Question 1

"Fixture Mishap." Trudy owns a hardware shop that also sells expensive bathroom fixtures. Theresa, a whiz with tools, purchased for $400 some expensive powder room fixtures for her bathroom. Trudy had only one set of the fixtures Theresa wanted. Although Theresa noticed a slight discoloration on one of the faucets, she went ahead with the contract because Trudy indicated that she would remedy the situation should the problem become worse. Because they were friends and attended the same church, Trudy gave Theresa 90 days in which to pay. A month later and before she paid for the fixtures, Theresa called Trudy and told her that the fixtures were corroding, the discoloration had worsened, and the fixtures looked terrible. Trudy told her that she would get replacements, but six months later they had not arrived. Trudy told Theresa that they were on back order. At that point, Theresa purchased fixtures elsewhere for $500 and informed Trudy that she could pick up the corroded fixtures at her front door. Trudy picked up the fixtures. They were obviously defective, but Trudy was able to resell them for $100. Trudy told Theresa that she would have gladly provided fixtures that would not corrode if she had only a bit more time, that Theresa should have given her a chance to do so, and that as far as Trudy is concerned, Theresa owes $300.
-Which of the following most accurately describes the action taken by Theresa?

Accepted Answer

A)   Theresa breached the contract
B)   Theresa revoked acceptance and covered
C)   Theresa canceled the contract and exchanged
D)   Theresa substantially performed
E)   Theresa engaged in a trade modificationF) A) and E)
G) C) and D) B

Question 2

Which of the following is true regarding how the obligations of sellers/lessors and buyers/lessees are determined?

Accepted Answer

A)   Obligations of parties are determined by the terms the parties outline in agreements, but not by custom or rules outlined by the UCC.
B)   Obligations of parties are determined by the rules outlined by the UCC, but not by terms the parties outline in agreements or by custom.
C)   Obligations of parties are determined by terms the parties outline in agreements and rules outlined by the Uniform Commercial Code, but not by custom.
D)   Obligations of parties are determined by the rules outlined by the UCC and by custom, but not by terms the parties outline in agreements.
E)   Obligations of parties are determined by the terms the parties outline in agreements, custom, and rules outlined by the UCC.F) C) and D)
G) A) and B)

Question 3

Under the UCC buyers and lessees may recover goods identified in the contract if the seller or lessor becomes insolvent within ______ after receiving the first payment due under the agreement.

Accepted Answer

A)   5 days
B)   10 days
C)   15 days
D)   30 days
E)   60 daysF) B) and D)
G) A) and D)

Question 4

Which of the following damages, if any, may a seller receive who sells goods to another buyer when the original buyer is in breach?

Accepted Answer

A)   The difference between the resale price and the contract price, plus incidental damages and minus expenses saved.
B)   The difference between the resale price and the contract price only.
C)   The difference between the resale price and the contract price minus expenses without any allowance for incidental damages.
D)   The difference between the resale price and the contract price, plus incidental damages, with no deduction for expenses saved.
E)   Damages are not available because a seller has no rights to resell goods when the original buyer is in breach. The remedy is a suit for damages.F) A) and E)
G) C) and E)

Question 5

Regarding the "Case Opener," what did the court rule regarding the liability of Abbott Industries following its supply of 1.2 million tubes of bad eye medication to Altana, a customer, for resale?

Accepted Answer

A)   That Abbott industries was liable for the cost of the recall and destruction of the defective medication, for the costs of employee overtime, and for lost future sales because Altana was unable to meet its contractual obligations.
B)   That Abbott industries was liable for the cost of the recall and destruction of the defective medication, for the costs of employee overtime, and for lost future sales even though Altana was able to meet its contractual obligations.
C)   That Abbott industries was liable for the cost of the recall and destruction of the defective medication and for the costs of employee overtime, but not for lost future sales because Altana was able to meet its contractual obligations.
D)   That Altana was only entitled to receive cover, meaning substitution for the defective medication.
E)   That Altana was unable to recover anything because business people take a risk that some shipments will be bad.F) C) and D)
G) All of the above

Question 6

Under UCC 2-702(2) , under which of the following circumstances may a seller reclaim goods when a buyer is in possession of goods and is in breach?

Accepted Answer

A)   When the seller discovers the buyer is insolvent
B)   When the buyer is at least 5 days late on a payment
C)   When the buyer is at least 10 days late on a payment
D)   When the buyer has received at least 10 days prior notification of reclamation
E)   When the buyer has received at least 30 days prior notification of reclamationF) B) and E)
G) A) and E)

Question 7

Which of the following is the right of a buyer and lessee to substitute goods for those due under a sales or lease agreement?

Accepted Answer

A)   Swap
B)   Rearrange
C)   Cover
D)   Shift
E)   ReallocateF) A) and C)
G) A) and E)

Question 8

Which of the following was the result in Almetals Inc., v. Wickeder Westfalenstahl, GMBH, the case in the text involving the sale of a specialty metal in which the plaintiff sued the defendant for breach of contract seeking specific performance?

Accepted Answer

A)   That specific performance was unavailable because real estate was not involved.
B)   That specific performance was unavailable because a foreign defendant was involved and jurisdiction for specific performance was, therefore, lacking.
C)   That specific performance was unavailable because the goods at issue were scarce.
D)   That specific performance was unavailable because a requirements contract was involved.
E)   That specific performance was the appropriate remedy because the goods at issue were unique with no known alternative sources of supply.F) D) and E)
G) A) and B)

Question 9

What is the basic premise of contract law?

Accepted Answer

A)   To effectuate the expectations of the parties to an agreement
B)   To promote commerce
C)   To promote economic growth
D)   To promote interstate commerce
E)   To encourage a free-market society and greater financial security for the partiesF) A) and E)
G) B) and E)

Question 10

What does the UCC provide regarding the availability of punitive damages?

Accepted Answer

A)   That the nonbreaching seller may claim against a breaching buyer who is guilty of malice 20 percent of the purchase price or $500, whichever is less, as punitive damages.
B)   That the nonbreaching seller may claim against a breaching buyer who is guilty of malice 20 percent of the purchase price or $500, whichever is more, as punitive damages.
C)   That the nonbreaching seller may claim against a breaching buyer who is guilty of malice 30 percent of the purchase price or $1,000, whichever is less, as punitive damages.
D)   That the nonbreaching seller may claim against a breaching buyer who is guilty of malice 30 percent of the purchase price or $1,000, whichever is more, as punitive damages.
E)   Nothing other than in its voiding of liquidated damages that are punitive in nature.F) A) and B)
G) A) and C)

Question 11

What was the result on appeal in Figgie International Inc., v. Destileria Serralles Inc, the case in the text involving a dispute over bottle-labeling equipment that did not perform as expected and whether usage of trade limited the buyer's remedy to repair, replacement, or return?

Accepted Answer

A)   The court ruled that the remedy of repair, replacement, or a refund failed of its essential purpose and that the buyer was therefore not limited to that remedy.
B)   The court ruled that the remedy of repair, replacement, or a refund did not fail of its essential purpose, and the remedy was enforced.
C)   The remedy of repair, replacement, or a refund was found unconscionable and not enforced.
D)   The remedy of repair, replacement, or a refund was found unconscionable but enforced anyway.
E)   The remedy of repair, replacement, or a refund was not enforced because usage of trade may not supplement a contract.F) D) and E)
G) A) and B)

Question 12

Liquidated damages are identified after a contract breach occurs.

Accepted Answer

A) True 
 B)False  False

Question 13

What are the rights of the parties under the UCC to provide for remedies in addition to those provided by the UCC?

Accepted Answer

A)   Parties to a commercial sales agreement may provide for remedies in addition to those provided by the UCC.
B)   Parties to a commercial sales agreement may not provide for remedies in addition to those provided by the UCC.
C)   Parties to a commercial sales agreement may provide for remedies in addition to those provided by the UCC only if both sides are represented by an attorney.
D)   Parties to a commercial sales agreement may provide for remedies in addition to those provided by the UCC only if both parties are merchants.
E)   Parties to a commercial sales agreement may provide for remedies in addition to those provided by the UCC only in transactions involving over $10,000 in value.F) A) and E)
G) D) and E)

Question 14

Which of the following is true regarding revocation of accepted nonconforming goods?

Accepted Answer

A)   Once goods have been accepted, they may not be rejected.
B)   A buyer has an absolute right within 10 days after delivery in which to revoke acceptance of nonconforming goods.
C)   A buyer has an absolute right within 48 hours after delivery in which to revoke acceptance of nonconforming goods.
D)   A buyer has an absolute right within 30 days after delivery in which to revoke acceptance of nonconforming goods.
E)   While there is no set time limit, the UCC sometimes allows a buyer to revoke acceptance of nonconforming goods.F) C) and E)
G) A) and D)

Question 15

If a buyer accepts nonconforming goods, the buyer may not also seek damages.

Accepted Answer

A) True 
 B)False

Question 16

"Refused Furniture." Selina arranges to sell furniture from her furniture store to Roland for $3,000. Roland was supposed to give Selina a $500 deposit on February 1 and pay the remainder in monthly installments. Selina was to deliver the furniture by February 7. Roland did not pay Selina as promised on February 1. He asked her to wait until March 1, but she refused. She told him that the contract was canceled, and she refused to deliver the furniture at all. Selina was able to sell the furniture for only $2,500 because of a downturn in the economy. Roland told Selina that she had no right to withhold or sell his furniture and that he was suing. Selina also incurred $100 in additional amounts in advertising costs to advertise the furniture that Roland initially purchased. Selina saved $40 in delivery costs because she did not have to deliver the furniture to Roland. The subsequent purchaser picked up her own furniture.
 
-Which of the following is true regarding Roland's claim that Selina had no right to withhold his furniture?

Accepted Answer

A)   Roland is correct. Selina was required to deliver the furniture, but she retained the right to sue him for any deficiency.
B)   Roland is correct but only because of the special UCC exception for consumer goods.
C)   Roland is incorrect. Selina had a right to withhold the furniture.
D)   Roland is incorrect but only if Selina can prove that she had no reason to believe that he was a credit risk prior to signing the contract of sale.
E)   Roland is correct because of federal consumer protection laws.F) A) and B)
G) A) and C)

Question 17

Bernice purchased a new trampoline from ABC Trampolines. The purchase agreement signed provided that she released ABC Trampolines from any consequential damages for personal injury. Unfortunately, the trampoline ripped while she was using it causing Bernice to fall and break her leg. She asked ABC for damages but the manager refused. The manager referenced her agreement whereby she signed away her rights to consequential damages for personal injury. Is the manager right, and why or why not?

Accepted Answer

The manager is incorrect because while under the UCC the parties may limit damages, a limitation of consequential damages for injury to the person in the case of consumer goods is prima facie unconscionable.

Question 18

What does the UCC provide regarding liquidated damages if the parties do not agree to them?

Accepted Answer

A)   That the nonbreaching seller may claim against a breaching buyer 20 percent of the purchase price or $500, whichever is less, as liquidated damages.
B)   That the nonbreaching seller may claim against a breaching buyer 20 percent of the purchase price or $500, whichever is more, as liquidated damages.
C)   That the nonbreaching seller may claim against a breaching buyer 30 percent of the purchase price or $1,000, whichever is less, as liquidated damages.
D)   That the nonbreaching seller may claim against a breaching buyer 30 percent of the purchase price or $1,000, whichever is more, as liquidated damages.
E)   Nothing because liquidated damages are unavailable under the UCC unless the parties have expressly agreed to them.F) None of the above
G) A) and E)

Question 19

"Refused Furniture." Selina arranges to sell furniture from her furniture store to Roland for $3,000. Roland was supposed to give Selina a $500 deposit on February 1 and pay the remainder in monthly installments. Selina was to deliver the furniture by February 7. Roland did not pay Selina as promised on February 1. He asked her to wait until March 1, but she refused. She told him that the contract was canceled, and she refused to deliver the furniture at all. Selina was able to sell the furniture for only $2,500 because of a downturn in the economy. Roland told Selina that she had no right to withhold or sell his furniture and that he was suing. Selina also incurred $100 in additional amounts in advertising costs to advertise the furniture that Roland initially purchased. Selina saved $40 in delivery costs because she did not have to deliver the furniture to Roland. The subsequent purchaser picked up her own furniture.
 
-Which of the following is true regarding Roland's claim that Selina had no right to sell the furniture he initially purchased?

Accepted Answer

A)   Roland is correct. Selina had no right to sell the furniture, but she retained the right to sue him for any deficiency.
B)   Roland is correct but only because of the special UCC exception for consumer goods.
C)   Roland is incorrect. Selina had a right to resell the furniture.
D)   Roland is incorrect but only if Selina can prove that she had no reason to believe that he was a credit risk prior to signing the contract of sale.
E)   Roland is correct because of federal consumer protection laws.F) C) and E)
G) A) and C)

Question 20

Discuss when specific performance is available as a remedy against a seller or lessor when the sale of goods is involved, and what is involved if specific performance is decreed.

Accepted Answer

UCC Sections 2-716(1) and 2A-521(1) allo...

Exam 24: Remedies for Breach of Sales and Lease Contracts

Correct Answer
verified
B

Which of the following is true regarding how the obligations of sellers/lessors and buyers/lessees are determined?

Correct Answer
verified

Under the UCC buyers and lessees may recover goods identified in the contract if the seller or lessor becomes insolvent within ______ after receiving the first payment due under the agreement.

Correct Answer
verified

Which of the following damages, if any, may a seller receive who sells goods to another buyer when the original buyer is in breach?

Correct Answer
verified

Regarding the "Case Opener," what did the court rule regarding the liability of Abbott Industries following its supply of 1.2 million tubes of bad eye medication to Altana, a customer, for resale?

Correct Answer
verified

Under UCC 2-702(2) , under which of the following circumstances may a seller reclaim goods when a buyer is in possession of goods and is in breach?

Correct Answer
verified

Which of the following is the right of a buyer and lessee to substitute goods for those due under a sales or lease agreement?

Correct Answer
verified

Which of the following was the result in Almetals Inc., v. Wickeder Westfalenstahl, GMBH, the case in the text involving the sale of a specialty metal in which the plaintiff sued the defendant for breach of contract seeking specific performance?

Correct Answer
verified

What is the basic premise of contract law?

Correct Answer
verified

What does the UCC provide regarding the availability of punitive damages?

Correct Answer
verified

What was the result on appeal in Figgie International Inc., v. Destileria Serralles Inc, the case in the text involving a dispute over bottle-labeling equipment that did not perform as expected and whether usage of trade limited the buyer's remedy to repair, replacement, or return?

Correct Answer
verified

Liquidated damages are identified after a contract breach occurs.

Correct Answer
verified
False

What are the rights of the parties under the UCC to provide for remedies in addition to those provided by the UCC?

Correct Answer
verified

Which of the following is true regarding revocation of accepted nonconforming goods?

Correct Answer
verified

If a buyer accepts nonconforming goods, the buyer may not also seek damages.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The manager is incorrect because while under the UCC the parties may limit damages, a limitation of consequential damages for injury to the person in the case of consumer goods is prima facie unconscionable.

What does the UCC provide regarding liquidated damages if the parties do not agree to them?

Correct Answer
verified

Correct Answer
verified

Discuss when specific performance is available as a remedy against a seller or lessor when the sale of goods is involved, and what is involved if specific performance is decreed.

Correct Answer
verified
UCC Sections 2-716(1) and 2A-521(1) allo...
View Answer

Exam 24: Remedies for Breach of Sales and Lease Contracts

Correct AnswerverifiedB

Which of the following is true regarding how the obligations of sellers/lessors and buyers/lessees are determined?

Correct AnswerverifiedShow Answer

Under the UCC buyers and lessees may recover goods identified in the contract if the seller or lessor becomes insolvent within ______ after receiving the first payment due under the agreement.

Correct AnswerverifiedShow Answer

Which of the following damages, if any, may a seller receive who sells goods to another buyer when the original buyer is in breach?

Correct AnswerverifiedShow Answer

Regarding the "Case Opener," what did the court rule regarding the liability of Abbott Industries following its supply of 1.2 million tubes of bad eye medication to Altana, a customer, for resale?

Correct AnswerverifiedShow Answer

Under UCC 2-702(2) , under which of the following circumstances may a seller reclaim goods when a buyer is in possession of goods and is in breach?

Correct AnswerverifiedShow Answer

Which of the following is the right of a buyer and lessee to substitute goods for those due under a sales or lease agreement?

Correct AnswerverifiedShow Answer

Which of the following was the result in Almetals Inc., v. Wickeder Westfalenstahl, GMBH, the case in the text involving the sale of a specialty metal in which the plaintiff sued the defendant for breach of contract seeking specific performance?

Correct AnswerverifiedShow Answer

What is the basic premise of contract law?

Correct AnswerverifiedShow Answer

What does the UCC provide regarding the availability of punitive damages?

Correct AnswerverifiedShow Answer

What was the result on appeal in Figgie International Inc., v. Destileria Serralles Inc, the case in the text involving a dispute over bottle-labeling equipment that did not perform as expected and whether usage of trade limited the buyer's remedy to repair, replacement, or return?

Correct AnswerverifiedShow Answer

Liquidated damages are identified after a contract breach occurs.

Correct AnswerverifiedFalse

What are the rights of the parties under the UCC to provide for remedies in addition to those provided by the UCC?

Correct AnswerverifiedShow Answer

Which of the following is true regarding revocation of accepted nonconforming goods?

Correct AnswerverifiedShow Answer

If a buyer accepts nonconforming goods, the buyer may not also seek damages.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe manager is incorrect because while under the UCC the parties may limit damages, a limitation of consequential damages for injury to the person in the case of consumer goods is prima facie unconscionable.

What does the UCC provide regarding liquidated damages if the parties do not agree to them?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Discuss when specific performance is available as a remedy against a seller or lessor when the sale of goods is involved, and what is involved if specific performance is decreed.

Correct AnswerverifiedUCC Sections 2-716(1) and 2A-521(1) allo...View AnswerShow Answer

Correct Answer
verified
B

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
False

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The manager is incorrect because while under the UCC the parties may limit damages, a limitation of consequential damages for injury to the person in the case of consumer goods is prima facie unconscionable.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
UCC Sections 2-716(1) and 2A-521(1) allo...
View Answer