Question 1

If a party to a contract anticipatorily repudiates a contract,then:

Accepted Answer

A)  that repudiation may not be retracted 
B)  that repudiation may be retracted under any circumstances 
C)  that repudiation may be retracted only if the aggrieved party has not changed its position,canceled the contract,or otherwise indicated that the repudiation is final 
D)  that repudiation may be retracted only with the consent of the other party

Question 2

If there is an anticipatory repudiation of a contract for the sale of goods,the nonbreaching party may choose whether to await performance or treat the contract as breached at the time of the repudiation.

Accepted Answer

A) True 
 B)False

Question 3

If the seller or lessor tenders nonconforming goods and the buyer or lessee accepts them,what remedies are available to the buyer?

Accepted Answer

A)  sue for ordinary damages 
B)  deduct damages from the unpaid purchase price 
C)  punitive damages 
D)  A only 
E)  A and B only

Question 4

Seller,a manufacturer of radios,contracts to deliver 1,000 radios to the buyer.The radios are delivered at the proper time.The buyer inspected the goods as much as she thought necessary.Some of the radios were sold.Later,it was determined that the radios had two defects.First,the coating on the radios had run,making them somewhat unsightly.Second,a few units were improperly manufactured,so they would not play.The buyer attempts to return all the radios.Discuss the rights and duties of both the buyer and seller in this situation.

Accepted Answer

The answer of Seller,a manufacturer of radios,contracts to deliver 1,000...

Question 5

Which of the following statements is true about acceptance of goods and the revocation of that acceptance?

Accepted Answer

A)  In order to reject nonconforming goods,the nonconformity must be one that substantially impairs the value of the goods to the buyer. 
B)  An acceptance of goods can be revoked in any circumstance where the goods could have been rejected initially. 
C)  Goods can be rejected in more circumstances than those where an acceptance of goods can be revoked. 
D)  If the buyer actually saw and inspected the goods prior to acceptance,the acceptance of those goods cannot be revoked.

Question 6

If a seller cancels a sales or lease contract with a buyer,the cancellation may refer only to the affected goods.

Accepted Answer

A) True 
 B)False

Question 7

Tender of delivery under the UCC requires the seller to transfer and deliver goods to the buyer in accordance with a sales or lease contract.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is generally true about provisions in a contract under the UCC that provide specific remedies?

Accepted Answer

A)  These specific remedies are always in addition to those provided by the UCC. 
B)  These specific remedies are unenforceable because the UCC remedy provisions control. 
C)  The UCC remedies also apply unless the contract states that the contract remedies are exclusive. 
D)  The specific contract remedies will be considered to be unconscionable.

Question 9

A computer dealer whose place of business is in Chicago contracts on March 15 to sell 100 personal computers to a CPA firm whose place of business is in Milwaukee.The contract does not mention anything about the time or place of delivery.What are the delivery requirements for this contract?

Accepted Answer

A)  at a reasonable place within a reasonable time from March 15 
B)  at a reasonable place on March 15 
C)  at the computer dealer within a reasonable time from March 15 
D)  at the CPA firm within a reasonable time from March 15 
E)  The parties are obligated to reach an agreement for delivery,and its terms will be controlling.

Question 10

If a seller delivers nonconforming goods under an installment contract,the buyer or lessee may reject any noncomforming installment if the value of the installment is impaired and the defect cannot be cured.

Accepted Answer

A) True 
 B)False

Question 11

If a seller fails to deliver conforming goods,which of the following remedies is NOT available to the buyer?

Accepted Answer

A)  cover and collect damages equal to the cover price less the contract price 
B)  not cover,but collect damages equal to the fair market value of the goods less the contract price 
C)  cover and collect damages equal to the contract price less the cover price 
D)  sue and collect for lost profits

Question 12

Peach Motors is a factory-authorized dealer for the manufacturer of the Zebra,a popular luxury sport model that is a leading seller.The Zebra comes with almost every conceivable piece of equipment standard.The only option is an automatic transmission.Thus,the only differences in individual cars are the type of transmission and color of the car.Peach Motors orders 30 Zebras from the factory.The cars ordered are various colors and include some with automatic transmission and some with manual transmission.The factory delivers only five Zebras,all with manual transmission,all in orange,the slowest selling color.Peach had ordered no orange Zebras.Discuss Peach's remedies.

Accepted Answer

The answer of Peach Motors is a factory-authorized dealer for...

Question 13

A sales contract requires the seller to deliver 100 shirts to the buyer.Upon inspection the buyer discovers that 99 shirts conform to the contract but one does not.The buyer must return the entire shipment and either ask for a refund or replace the order with the seller.

Accepted Answer

A) True 
 B)False

Question 14

Avco Restaurants contracts to purchase $10,000 worth of specially manufactured tablecloths and napkins with its distinctive logo on them.After the seller completes them,Avco wrongfully refuses to accept or pay for these goods.These goods cannot be sold in the open market.If the seller sues Avco,what is the proper measure of damages?

Accepted Answer

A)  contract price less resale price 
B)  fair market value less contract price 
C)  contract price 
D)  cover price less contract price 
E)  lost profits

Question 15

If a merchant buyer rejects goods,and the seller does not have an agent or place of business at the market where the goods were rejected,the buyer must:

Accepted Answer

A)  follow any reasonable instructions from the seller 
B)  if no instructions come from the seller,sell the goods 
C)  if the goods are not perishable,sell the goods 
D)  A and B only 
E)  A and C only

Question 16

A seller contracted to deliver goods for a contract price of $20,000.At the time of delivery,the seller delivered nonconforming goods,worth only $12,000.If the buyer covers,its cost would be $22,000.If the buyer does not cover,the fair market value of conforming goods is $25,000.Which of the following remedies is NOT available to the buyer?

Accepted Answer

A)  return the nonconforming goods,cover,and collect $2,000 in damages 
B)  return the nonconforming goods,not cover,and collect $5,000 in damages 
C)  accept the nonconforming goods and collect $8,000 in damages 
D)  return the nonconforming goods,not cover,and collect $20,000 in damages

Question 17

A party requesting assurance of performance from the other party remains obligated to perform its own obligations even if adequate assurance is not received from the other party.

Accepted Answer

A) True 
 B)False

Question 18

Roger contracts with Music Company to buy one of its pianos for $2,000.Music Company has several of these pianos in stock and can buy an unlimited number from the manufacturer.Roger refuses to accept this piano,and Music sells it to another customer for $1,900.If Music sues Roger for breach of contract,the proper measure of Music's damages would be which of the following?

Accepted Answer

A)  contract price less resale price 
B)  contract price less fair market value 
C)  contract price 
D)  lost profits 
E)  Music suffered no damage.

Question 19

If a seller "resells" the goods after a breach by the buyer,the resale must be at a public auction.

Accepted Answer

A) True 
 B)False

Question 20

The requirement that goods tendered to a buyer must conform in all ways to the terms of the contract is called the:

Accepted Answer

A)  complete performance rule 
B)  perfect tender rule 
C)  no right to cure rule 
D)  substantial performance rule

Exam 20: Remedies for Breach of Sales and Lease Contracts

If a party to a contract anticipatorily repudiates a contract,then:

If there is an anticipatory repudiation of a contract for the sale of goods,the nonbreaching party may choose whether to await performance or treat the contract as breached at the time of the repudiation.

If the seller or lessor tenders nonconforming goods and the buyer or lessee accepts them,what remedies are available to the buyer?

Which of the following statements is true about acceptance of goods and the revocation of that acceptance?

If a seller cancels a sales or lease contract with a buyer,the cancellation may refer only to the affected goods.

Tender of delivery under the UCC requires the seller to transfer and deliver goods to the buyer in accordance with a sales or lease contract.

Which of the following is generally true about provisions in a contract under the UCC that provide specific remedies?

A computer dealer whose place of business is in Chicago contracts on March 15 to sell 100 personal computers to a CPA firm whose place of business is in Milwaukee.The contract does not mention anything about the time or place of delivery.What are the delivery requirements for this contract?

If a seller delivers nonconforming goods under an installment contract,the buyer or lessee may reject any noncomforming installment if the value of the installment is impaired and the defect cannot be cured.

If a seller fails to deliver conforming goods,which of the following remedies is NOT available to the buyer?

A sales contract requires the seller to deliver 100 shirts to the buyer.Upon inspection the buyer discovers that 99 shirts conform to the contract but one does not.The buyer must return the entire shipment and either ask for a refund or replace the order with the seller.

If a merchant buyer rejects goods,and the seller does not have an agent or place of business at the market where the goods were rejected,the buyer must:

A party requesting assurance of performance from the other party remains obligated to perform its own obligations even if adequate assurance is not received from the other party.

If a seller "resells" the goods after a breach by the buyer,the resale must be at a public auction.

The requirement that goods tendered to a buyer must conform in all ways to the terms of the contract is called the: