Question 1

"The sole warranty between the seller and buyer is the warranty set out in this contract." This written statement is an example of

Accepted Answer

A)  a condition of merchantability. 
B)  a statement of suitability. 
C)  a bill of lading. 
D)  a condition of fitness. 
E)  an exemption or disclaimer clause.

Question 2

The terms in a contract of sale relating to delivery are mainly concerned with the

Accepted Answer

A)  specific conditions of place, time, and quantity. 
B)  implied warranties concerning the physical condition and acceptance of goods. 
C)  specific warranties of quantity, time, and place. 
D)  implied conditions under the Sales of Goods Act. 
E)  physical condition of the goods.

Question 3

In any type of contract or quotation, goods stipulated as ready for delivery and clearly identifiable are

Accepted Answer

A)  C.I.F. (cost, insurance, freight). 
B)  ascertained goods. 
C)  C.O.D. (cash on delivery). 
D)  subject to the five rules of title transfer. 
E)  F.O.B. (free on board).

Question 4

Bill sells his motor vehicle to Jack for $2000. No mention is made about encumbrances registered against the vehicle. Jack discovers two weeks after the sale that the car is encumbered by a chattel mortgage to a financial institution with $1750 owing. What recourse does Jack have by virtue of the Sale of Goods Act and what remedy is he entitled to? If Bill did not own the vehicle when he sold it to Jack would your answer be different?

Accepted Answer

The answer of Bill sells his motor vehicle to Jack...

Question 5

Herman agreed to sell his entire model railway to Dixie Grant for $1700. Dixie signed an agreement which stated that the goods were available for pickup on September 1st and that she paid a deposit of $500. Dixie refused to pick up the goods on September 1st and Herman shortly thereafter sold the goods to a third party for $1,650. What right does Dixie have to the recovery of her deposit?

Accepted Answer

The answer of Herman agreed to sell his entire model...

Question 6

Which of the following is a remedy of the seller under the Sale of Goods Act?

Accepted Answer

A)  wrongful withholding or disposition 
B)  order bill of lading 
C)  chattel title 
D)  caveat emptor 
E)  resale

Question 7

John asks Peter to paint his home. Peter tells John he will need to purchase certain supplies including paint and brushes. The work that Peter will be doing, including the purchase of supplies is governed by the Sale of Goods Act.

Accepted Answer

A) True 
 B)False

Question 8

When a buyer relies on a catalogue and a sample in placing an order, the Sale of Goods Act implies:

Accepted Answer

A)  warranty of fitness. 
B)  condition of merchantability. 
C)  warranty of suitability. 
D)  condition that the goods will correspond with the description. 
E)  condition of fitness.

Question 9

Which of the following would be governed by the Sale of Goods Act?

Accepted Answer

A)  a contract to purchase and sell developed urban land 
B)  a contract for the repayment of a $2000 loan 
C)  a contract to paint a portrait of the children of a family 
D)  a contract for the sale of a horse 
E)  a contract for building a house

Question 10

Under contract of sale law, which of the following is NOT a remedy available to the seller?

Accepted Answer

A)  specific performance 
B)  retention of deposit 
C)  stop 
D)  resale 
E)  lien

Question 11

What is the difference between a contract for sale of goods and a consignment contract?

Accepted Answer

The answer of What is the difference between a contract...

Question 12

Describe four common law remedies a buyer may have against a seller of goods.

Accepted Answer

The answer of Describe four common law remedies a buyer...

Question 13

Lummi Wholesale ordered 16 cases of canned codfish from King Cannery Inc. Since Lummi's account with King Cannery was overdue, King wouldn't release the 16 cases of cod unless they received "cash in hand" at the pick- up. Does King Cannery have a right to demand payment before the customer picks up their order?

Accepted Answer

A)  Yes, because the contract didn't stipulate credit terms. 
B)  Yes, since the customer is perhaps insolvent. 
C)  No, because a lien is not permitted where title has passed to the buyer. 
D)  No, because the terms of credit have not expired. 
E)  No, because past experience has been on an open account basis.

Question 14

While in the shopping mall, Mabel special ordered a $29.95 video from VistaVideo. She was asked to place a $10 deposit on the order because it was "store policy". A little while later, before leaving the mall, Mabel changed her mind about ordering the video because "she needed the $10 for something else". VistaVideo refused to return the money. Is Mabel entitled to get the $10 back?

Accepted Answer

A)  No, since the $10 was a deposit. 
B)  Yes, because it is liquidated damages. 
C)  Yes, since as of yet no costs were accrued in ordering the video. 
D)  Yes, because the $10 was intended to be part payment. 
E)  No, because the $10 was not a genuine estimate of the probable loss resulting from a breach.

Question 15

Amanda sold goods at a flea market. She displayed her goods on a large table and marked the price with a label on each item. Dalton chose a piece of china from Amanda's table and paid her the labelled price of $59. Two days later he returned and demanded his money back based on the fact that the piece of china was not "Royal Crown" but "Crowne Royale". Does Amanda have to return his money? What principle of law governs in this case?

Accepted Answer

The answer of Amanda sold goods at a flea market....

Question 16

Colin had been having trouble with wild animals. He asked the salesman at Hardware Sales what kind of motion detection light would be best to install in his pump house. According to the Sale of Goods Act, Colin should expect a light that

Accepted Answer

A)  uses skill and labor for installation, therefore is not protected by the Act. 
B)  is reasonably fit for the purpose. 
C)  would not be restricted by the usual exemption clauses. 
D)  will need careful installation for the product to be warranteed. 
E)  meets his description.

Question 17

Donald visited the premises owned by Mary's Hay Farm Ltd. and viewed a stack of more than 4,000 bales of hay. He agreed to purchase 800 bales for $2.00 per bale. He paid the $1,600 and advised that he was going to get his truck and would return in about three hours. When Donald returned three hours later he noticed that there was a smoldering pile of debris where the stack of bales had previously been. The entire stack had been destroyed. Who is entitled to the $1,600? Give the legal basis for your answer. What additional fact do you need to know in order to confirm your answer?

Accepted Answer

The answer of Donald visited the premises owned by Mary's...

Question 18

Brent Cook owns and operates a farm supply store selling feed and hardware for the farm.
a. Mary Martin wants to buy a type of mink feed which must be ordered from Regina. Brent has a sample which he shows Mary. What rights does Mary have before she is bound to accept the feed when it arrives at Brent's store and under what circumstances can she reject the goods?
b. Donald Jones enters the store and buys 50 feet of marine rope used primarily by water skiers. The rope breaks while being used by Donald to raise bales of hay from a truck to the hay loft of Donald's barn. The bales fell onto the truck, damaging it and injuring Donald who is sitting in the cab. Donald sues Brent on the basis of breach of implied condition of fitness for the rope. What must Donald establish in order to be successful? What defences does Brent have? What is the likely outcome?

Accepted Answer

The answer of Brent Cook owns and operates a farm...

Question 19

John and Jane entered into an agreement for the sale and purchase of an ornate oak table. The purchase price was $450. The contract was silent as to the time for payment. John, the vendor, insisted that the $450 be paid to him before he would deliver the table. Jane insisted that the table be delivered to her before she paid the $450. Who has taken the correct position? Give the legal basis for your answer.

Accepted Answer

The answer of John and Jane entered into an agreement...

Question 20

International Shippers Corp. wants your advice on the legal implications of international trade. Business has been developing in parts of the Middle East where it's sometimes hard to collect from customers. You advise International Shippers that they should

Accepted Answer

A)  retain a lien on the goods. 
B)  ensure all of their shipments are covered by an order bill of lading. 
C)  ensure all of their shipments are covered by a straight bill of lading. 
D)  first clear each contract through the State Department. 
E)  ensure all of their shipments are C.O.D.

Exam 16: Sale of Goods