Question 1

Which of the following is not a remedy available to an unpaid seller against the buyer?

Accepted Answer

A)  Recovery of the price.
B)  Cover and sue for damages.
C)  Recovery of incidental damages.
D)  Cancellation of the contract. B

Question 2

On February 21,Cara wrote to Pandora Mfg.asking for shipment of 100 swimsuits on 90-day credit.In the letter,she gave references that indicated that her store was financially sound.Actually she had bills that she could not pay and hoped to turn the business around with the summer swimsuit sales.Pandora shipped the suits on April 2; they were received April 15.Cara immediately put them on display and 27 were sold by April 30 when Pandora discovered that Cara had lied.Pandora could:

Accepted Answer

A)  recover 73 suits plus incidental damages.
B)  recover 10 suits provided that Pandora acted within 10 days of discovering the misrepresentation.
C)  recover no suits since it had been more than 10 days since delivery.
D)  recover 73 suits. D

Question 3

Article 2A authorizes liquidated damages payable by either party for default or any other act or omission.

Accepted Answer

A) True 
 B)False  True

Question 4

The fair market value of a 10-foot fishing boat is $1,000.In a special promotion,J's Marina purchases a 10-foot fishing boat for $900.The boat is badly scratched when it arrives.J's Marina,however,accepts the shipment and notifies the seller of the defect.The boat as delivered has a value of $800.If the damaged boat is a breach of warranty by the seller,the buyer may recover from the seller:

Accepted Answer

A)  $100.
B)  $100 plus incidental and consequential damages.
C)  $200.
D)  $200 plus incidental and consequential damages.

Question 5

Andrews Manufacturing Company has repudiated its contract to sell 500 computers to a computer store.What recourse does the retailer have under the circumstances?

Accepted Answer

A)  It must await the seller's performance.
B)  It can recover punitive damages.
C)  It can seek specific performance.
D)  It can "cover" by procuring goods elsewhere and then sue for any difference between the cost of cover and the contract price, plus incidental and consequential damages less expenses saved by the breach.

Question 6

A company may be considered insolvent under the Code only if it is unable to pay its debts as they are due.

Accepted Answer

A) True 
 B)False

Question 7

Landview Appliances sells a stove to Evan for his home.The contract of sale excludes liability for consequential damages.When Evan turns on the stove,it catches fire,burning Evan severely.Evan cannot recover for his injuries because of the exclusion of damages clause.

Accepted Answer

A) True 
 B)False

Question 8

Match each statement with the correct term below.
-commercial impracticability

Accepted Answer

A)  A sequence of previous conduct between parties establishing a basis for interpreting their agreement.
B)  A practice or method of dealing regularly observed and followed in a place, vocation, or trade.
C)  Contractual obligation arising by operation of law providing the goods are reasonably fit for the ordinary purposes for which they are used.
D)  Transfer of possession without title to buyer for a trial period; title and risk of loss remain with seller until buyer accepts the goods.
E)  A contract in which the seller bears the risk of loss and expense until the goods are delivered to the carrier for shipment.F) Transfer of right to possession and use of goods in return for consideration.G) Transfer of title to goods from seller to buyer for a price.H) An offer in writing by a merchant that gives assurance it will be kept open for a period of time up to three months.I) A contract in which goods are sold and delivered to the buyer with an option to return them to the seller; the risk of loss is on the buyer until she returns the goods.J) Delivery term for a shipment contract, free on board.K) Movable personal property.L) Concept under which the Code excuses performance when an unforeseen supervening event, not within the contemplation of the parties at the time of contracting, occurs.M) Limits the time period for which a manufacturer is liable for injury caused by its product.N) Historically, a contractual relationship between the plaintiff and the defendant that was necessary at common law to maintain a lawsuit.O) An affirmation of fact or promise about the goods or a description, including a sample of the goods, which becomes part of the basis of the bargain.P) A contract in which the seller is required to tender delivery of the goods at a particular destination; the seller bears the risk of loss until the goods are tendered to the buyer.Q) A negation of a warranty.R) Designation of specific goods as goods to which the contract of sale refers.S) A person who is a dealer in the goods, or who by his occupation holds himself out as having knowledge or skill peculiar to the goods or practices involved, or who employs an agent or broker whom he holds out as having such knowledge or skill.T) Honesty in fact in the conduct or transaction concerned.

Question 9

Vandehal Company's total liabilities are $520,000 and its total assets are $460,000,and the company is unable to pay debts as they become due.Vandehal's situation falls within the bankruptcy meaning,but not the Code's definition,of insolvency.

Accepted Answer

A) True 
 B)False

Question 10

Match each statement with the correct term below.
-firm offer

Accepted Answer

A)  A sequence of previous conduct between parties establishing a basis for interpreting their agreement.
B)  A practice or method of dealing regularly observed and followed in a place, vocation, or trade.
C)  Contractual obligation arising by operation of law providing the goods are reasonably fit for the ordinary purposes for which they are used.
D)  Transfer of possession without title to buyer for a trial period; title and risk of loss remain with seller until buyer accepts the goods.
E)  A contract in which the seller bears the risk of loss and expense until the goods are delivered to the carrier for shipment.F) Transfer of right to possession and use of goods in return for consideration.G) Transfer of title to goods from seller to buyer for a price.H) An offer in writing by a merchant that gives assurance it will be kept open for a period of time up to three months.I) A contract in which goods are sold and delivered to the buyer with an option to return them to the seller; the risk of loss is on the buyer until she returns the goods.J) Delivery term for a shipment contract, free on board.K) Movable personal property.L) Concept under which the Code excuses performance when an unforeseen supervening event, not within the contemplation of the parties at the time of contracting, occurs.M) Limits the time period for which a manufacturer is liable for injury caused by its product.N) Historically, a contractual relationship between the plaintiff and the defendant that was necessary at common law to maintain a lawsuit.O) An affirmation of fact or promise about the goods or a description, including a sample of the goods, which becomes part of the basis of the bargain.P) A contract in which the seller is required to tender delivery of the goods at a particular destination; the seller bears the risk of loss until the goods are tendered to the buyer.Q) A negation of a warranty.R) Designation of specific goods as goods to which the contract of sale refers.S) A person who is a dealer in the goods, or who by his occupation holds himself out as having knowledge or skill peculiar to the goods or practices involved, or who employs an agent or broker whom he holds out as having such knowledge or skill.T) Honesty in fact in the conduct or transaction concerned.

Question 11

Match each statement with the correct term below.
-incidental damages

Accepted Answer

A)  Unfairness in the bargaining process.
B)  An action at law to recover specific goods in the possession of a defendant that are being unlawfully withheld from the plaintiff.
C)  An amount specified by the parties that is recoverable in the event of a breach.
D)  A seller makes available to a buyer goods conforming to the contract and so notifies the buyer.
E)  The inability of a person to pay his debts in the ordinary course of business or as they become due.F) Total liabilities exceeding the total value of all assets.G) Commercially reasonable expenses directly resulting from a breach.H) Expenses resulting from the buyer's requirements and which the seller had reason to know at the time of contracting; also injury to person or property proximately resulting from breach of warranty.I) A buyer's purchase of goods in substitution for those not delivered by a breaching seller.J) Oppressive or grossly unfair contractual provisions.K) The Code rule that a seller's tender of performance must exactly conform to the contract terms.L) The right of a seller under the Code to correct a nonconforming delivery of goods to the buyer.M) The manifestation by a buyer of unwillingness to become the owner of the goods.N) Rescission of a buyer's acceptance of the goods based upon a nonconformity which substantially impairs their value.

Question 12

Robert paid William $1,000 for a rare first edition of an Edgar Allen Poe novel.The sales contract states that the book is to be delivered within ten days.William,however,refused to deliver the book as promised.In order to sue for specific performance under the UCC,Robert must prove that money damages will not be adequate compensation for his loss.

Accepted Answer

A) True 
 B)False

Question 13

Match each statement with the correct term below.
-express warranty

Accepted Answer

A)  A sequence of previous conduct between parties establishing a basis for interpreting their agreement.
B)  A practice or method of dealing regularly observed and followed in a place, vocation, or trade.
C)  Contractual obligation arising by operation of law providing the goods are reasonably fit for the ordinary purposes for which they are used.
D)  Transfer of possession without title to buyer for a trial period; title and risk of loss remain with seller until buyer accepts the goods.
E)  A contract in which the seller bears the risk of loss and expense until the goods are delivered to the carrier for shipment.F) Transfer of right to possession and use of goods in return for consideration.G) Transfer of title to goods from seller to buyer for a price.H) An offer in writing by a merchant that gives assurance it will be kept open for a period of time up to three months.I) A contract in which goods are sold and delivered to the buyer with an option to return them to the seller; the risk of loss is on the buyer until she returns the goods.J) Delivery term for a shipment contract, free on board.K) Movable personal property.L) Concept under which the Code excuses performance when an unforeseen supervening event, not within the contemplation of the parties at the time of contracting, occurs.M) Limits the time period for which a manufacturer is liable for injury caused by its product.N) Historically, a contractual relationship between the plaintiff and the defendant that was necessary at common law to maintain a lawsuit.O) An affirmation of fact or promise about the goods or a description, including a sample of the goods, which becomes part of the basis of the bargain.P) A contract in which the seller is required to tender delivery of the goods at a particular destination; the seller bears the risk of loss until the goods are tendered to the buyer.Q) A negation of a warranty.R) Designation of specific goods as goods to which the contract of sale refers.S) A person who is a dealer in the goods, or who by his occupation holds himself out as having knowledge or skill peculiar to the goods or practices involved, or who employs an agent or broker whom he holds out as having such knowledge or skill.T) Honesty in fact in the conduct or transaction concerned.

Question 14

Match each statement with the correct term below.
-privity

Accepted Answer

A)  A sequence of previous conduct between parties establishing a basis for interpreting their agreement.
B)  A practice or method of dealing regularly observed and followed in a place, vocation, or trade.
C)  Contractual obligation arising by operation of law providing the goods are reasonably fit for the ordinary purposes for which they are used.
D)  Transfer of possession without title to buyer for a trial period; title and risk of loss remain with seller until buyer accepts the goods.
E)  A contract in which the seller bears the risk of loss and expense until the goods are delivered to the carrier for shipment.F) Transfer of right to possession and use of goods in return for consideration.G) Transfer of title to goods from seller to buyer for a price.H) An offer in writing by a merchant that gives assurance it will be kept open for a period of time up to three months.I) A contract in which goods are sold and delivered to the buyer with an option to return them to the seller; the risk of loss is on the buyer until she returns the goods.J) Delivery term for a shipment contract, free on board.K) Movable personal property.L) Concept under which the Code excuses performance when an unforeseen supervening event, not within the contemplation of the parties at the time of contracting, occurs.M) Limits the time period for which a manufacturer is liable for injury caused by its product.N) Historically, a contractual relationship between the plaintiff and the defendant that was necessary at common law to maintain a lawsuit.O) An affirmation of fact or promise about the goods or a description, including a sample of the goods, which becomes part of the basis of the bargain.P) A contract in which the seller is required to tender delivery of the goods at a particular destination; the seller bears the risk of loss until the goods are tendered to the buyer.Q) A negation of a warranty.R) Designation of specific goods as goods to which the contract of sale refers.S) A person who is a dealer in the goods, or who by his occupation holds himself out as having knowledge or skill peculiar to the goods or practices involved, or who employs an agent or broker whom he holds out as having such knowledge or skill.T) Honesty in fact in the conduct or transaction concerned.

Question 15

Match each statement with the correct term below.
-liquidated damages

Accepted Answer

A)  Unfairness in the bargaining process.
B)  An action at law to recover specific goods in the possession of a defendant that are being unlawfully withheld from the plaintiff.
C)  An amount specified by the parties that is recoverable in the event of a breach.
D)  A seller makes available to a buyer goods conforming to the contract and so notifies the buyer.
E)  The inability of a person to pay his debts in the ordinary course of business or as they become due.F) Total liabilities exceeding the total value of all assets.G) Commercially reasonable expenses directly resulting from a breach.H) Expenses resulting from the buyer's requirements and which the seller had reason to know at the time of contracting; also injury to person or property proximately resulting from breach of warranty.I) A buyer's purchase of goods in substitution for those not delivered by a breaching seller.J) Oppressive or grossly unfair contractual provisions.K) The Code rule that a seller's tender of performance must exactly conform to the contract terms.L) The right of a seller under the Code to correct a nonconforming delivery of goods to the buyer.M) The manifestation by a buyer of unwillingness to become the owner of the goods.N) Rescission of a buyer's acceptance of the goods based upon a nonconformity which substantially impairs their value.

Question 16

When existing goods are identified to the contract of sale,the buyer acquires a special property interest in the goods.

Accepted Answer

A) True 
 B)False

Question 17

Under the CISG,if the contract is avoided and the seller has resold the goods in a reasonable manner and within a reasonable time after avoidance,the seller may recover:

Accepted Answer

A)  the difference between the contract price and the resale price.
B)  incidental damages only.
C)  consequential damages.
D)  Both (a)  and (c) .

Question 18

Match each statement with the correct term below.
-merchant

Accepted Answer

A)  A sequence of previous conduct between parties establishing a basis for interpreting their agreement.
B)  A practice or method of dealing regularly observed and followed in a place, vocation, or trade.
C)  Contractual obligation arising by operation of law providing the goods are reasonably fit for the ordinary purposes for which they are used.
D)  Transfer of possession without title to buyer for a trial period; title and risk of loss remain with seller until buyer accepts the goods.
E)  A contract in which the seller bears the risk of loss and expense until the goods are delivered to the carrier for shipment.F) Transfer of right to possession and use of goods in return for consideration.G) Transfer of title to goods from seller to buyer for a price.H) An offer in writing by a merchant that gives assurance it will be kept open for a period of time up to three months.I) A contract in which goods are sold and delivered to the buyer with an option to return them to the seller; the risk of loss is on the buyer until she returns the goods.J) Delivery term for a shipment contract, free on board.K) Movable personal property.L) Concept under which the Code excuses performance when an unforeseen supervening event, not within the contemplation of the parties at the time of contracting, occurs.M) Limits the time period for which a manufacturer is liable for injury caused by its product.N) Historically, a contractual relationship between the plaintiff and the defendant that was necessary at common law to maintain a lawsuit.O) An affirmation of fact or promise about the goods or a description, including a sample of the goods, which becomes part of the basis of the bargain.P) A contract in which the seller is required to tender delivery of the goods at a particular destination; the seller bears the risk of loss until the goods are tendered to the buyer.Q) A negation of a warranty.R) Designation of specific goods as goods to which the contract of sale refers.S) A person who is a dealer in the goods, or who by his occupation holds himself out as having knowledge or skill peculiar to the goods or practices involved, or who employs an agent or broker whom he holds out as having such knowledge or skill.T) Honesty in fact in the conduct or transaction concerned.

Question 19

In the Bigelow-Sanford,Inc.v.Gunny Corp.case,the court found:

Accepted Answer

A)  the buyer did not purchase substitute goods in good faith and without unreasonable delay.
B)  the Code permits a buyer to cover by buying substitute goods if the buyer acts in good faith and without unreasonable delay.
C)  since the buyer did not specifically allocate the spot market replacements to the individual sellers' accounts, the cost of cover could not be determined in this case.
D)  the buyer was required to obtain cover and its failure to do so bars other Code remedies.

Question 20

Match each statement with the correct term below.
-procedural unconscionability

Accepted Answer

A)  Unfairness in the bargaining process.
B)  An action at law to recover specific goods in the possession of a defendant that are being unlawfully withheld from the plaintiff.
C)  An amount specified by the parties that is recoverable in the event of a breach.
D)  A seller makes available to a buyer goods conforming to the contract and so notifies the buyer.
E)  The inability of a person to pay his debts in the ordinary course of business or as they become due.F) Total liabilities exceeding the total value of all assets.G) Commercially reasonable expenses directly resulting from a breach.H) Expenses resulting from the buyer's requirements and which the seller had reason to know at the time of contracting; also injury to person or property proximately resulting from breach of warranty.I) A buyer's purchase of goods in substitution for those not delivered by a breaching seller.J) Oppressive or grossly unfair contractual provisions.K) The Code rule that a seller's tender of performance must exactly conform to the contract terms.L) The right of a seller under the Code to correct a nonconforming delivery of goods to the buyer.M) The manifestation by a buyer of unwillingness to become the owner of the goods.N) Rescission of a buyer's acceptance of the goods based upon a nonconformity which substantially impairs their value.

Exam 23: Sales Remedies

Which of the following is not a remedy available to an unpaid seller against the buyer?

Article 2A authorizes liquidated damages payable by either party for default or any other act or omission.

Andrews Manufacturing Company has repudiated its contract to sell 500 computers to a computer store.What recourse does the retailer have under the circumstances?

A company may be considered insolvent under the Code only if it is unable to pay its debts as they are due.

Landview Appliances sells a stove to Evan for his home.The contract of sale excludes liability for consequential damages.When Evan turns on the stove,it catches fire,burning Evan severely.Evan cannot recover for his injuries because of the exclusion of damages clause.

Match each statement with the correct term below. -commercial impracticability

Vandehal Company's total liabilities are $520,000 and its total assets are $460,000,and the company is unable to pay debts as they become due.Vandehal's situation falls within the bankruptcy meaning,but not the Code's definition,of insolvency.

Match each statement with the correct term below. -firm offer

Match each statement with the correct term below. -incidental damages

Match each statement with the correct term below. -express warranty

Match each statement with the correct term below. -privity

Match each statement with the correct term below. -liquidated damages

When existing goods are identified to the contract of sale,the buyer acquires a special property interest in the goods.

Under the CISG,if the contract is avoided and the seller has resold the goods in a reasonable manner and within a reasonable time after avoidance,the seller may recover:

Match each statement with the correct term below. -merchant

In the Bigelow-Sanford,Inc.v.Gunny Corp.case,the court found:

Match each statement with the correct term below. -procedural unconscionability