Question 1

Watercourse Pipe Company includes in its contracts a provision that reads, in large red letters, "There are no warranties that extend beyond the description on the face hereof." This disclaimer negates

Accepted Answer

A)  ​the implied warranty of fitness for a particular purpose. 
B)  ​the implied warranty of merchantability. 
C)  ​the implied warranty of title. 
D)  ​none of the choices.

Question 2

Gold Medical Supply Company and Home & Hospice Care, Inc., enter into a contract for a sale of health care equipment and supplies. Under either a shipment contract or a destination contract, the seller must

Accepted Answer

A) allow the buyer to reject the goods for any reason. 
B) deliver the goods to a particular destination. 
C) place the goods into the hands of a carrier. 
D) give the buyer any necessary documents of title.

Question 3

Arnold buys a backhoe from Big Dig Equipment Inc. Arnold is unaware that Credit Collection Company holds a lien against the backhoe when he buys it. If Credit Collection repossesses the backhoe, Arnold can

Accepted Answer

A)  ​recover from Big Dig for breach of warranty. 
B)  ​do nothing. 
C)  ​file criminal charges against Big Dig and Credit Collection. 
D)  ​recover damages from Credit Collection for breach of warranty.

Question 4

When a seller refuses to deliver goods that are unique, a buyer can obtain specific performance.

Accepted Answer

A) True 
 B)False

Question 5

Signal Sets Company contracts to deliver one hundred 52-inch plasma high-definition television sets to a new retail customer, Tuner TV Store, on May 1, with payment to be made on delivery. Signal tenders delivery in its own truck. Tuner's manager notices that some of the cartons have scrape marks. Tuner's owner phones Signal's office and asks whether the sets might have been damaged as they were being loaded. Signal assures Tuner that the sets are in perfect condition. Tuner tenders Signal a check, which Signal refuses, claiming that the first delivery to new customers is always for cash. Tuner promises to pay the cash within two days. Signal leaves the sets with Tuner, which stores them in its warehouse pending its "Grand Opening Sale" on May 15. Two days later, Tuner's stocker opens some of the cartons and discovers that a number of the sets are damaged beyond ordinary repair. Signal claims Tuner has accepted the sets and is in breach by not paying on delivery. Will Signal succeed on these claims? Explain.

Accepted Answer

The answer of Signal Sets Company contracts to deliver one...

Question 6

Global Talk Corporation sells phones and other mobile devices. Under most circumstances, Global Talk will be presumed to have warranted that its title to the goods is

Accepted Answer

A)  ​the same as each brand's name. 
B)  ​none of the choices-a warranty of title is not presumed. 
C)  ​good and valid. 
D)  ​the best that money can buy.

Question 7

Oh! Wow! Markets, Inc., rejects a shipment of turkey that does not conform to its contract with Poultry Processing Corporation, but is unable to obtain instructions from the seller. Oh! Wow! Markets can

Accepted Answer

A)  ​destroy the goods. 
B)  ​cure the goods to make them conform to the contract. 
C)  ​retain the goods without paying for them. 
D)  ​reship or store the goods for the seller.

Question 8

If a lessee breaches a contract, the lessor can cancel the contract.

Accepted Answer

A) True 
 B)False

Question 9

A shipment contract requires a seller to ship goods by a carrier.

Accepted Answer

A) True 
 B)False

Question 10

Statements of opinion and value usually create express warranties.

Accepted Answer

A) True 
 B)False

Question 11

Loading Ramps Plus Inc. contracts to sell sixteen aluminum loading ramps to Moving Services, Inc. Loading Ramps ships the ramps, which Moving Services accepts but does not pay for. Loading Ramps can​​

Accepted Answer

A)  ​sue to recover the purchase price plus incidental damages. 
B)  ​sue to recover the purchase price minus incidental damages. 
C)  ​resell the ramps to any buyer willing to reclaim them from Moving Services. 
D)  ​require Moving Services to revoke its acceptance of the ramps.

Question 12

Blanche, a salesperson for Custom Restaurant Equipment, Inc., shows Dylan, a buyer for Eat n' Dine Company, display items in Custom's showroom, stating that any purchased equipment will match the display. This statement is​

Accepted Answer

A)  ​an express warranty. 
B)  ​an implied warranty. 
C)  ​a warranty of title. 
D)  ​puffery.

Question 13

To specifically disclaim an implied warranty of fitness for a particular purpose, a seller or lessor must mention the word fitness.

Accepted Answer

A) True 
 B)False

Question 14

Beef Burgers, Inc. contracts to buy five hundred head of cattle from Calf & Cow Farms. Before Calf & Cow delivers, an outbreak of disease causes a quarantine of the farm. In this circumstance, the perfect tender rule

Accepted Answer

A)  ​applies to both parties. 
B)  ​no longer applies. 
C)  ​applies only to Beef Burgers. 
D)  ​applies only to Calf & Cow.

Question 15

The principle of good faith applies to both parties to a sales contract.

Accepted Answer

A) True 
 B)False

Question 16

Pebble Leasing Corporation and Quarry Rock & Gravel Company enter into a lease of three excavators. Under the perfect tender rule, Pebble Leasing must ship or tender goods to Quarry Rock & Gravel that, with respect to the contract description, conform

Accepted Answer

A)  ​to the best of Pebble's ability under the circumstances. 
B)  ​reasonably. 
C)  ​in every way. 
D)  ​substantially.

Question 17

Implied warranties can arise from a "usage of trade."

Accepted Answer

A) True 
 B)False

Question 18

In sales law, failing to examine the goods and refusing to examine the goods are considered the same thing.

Accepted Answer

A) True 
 B)False

Question 19

Dependable Appliances, Inc., and Elaine enter into a contract for a sale of kitchen appliances. Dependable, a merchant who deals in goods of the kind sold, notes that its goods come with an implied warranty of merchantability. Under the UCC, this means that the goods are reasonably

Accepted Answer

A)  ​fit for the buyer's particular purpose. 
B)  ​fit for the ordinary purpose for which such goods are used. 
C)  ​suitable for resale at an acceptable price. 
D)  ​the best quality that money can buy.

Question 20

To specifically disclaim an implied warrant of merchantability, a seller or lessor must mention the word merchantability.

Accepted Answer

A) True 
 B)False

Exam 18: Performance and Breach of Sales and Lease Contracts

Watercourse Pipe Company includes in its contracts a provision that reads, in large red letters, "There are no warranties that extend beyond the description on the face hereof." This disclaimer negates

Gold Medical Supply Company and Home & Hospice Care, Inc., enter into a contract for a sale of health care equipment and supplies. Under either a shipment contract or a destination contract, the seller must

Arnold buys a backhoe from Big Dig Equipment Inc. Arnold is unaware that Credit Collection Company holds a lien against the backhoe when he buys it. If Credit Collection repossesses the backhoe, Arnold can

When a seller refuses to deliver goods that are unique, a buyer can obtain specific performance.

Global Talk Corporation sells phones and other mobile devices. Under most circumstances, Global Talk will be presumed to have warranted that its title to the goods is

Oh! Wow! Markets, Inc., rejects a shipment of turkey that does not conform to its contract with Poultry Processing Corporation, but is unable to obtain instructions from the seller. Oh! Wow! Markets can

If a lessee breaches a contract, the lessor can cancel the contract.

A shipment contract requires a seller to ship goods by a carrier.

Statements of opinion and value usually create express warranties.

Loading Ramps Plus Inc. contracts to sell sixteen aluminum loading ramps to Moving Services, Inc. Loading Ramps ships the ramps, which Moving Services accepts but does not pay for. Loading Ramps can​​

Blanche, a salesperson for Custom Restaurant Equipment, Inc., shows Dylan, a buyer for Eat n' Dine Company, display items in Custom's showroom, stating that any purchased equipment will match the display. This statement is​

To specifically disclaim an implied warranty of fitness for a particular purpose, a seller or lessor must mention the word fitness.

Beef Burgers, Inc. contracts to buy five hundred head of cattle from Calf & Cow Farms. Before Calf & Cow delivers, an outbreak of disease causes a quarantine of the farm. In this circumstance, the perfect tender rule

The principle of good faith applies to both parties to a sales contract.

Pebble Leasing Corporation and Quarry Rock & Gravel Company enter into a lease of three excavators. Under the perfect tender rule, Pebble Leasing must ship or tender goods to Quarry Rock & Gravel that, with respect to the contract description, conform

Implied warranties can arise from a "usage of trade."

In sales law, failing to examine the goods and refusing to examine the goods are considered the same thing.

Dependable Appliances, Inc., and Elaine enter into a contract for a sale of kitchen appliances. Dependable, a merchant who deals in goods of the kind sold, notes that its goods come with an implied warranty of merchantability. Under the UCC, this means that the goods are reasonably

To specifically disclaim an implied warrant of merchantability, a seller or lessor must mention the word merchantability.

Loading Ramps Plus Inc. contracts to sell sixteen aluminum loading ramps to Moving Services, Inc. Loading Ramps ships the ramps, which Moving Services accepts but does not pay for. Loading Ramps can

Blanche, a salesperson for Custom Restaurant Equipment, Inc., shows Dylan, a buyer for Eat n' Dine Company, display items in Custom's showroom, stating that any purchased equipment will match the display. This statement is