 $1.10 per widget in a public sale.S also saved $200 in shipping costs.What amount does S owe B?

If goods from a breached contract are resold at a private sale,the seller must:

When deciding what to do with the unfinished goods after a buyer breaches a contract,the seller must follow a reasonable course of action to ________ her 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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