Question 1

Clear Day Company,which is based in Delaware,agrees to sell fifty windows,currently stored in Florida,to Far Vu,Inc.,which is based in Hawaii.Absent an agreement to the contrary,the place of deliv-ery is in

Accepted Answer

A) California. 
B) Delaware. 
C) Florida. 
D) Hawaii.

Question 2

A shipment contract requires that the seller deliver the goods to a particular location.

Accepted Answer

A) True 
 B)False

Question 3

Craft Engineering,Inc.,contracts for a sale of technical instruments to Detail Design Company.Before the date on which performance is due,Craft notifies Detail that it will not perform.This is

Accepted Answer

A) anticipatory repudiation. 
B) perfect tender. 
C) rejection of performance. 
D) revocation of acceptance.

Question 4

If a buyer repudiates a contract,the seller cannot re-cover damages.

Accepted Answer

A) True 
 B)False

Question 5

If a buyer breaches a contract while the seller is still in possession of the goods,the seller can resell the goods and hold the buyer liable for any loss.

Accepted Answer

A) True 
 B)False

Question 6

Shane's Auto Parts orders twenty tires from Tough Tires,Inc.The truck delivering the tires to Shane's is in an accident and ten of the tires are damaged.Shane's Auto Parts

Accepted Answer

A) cannot reject the entire shipment. 
B) must still pay for all twenty tires at the original contract price. 
C) may inspect the tires and accept the shipment with a reduction in price. 
D) must reject the entire shipment.

Question 7

If a seller fails to deliver the goods,the buyer's damages do not include all losses resulting from this course of events.

Accepted Answer

A) True 
 B)False

Question 8

Garden Field Farms and Haute Gourmet Restaurant,Inc.,enter into a con-tract for a sale of lettuce before Haute Gourmet declares bankruptcy.Garden Field can stop delivery of the goods in transit

Accepted Answer

A) only if the quantity is at least a carload. 
B) only if the quantity is at least a planeload. 
C) only if the quantity is at least a truckload. 
D) regardless of the quantity.

Question 9

Julia orders twelve violins for her music shop from Notable Notes Instrument Manufacturers.The sale is made on credit.Julia orders the violins on May 1,Notable Notes ships the violins on May 2,and Julia receives the violins on May 4.Julia sells all the violins by June 15.Julia's credit period most likely began on

Accepted Answer

A) May 1. 
B) May 2. 
C) May 4. 
D) June 15.

Question 10

Tender of delivery requires that the seller or lessor hold the goods at the buyer's or lessee's disposal,but not that the goods be conforming.

Accepted Answer

A) True 
 B)False

Question 11

Natural Foods,Inc.,orders "Grade A" oil from Olive Grove Farms to process and sell to Pic 'N Pay Grocers.Olive Grove ships "Grade B" oil,which Natural Foods accepts.To recover damages for the nonconformity,Natural Foods must give notice of the breach within a reasonable time to

Accepted Answer

A) Olive Grove only. 
B) Olive Grove,Pic 'N Pay,and the appropriate government agency. 
C) Pic 'N Pay only. 
D) the appropriate government agency only.

Question 12

If a seller asks a buyer to store nonconforming goods overnight,then the buyer is entitled to reimbursement for the costs involved.

Accepted Answer

A) True 
 B)False

Question 13

BBQ,Inc.,makes and sells grills to Grill Mart,a retailer,which sells one of the grills to Hope,a consumer.BBQ and Grill Mart include in their contracts a limitation on consequential damages for personal inju-ries arising from a breach of warranty.This is prima facie un-conscionable with respect to

Accepted Answer

A) all of these parties. 
B) BBQ and Grill Mart,but not Hope. 
C) Hope only. 
D) none of these parties.

Question 14

A buyer who obtains substitute goods to replace goods that a seller did not deliv-er can also recover damages from the seller.

Accepted Answer

A) True 
 B)False

Question 15

Levi's Toy Store orders one hundred board games from Big Board Games Warehouse.When the games are delivered,they are all missing pieces.Levi's Toy Store rejects the shipment.Big Board Games wants to cure.Big Board Games must

Accepted Answer

A) promptly notify Levi's Toy Store of the intent to cure. 
B) pay Levi's Toy store a cure fee. 
C) send a truck to pick up the nonconforming goods before the end of the business day. 
D) create a new contract with Levi's Toy Store.

Question 16

On a lessee's insolvency,the lessor can stop delivery of the goods.

Accepted Answer

A) True 
 B)False

Question 17

Sparkling Gem Corporation agrees to sell Jewel Outlets,Inc.(JOI),fifty new diamonds,but the contract does not specify a place of delivery.JOI is expected to pick up the goods.The place of delivery is

Accepted Answer

A) Sparkling's place of business. 
B) JOI's place of business. 
C) the Annual Gems and Jewels Convention in New York City. 
D) the U.S.Postal Service office nearest to JOI's place of business.

Question 18

Bayou Boats,Inc.,contracts for the sale of seven swamp boats to Eventide Fishing Tours.Bayou repudiates the contract.Eventide's recovery is measured at the time

Accepted Answer

A) Bayou advertised the goods. 
B) Eventide ordered the goods. 
C) Eventide learned of the breach. 
D) Bayou knew that it would repudiate the contract.

Question 19

Genuine Seed Company and Hillside Farmers Cooperative enter into a contract for a sale of hybrid seeds.Under the perfect tender rule,Genuine Seed must ship or tender seeds to Hillside that

Accepted Answer

A) approximately conform to all of the details of the contract. 
B) entirely conform to the contract except in one or two details. 
C) exactly conform to the contract in every detail. 
D) substantially conform to the contract in most details.

Question 20

Tender must occur at a reasonable hour and in a reasonable manner.

Accepted Answer

A) True 
 B)False

Exam 15: Performance and Breach of Sales and Lease Contracts

Clear Day Company,which is based in Delaware,agrees to sell fifty windows,currently stored in Florida,to Far Vu,Inc.,which is based in Hawaii.Absent an agreement to the contrary,the place of deliv-ery is in

A shipment contract requires that the seller deliver the goods to a particular location.

Craft Engineering,Inc.,contracts for a sale of technical instruments to Detail Design Company.Before the date on which performance is due,Craft notifies Detail that it will not perform.This is

If a buyer repudiates a contract,the seller cannot re-cover damages.

If a buyer breaches a contract while the seller is still in possession of the goods,the seller can resell the goods and hold the buyer liable for any loss.

Shane's Auto Parts orders twenty tires from Tough Tires,Inc.The truck delivering the tires to Shane's is in an accident and ten of the tires are damaged.Shane's Auto Parts

If a seller fails to deliver the goods,the buyer's damages do not include all losses resulting from this course of events.

Garden Field Farms and Haute Gourmet Restaurant,Inc.,enter into a con-tract for a sale of lettuce before Haute Gourmet declares bankruptcy.Garden Field can stop delivery of the goods in transit

Tender of delivery requires that the seller or lessor hold the goods at the buyer's or lessee's disposal,but not that the goods be conforming.

Natural Foods,Inc.,orders "Grade A" oil from Olive Grove Farms to process and sell to Pic 'N Pay Grocers.Olive Grove ships "Grade B" oil,which Natural Foods accepts.To recover damages for the nonconformity,Natural Foods must give notice of the breach within a reasonable time to

If a seller asks a buyer to store nonconforming goods overnight,then the buyer is entitled to reimbursement for the costs involved.

BBQ,Inc.,makes and sells grills to Grill Mart,a retailer,which sells one of the grills to Hope,a consumer.BBQ and Grill Mart include in their contracts a limitation on consequential damages for personal inju-ries arising from a breach of warranty.This is prima facie un-conscionable with respect to

A buyer who obtains substitute goods to replace goods that a seller did not deliv-er can also recover damages from the seller.

Levi's Toy Store orders one hundred board games from Big Board Games Warehouse.When the games are delivered,they are all missing pieces.Levi's Toy Store rejects the shipment.Big Board Games wants to cure.Big Board Games must

On a lessee's insolvency,the lessor can stop delivery of the goods.

Sparkling Gem Corporation agrees to sell Jewel Outlets,Inc.(JOI) ,fifty new diamonds,but the contract does not specify a place of delivery.JOI is expected to pick up the goods.The place of delivery is

Bayou Boats,Inc.,contracts for the sale of seven swamp boats to Eventide Fishing Tours.Bayou repudiates the contract.Eventide's recovery is measured at the time

Genuine Seed Company and Hillside Farmers Cooperative enter into a contract for a sale of hybrid seeds.Under the perfect tender rule,Genuine Seed must ship or tender seeds to Hillside that

Tender must occur at a reasonable hour and in a reasonable manner.