Question 1

If the seller refuses to deliver the goods called for by the contract, the buyer can:

Accepted Answer

A)  get the difference between the contract price of the goods and their market price at the time the buyer learns of the seller's breach. 
B)  sue for only consequential damages, and if he fails, get a percentage of the difference between contract price and market price. 
C)  avoid giving the seller any credit for expenses saved. 
D)  seek specific performance even if the goods ordered are not unique in nature. 
A)  get the difference between the contract price of the goods and their market price at the time the buyer learns of the seller's breach. 
B)  sue for only consequential damages, and if he fails, get a percentage of the difference between contract price and market price. 
C)  avoid giving the seller any credit for expenses saved. 
D)  seek specific performance even if the goods ordered are not unique in nature. A

Question 2

A buyer is _____ if he cannot pay his bills when they become due.

Accepted Answer

A)  unconscionable 
B)  liquidated 
C)  unaccountable 
D)  insolvent 
A)  unconscionable 
B)  liquidated 
C)  unaccountable 
D)  insolvent D

Question 3

Which of the following results from a breach of contract and may be limited or excluded by an agreement?

Accepted Answer

A)  Liquidated damages 
B)  Registration default 
C)  Consequential damages 
D)  Specific performance 
A)  Liquidated damages 
B)  Registration default 
C)  Consequential damages 
D)  Specific performance C

Question 4

In which of the following ways can a seller breach a contract?

Accepted Answer

A)  By selling the goods to the buyer at a price higher than the market value 
B)  By delivering goods that do not conform to the contract 
C)  By repudiating a contract because the buyer is insolvent 
D)  By indicating an intention to fulfill the obligations under the contract sooner than agreed 
A)  By selling the goods to the buyer at a price higher than the market value 
B)  By delivering goods that do not conform to the contract 
C)  By repudiating a contract because the buyer is insolvent 
D)  By indicating an intention to fulfill the obligations under the contract sooner than agreed

Question 5

Jim makes a contract with Oleta to sell her a 1965 lava lamp once owned by a famous artist. Jim later decides that he does not want to sell the lamp to Oleta. In this scenario, Oleta:

Accepted Answer

A)  cannot get any remedy because the lamp is not a generic product. 
B)  can claim exemplary damages. 
C)  can require Jim to specifically perform the contract. 
D)  can sue Jim for an unfair and deceptive trade practice. 
A)  cannot get any remedy because the lamp is not a generic product. 
B)  can claim exemplary damages. 
C)  can require Jim to specifically perform the contract. 
D)  can sue Jim for an unfair and deceptive trade practice.

Question 6

When a buyer breaches a contract, the seller:

Accepted Answer

A)  must deliver the goods to the buyer anyway. 
B)  need not give any credit to the buyer for any expenses the seller saved. 
C)  may resell the goods covered by the contract. 
D)  cannot reclaim goods in the possession of an insolvent buyer. 
A)  must deliver the goods to the buyer anyway. 
B)  need not give any credit to the buyer for any expenses the seller saved. 
C)  may resell the goods covered by the contract. 
D)  cannot reclaim goods in the possession of an insolvent buyer.

Question 7

An agreement for liquidated damages is enforced if the amount is reasonable and if actual damages would be difficult to prove in the event of breach of the contract.

Accepted Answer

A) True 
 B)False

Question 8

A seller may resell the goods when:

Accepted Answer

A)  the buyer breaches the contract, and the seller has possession of the goods. 
B)  the seller breaches the contract, and the buyer has possession of the goods. 
C)  neither party breaches the contract, but the seller can make a higher profit upon resale to another buyer. 
D)  the seller is sure that the buyer is going to breach the contract. 
A)  the buyer breaches the contract, and the seller has possession of the goods. 
B)  the seller breaches the contract, and the buyer has possession of the goods. 
C)  neither party breaches the contract, but the seller can make a higher profit upon resale to another buyer. 
D)  the seller is sure that the buyer is going to breach the contract.

Question 9

Under the Uniform Commercial Code (UCC), a lawsuit for breach of a sales contract must be filed:

Accepted Answer

A)  as soon as the breach is detected. 
B)  within a year after the breach is detected. 
C)  within ten years after the breach occurs. 
D)  within four years after the breach occurs. 
A)  as soon as the breach is detected. 
B)  within a year after the breach is detected. 
C)  within ten years after the breach occurs. 
D)  within four years after the breach occurs.

Question 10

Amir bought a television set from Corbel Electronics for $250. Corbel Electronics delivered a warranty of six years for any manufacturing defect in the product. After three years of use, the television set caught fire because of a manufacturing defect. The fire also damaged other goods in Amir's house. Which of the following statements is most accurate regarding this scenario?

Accepted Answer

A)  Amir cannot recover damages for personal injuries under the warranty from Corbel Electronics. 
B)  Amir cannot recover damages for loss in value of the television set. 
C)  Amir can claim consequential damages for a breach of warranty resulting in injury to the property. 
D)  Amir's right to recover damages is barred by the Uniform Commercial Code's statute of limitations. 
A)  Amir cannot recover damages for personal injuries under the warranty from Corbel Electronics. 
B)  Amir cannot recover damages for loss in value of the television set. 
C)  Amir can claim consequential damages for a breach of warranty resulting in injury to the property. 
D)  Amir's right to recover damages is barred by the Uniform Commercial Code's statute of limitations.

Question 11

If a seller discovers a buyer is insolvent, the seller must continue to ship contracted-for goods to the buyer until the bankruptcy court issues a formal declaration of insolvency.

Accepted Answer

A) True 
 B)False

Question 12

If the future performance of a product is covered by its warranty, then a breach occurs:

Accepted Answer

A)  at the time the buyer should have discovered the defect in the product. 
B)  one year after the defect in the product is discovered by the buyer. 
C)  when the buyer complains to the manufacturer about a defect in the product. 
D)  when the purchase is marked as complete, and the product is delivered to the buyer. 
A)  at the time the buyer should have discovered the defect in the product. 
B)  one year after the defect in the product is discovered by the buyer. 
C)  when the buyer complains to the manufacturer about a defect in the product. 
D)  when the purchase is marked as complete, and the product is delivered to the buyer.

Question 13

The objective of the various remedies for breach of contract is to put the injured person in the same position as if the contract had been performed.

Accepted Answer

A) True 
 B)False

Question 14

If a seller discovers a buyer is insolvent, the seller:

Accepted Answer

A)  must wait 10 days before taking action. 
B)  has the right to stop delivery of any goods that are being shipped to the buyer. 
C)  has to go ahead with the shipment anyway because doing otherwise would disrupt the purchase contract. 
D)  must wait seven days before taking any action. 
A)  must wait 10 days before taking action. 
B)  has the right to stop delivery of any goods that are being shipped to the buyer. 
C)  has to go ahead with the shipment anyway because doing otherwise would disrupt the purchase contract. 
D)  must wait seven days before taking any action.

Question 15

Monroe Hardware contracted to purchase 20 alarm clocks from Clocks Inc., a clock manufacturer. One week before delivery, Monroe Hardware notified Clocks Inc. that it was canceling its contract because it (Monroe Hardware) was overstocked with clocks. Which of the following is a remedy available to Clocks Inc. in this scenario?

Accepted Answer

A)  Clocks Inc. must attempt to resell the clocks to another buyer before it can recover damages from Monroe. 
B)  Clocks Inc. must attempt delivery of the goods before it can sue Monroe for damages. 
C)  Clocks Inc. may recover the difference between the contract price of the clocks and the current market price of the clocks. 
D)  Clocks Inc. can recover the purchase price from Monroe even if resale is possible. 
A)  Clocks Inc. must attempt to resell the clocks to another buyer before it can recover damages from Monroe. 
B)  Clocks Inc. must attempt delivery of the goods before it can sue Monroe for damages. 
C)  Clocks Inc. may recover the difference between the contract price of the clocks and the current market price of the clocks. 
D)  Clocks Inc. can recover the purchase price from Monroe even if resale is possible.

Question 16

Buyers are entitled to specific performance of a contract if the goods covered by the contract are unique.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is true of damages incurred by the seller when a buyer repudiates a contract?

Accepted Answer

A)  The buyer is not liable for the difference between the contract price and the market price at which the goods are currently selling. 
B)  The only way the seller can recover damages is by reselling the goods. 
C)  The seller can only recover incidental damages and not the lost revenue. 
D)  The seller can recover lost profit and overheads along with incidental expenses. 
A)  The buyer is not liable for the difference between the contract price and the market price at which the goods are currently selling. 
B)  The only way the seller can recover damages is by reselling the goods. 
C)  The seller can only recover incidental damages and not the lost revenue. 
D)  The seller can recover lost profit and overheads along with incidental expenses.

Question 18

After a breach of contract by a buyer, if a seller auctions the goods and makes a profit, he is not liable to give the profit to the buyer.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is a correct statement regarding the statute of limitations period recognized by the Uniform Commercial Code (UCC) for a breach of sales contract lawsuit?

Accepted Answer

A)  The parties to a contract for the sale of goods may not shorten the statute of limitations period. 
B)  The parties to a contract for the sale of goods may shorten the statute of limitations period to one year. 
C)  The parties to a contract for the sale of goods may extend the statute of limitations beyond the time period recognized by the UCC. 
D)  There is no statute of limitations period for a lawsuit for breach of a contract for the sale of goods. 
A)  The parties to a contract for the sale of goods may not shorten the statute of limitations period. 
B)  The parties to a contract for the sale of goods may shorten the statute of limitations period to one year. 
C)  The parties to a contract for the sale of goods may extend the statute of limitations beyond the time period recognized by the UCC. 
D)  There is no statute of limitations period for a lawsuit for breach of a contract for the sale of goods.

Question 20

Which of the following holds true of the seller's entitlement on the recovery of purchase price of goods?

Accepted Answer

A)  The seller is not entitled to the purchase price of all goods accepted by the buyer. 
B)  The seller cannot recover the purchase price of goods damaged after the buyer assumed the risk for their loss. 
C)  Even if the seller successfully resells the goods, he can claim recovery of the purchase price from the buyer. 
D)  If the seller resells goods to another buyer, the seller must give the first buyer due credit for the proceeds of the resale. 
A)  The seller is not entitled to the purchase price of all goods accepted by the buyer. 
B)  The seller cannot recover the purchase price of goods damaged after the buyer assumed the risk for their loss. 
C)  Even if the seller successfully resells the goods, he can claim recovery of the purchase price from the buyer. 
D)  If the seller resells goods to another buyer, the seller must give the first buyer due credit for the proceeds of the resale.

Exam 22: Remedies for Breach of Sales Contracts

If the seller refuses to deliver the goods called for by the contract, the buyer can:

A buyer is _____ if he cannot pay his bills when they become due.

Which of the following results from a breach of contract and may be limited or excluded by an agreement?

In which of the following ways can a seller breach a contract?

Jim makes a contract with Oleta to sell her a 1965 lava lamp once owned by a famous artist. Jim later decides that he does not want to sell the lamp to Oleta. In this scenario, Oleta:

When a buyer breaches a contract, the seller:

An agreement for liquidated damages is enforced if the amount is reasonable and if actual damages would be difficult to prove in the event of breach of the contract.

A seller may resell the goods when:

Under the Uniform Commercial Code (UCC), a lawsuit for breach of a sales contract must be filed:

If a seller discovers a buyer is insolvent, the seller must continue to ship contracted-for goods to the buyer until the bankruptcy court issues a formal declaration of insolvency.

If the future performance of a product is covered by its warranty, then a breach occurs:

The objective of the various remedies for breach of contract is to put the injured person in the same position as if the contract had been performed.

If a seller discovers a buyer is insolvent, the seller:

Buyers are entitled to specific performance of a contract if the goods covered by the contract are unique.

Which of the following is true of damages incurred by the seller when a buyer repudiates a contract?

After a breach of contract by a buyer, if a seller auctions the goods and makes a profit, he is not liable to give the profit to the buyer.

Which of the following is a correct statement regarding the statute of limitations period recognized by the Uniform Commercial Code (UCC) for a breach of sales contract lawsuit?

Which of the following holds true of the seller's entitlement on the recovery of purchase price of goods?

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