Question 1

Text Publishers, Inc., contracts for a sale of textbooks to University Bookstores, Inc. Vital Shipping Corporation, the carrier, transports the books to Warehouse Storage Company. Text's right to stop delivery is lost when University's rights to the goods are acknowledged by

Accepted Answer

A)  the appropriate government agency only. 
B)  Vital Shipping only. 
C)  Vital Shipping or Warehouse Storage. 
D)  Warehouse Storage only.

Question 2

An unpaid seller can bring an action to recover the purchase price, on the buyer's breach of a contract, only if the goods are first disposed of.

Accepted Answer

A) True 
 B)False

Question 3

An installment contract is breached if a buyer accepts any nonconforming goods.

Accepted Answer

A) True 
 B)False

Question 4

A buyer who rightfully rejects nonconforming goods can resell the goods and keep the proceeds.

Accepted Answer

A) True 
 B)False

Question 5

Under the UCC, an innocent party under a breached sales or lease contract is limited to one exclusive remedy.

Accepted Answer

A) True 
 B)False

Question 6

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 7

Unless the parties agree otherwise, a buyer or lessee must pay for goods at the time and place of their receipt.

Accepted Answer

A) True 
 B)False

Question 8

A lessee's breach of a contract will usually give the lessor the right to cancel the contract.

Accepted Answer

A) True 
 B)False

Question 9

In general, a buyer's duty to pay for tendered goods becomes absolute be?fore the buyer has had an opportunity to inspect the goods.

Accepted Answer

A) True 
 B)False

Question 10

Fact Pattern 22-A1 
Internet Cafes, Inc., contracts to buy all of its requirements for coffee, at a minimum of 1 million pounds per year, from Java Corporation for six years. After three years, Internet tells Java that it plans to sell its company to Kwik Eateries, Inc. Kwik refuses to assure Java that it will continue Internet's contract.
-Refer to Fact Pattern 22-A1. Kwik's refusal constitutes

Accepted Answer

A)  a justified response based on Kwik's relation to the contract. 
B)  an assignment of Internet's rights under the contract. 
C)  a reasonable suspension of performance under the contract. 
D)  a repudiation of the contract.

Question 11

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 12

Leather Products Stores, Inc., rejects a shipment of goods that does not conform to its contract with Manufactured Cowhide Corporation, but is unable to obtain instructions from the seller. Leather Products may

Accepted Answer

A)  resell or return the goods only. 
B)  resell or store the goods only. 
C)  return or store the goods only. 
D)  resell, return, or store the goods.

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

Fact Pattern 22-B1 
First State Bank issues a letter of credit in favor of Oboe Company, an American firm, to facilitate an international sales contract to buy resources from Lapland Mining, Ltd., a Finnish company.
-Refer to Fact Pattern 22-B1. First State Bank must pay Lapland when Lapland

Accepted Answer

A)  enters into the contract with Oboe. 
B)  verifies that Oboe has the money to pay for the purchase. 
C)  complies with the terms and conditions of the letter of credit. 
D)  none of the above.

Question 15

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 16

If a buyer wrongfully refuses to accept goods that conform to a contract, the seller may recover damages.

Accepted Answer

A) True 
 B)False

Question 17

Under the UCC, a seller's tender of goods that do not conform in every way to a contract is not a valid tender.

Accepted Answer

A) True 
 B)False

Question 18

Field Gardens and Gourmet Restaurant, Inc., enter into a con?tract for a sale of lettuce before Gourmet declares bankruptcy. 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 19

Fact Pattern 22-B1 
First State Bank issues a letter of credit in favor of Oboe Company, an American firm, to facilitate an international sales contract to buy resources from Lapland Mining, Ltd., a Finnish company.
-Refer to Fact Pattern 22-B1. In a letter of credit, the ben?eficiary is

Accepted Answer

A)  Lapland. 
B)  Oboe. 
C)  First State Bank. 
D)  none of the above.

Question 20

A buyer who accepts conforming goods cannot revoke the acceptance.

Accepted Answer

A) True 
 B)False

Exam 22: Performance Breach of Sales Lease Contracts

Text Publishers, Inc., contracts for a sale of textbooks to University Bookstores, Inc. Vital Shipping Corporation, the carrier, transports the books to Warehouse Storage Company. Text's right to stop delivery is lost when University's rights to the goods are acknowledged by

An unpaid seller can bring an action to recover the purchase price, on the buyer's breach of a contract, only if the goods are first disposed of.

An installment contract is breached if a buyer accepts any nonconforming goods.

A buyer who rightfully rejects nonconforming goods can resell the goods and keep the proceeds.

Under the UCC, an innocent party under a breached sales or lease contract is limited to one exclusive remedy.

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

Unless the parties agree otherwise, a buyer or lessee must pay for goods at the time and place of their receipt.

A lessee's breach of a contract will usually give the lessor the right to cancel the contract.

In general, a buyer's duty to pay for tendered goods becomes absolute be?fore the buyer has had an opportunity to inspect the goods.

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

Leather Products Stores, Inc., rejects a shipment of goods that does not conform to its contract with Manufactured Cowhide Corporation, but is unable to obtain instructions from the seller. Leather Products may

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

Fact Pattern 22-B1 First State Bank issues a letter of credit in favor of Oboe Company, an American firm, to facilitate an international sales contract to buy resources from Lapland Mining, Ltd., a Finnish company. -Refer to Fact Pattern 22-B1. First State Bank must pay Lapland when Lapland

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

If a buyer wrongfully refuses to accept goods that conform to a contract, the seller may recover damages.

Under the UCC, a seller's tender of goods that do not conform in every way to a contract is not a valid tender.

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

Fact Pattern 22-B1 First State Bank issues a letter of credit in favor of Oboe Company, an American firm, to facilitate an international sales contract to buy resources from Lapland Mining, Ltd., a Finnish company. -Refer to Fact Pattern 22-B1. In a letter of credit, the ben?eficiary is

A buyer who accepts conforming goods cannot revoke the acceptance.