Question 1

The substantial-impairment requirement is meant to prevent a party from canceling a contract due to trivial defects.

Accepted Answer

A) True 
 B)False

Question 2

Sometimes language in the parties' agreement limits the rigidity of the perfect tender rule.

Accepted Answer

A) True 
 B)False

Question 3

According to the case of Hubbard v. UTZ Quality Foods, Inc., whether goods conform to contract terms is a ________.

Accepted Answer

A)  question only a jury can decide 
B)  question of mixed law and fact 
C)  question of law 
D)  question of fact 
E)  question of fact unless an installment contract is involved in which case it is a question of law 
A)  question only a jury can decide 
B)  question of mixed law and fact 
C)  question of law 
D)  question of fact 
E)  question of fact unless an installment contract is involved in which case it is a question of law

Question 4

Courts and the UCC drafters have created exceptions to the perfect tender rule that helps reduce the rule's rigidity.

Accepted Answer

A) True 
 B)False

Question 5

Under the UCC, a delay in delivery or nondelivery, in whole or in part, is not a breach in circumstances in which performance has been made impracticable ________.

Accepted Answer

A)  because the buyer refuses to perform. 
B)  because the parties contemplated an out due to the nature of the goods. 
C)  Because the performance is now economically unsound 
D)  because a contingency has occurred that was not contemplated when the parties reached the agreement 
E)  because the seller refuses to receive the goods. 
A)  because the buyer refuses to perform. 
B)  because the parties contemplated an out due to the nature of the goods. 
C)  Because the performance is now economically unsound 
D)  because a contingency has occurred that was not contemplated when the parties reached the agreement 
E)  because the seller refuses to receive the goods.

Question 6

Under the UCC, ________ requires that the seller/lessor have and hold conforming goods at the disposal of the buyer/lessee and give the buyer/lessee reasonable notification to enable him or her to take delivery.

Accepted Answer

A)  Tender of delivery 
B)  Offer of availability 
C)  Tender of offer 
D)  Offer of delivery 
E)  Offer of notification 
A)  Tender of delivery 
B)  Offer of availability 
C)  Tender of offer 
D)  Offer of delivery 
E)  Offer of notification

Question 7

LaTisha contracted with Marco, who operates a farm in Guatemala, for the importation of some great coffee beans for her coffee shop. The contract provided that Marco would be sure the coffee arrived by September 1st, in time for an open house LaTisha had planned. LaTisha was not worried because Marco had always delivered on a timely basis in the past. Marco was busy and was late getting the beans in transit. The beans did not arrive until September 2nd. LaTisha shipped them back and refused to pay. Marco sued. What is LaTisha 's best defense?

Accepted Answer

A)  That Marco failed to substantially perform. 
B)  That Marco failed to materially perform. 
C)  That Marco violated the perfect tender rule. 
D)  That Marco beans were not that good and that she decided to go with another brand. 
E)  She has no defense because he was only one day late, and she should pay. 
A)  That Marco failed to substantially perform. 
B)  That Marco failed to materially perform. 
C)  That Marco violated the perfect tender rule. 
D)  That Marco beans were not that good and that she decided to go with another brand. 
E)  She has no defense because he was only one day late, and she should pay.

Question 8

If Dominique ordered lobsters from Maine for a catered affair and a hurricane hits the Maine coast line, what rule may allow the seller a defense to a breach of contract claim?

Accepted Answer

A)  Commercial impracticability. 
B)  Course of dealing. 
C)  Course of performance. 
D)  Performance inability. 
E)  Buyer beware. 
A)  Commercial impracticability. 
B)  Course of dealing. 
C)  Course of performance. 
D)  Performance inability. 
E)  Buyer beware.

Question 9

Felipe who is a commercial buyer decides to reject goods he was purchasing from Saul. What kind of notice must be provided to Saul by Felipe?

Accepted Answer

A)  written notice sent within 10 days. 
B)  written notice sent within 5 days. 
C)  reasonable notice. 
D)  oral or written notice as long as notice is given in 7 days. 
E)  perfect notice prepared on a UCC form. 
A)  written notice sent within 10 days. 
B)  written notice sent within 5 days. 
C)  reasonable notice. 
D)  oral or written notice as long as notice is given in 7 days. 
E)  perfect notice prepared on a UCC form.

Question 10

Which of the following is true about the Uniform Computer Information Transactions Act (UCITA)?

Accepted Answer

A)  UCITA has been passed by all fifty states. 
B)  UCITA ensures perfect tender rules apply to all software. 
C)  UCITA is silent about rejection of defective products 
D)  Software vendors are generally not in favor of UCITA because it would disrupt their industry. 
E)  Software vendors are in favor of UCITA because it would protect software vendors. 
A)  UCITA has been passed by all fifty states. 
B)  UCITA ensures perfect tender rules apply to all software. 
C)  UCITA is silent about rejection of defective products 
D)  Software vendors are generally not in favor of UCITA because it would disrupt their industry. 
E)  Software vendors are in favor of UCITA because it would protect software vendors.

Question 11

[Brea's Berries] Brea, a berry farmer, regularly supplies berries under an installment contract to Zelda's, a manufacturer of frozen desserts. Zelda's prefers its berries to be large, to provide the best quality for its products, and mandated that the contract contain a provision that each berry needed to be at least one inch in length. Zelda's rejected the latest shipment of berries, claiming that the majority of the berries did not meet the requisite length. Brea argues that Zelda cannot reject the entire shipment because it is only a trivial detail. Zelda responds that the size constitutes a substantial impairment in the goods and will make her products less desirable. She tells Brea she's cancelling the contract because she has to quickly find another supplier in order to complete a large order.
-Can Zelda reject the shipment because of the size?

Accepted Answer

A)  Yes, because of the perfect tender rule and no exception applies. 
B)  No, because failure to meet the proper size standard would never constitute a substantial impairment. 
C)  Yes, because failure to meet the proper size standard may constitute a substantial impairment, especially in light of the contract provision about berry size. 
D)  No, because she cancel a contract for trivial defects. 
E)  No, a buyer has no right to reject a shipment based on subjective factors, such as inappropriate size. 
A)  Yes, because of the perfect tender rule and no exception applies. 
B)  No, because failure to meet the proper size standard would never constitute a substantial impairment. 
C)  Yes, because failure to meet the proper size standard may constitute a substantial impairment, especially in light of the contract provision about berry size. 
D)  No, because she cancel a contract for trivial defects. 
E)  No, a buyer has no right to reject a shipment based on subjective factors, such as inappropriate size.

Question 12

[New Furniture] Kristin purchased $2,000 worth of furniture from Solid Wood Furniture. Through an arrangement with Solid Wood, Kristin financed the purchase through a financing company called Let Us Help You. Twenty-nine days after the goods were delivered to her, Kristin had a disagreement with Let Us Help You regarding the amount of interest she would be required to pay. She notified Solid Wood on that day that she was rejecting the goods. Solid Wood claimed that she did not properly reject the furniture and also that she failed to act in good faith, an obligation imposed equally on all parties to a transaction. Kristin says that she properly rejected; that, although the UCC imposes no duty of good faith, she acted in good faith; and that, in any event, she had an absolute right to return the goods.
-Which statement is true regarding Kristin's claim that the UCC imposes no obligation of good faith conduct?

Accepted Answer

A)  Kristin is correct in this instance because while the UCC generally imposes a duty of good faith, that duty is inapplicable during the initial 30 days after a purchase when a buyer has the right to revoke acceptance for a good or a bad reason. 
B)  Kristin is correct in this instance because while the UCC generally imposes a duty of good faith, that duty is inapplicable in relation to third-party financing. 
C)  Kristin is correct only if she can establish that the goods were overpriced resulting in the right to disregard any obligation of Solid Wood. 
D)  Kristin is correct only if she can establish that Solid Wood Furniture itself failed to act in good faith. 
E)  Kristin is incorrect. 
A)  Kristin is correct in this instance because while the UCC generally imposes a duty of good faith, that duty is inapplicable during the initial 30 days after a purchase when a buyer has the right to revoke acceptance for a good or a bad reason. 
B)  Kristin is correct in this instance because while the UCC generally imposes a duty of good faith, that duty is inapplicable in relation to third-party financing. 
C)  Kristin is correct only if she can establish that the goods were overpriced resulting in the right to disregard any obligation of Solid Wood. 
D)  Kristin is correct only if she can establish that Solid Wood Furniture itself failed to act in good faith. 
E)  Kristin is incorrect.

Question 13

Under the perfect tender rule, there is no distinction between material and immaterial contractual requirements.

Accepted Answer

A) True 
 B)False

Question 14

The concept of good faith and fair dealing governs the inspection process.

Accepted Answer

A) True 
 B)False

Question 15

The UCC requires reasonable commercial standards of fair dealing in addition to ________ when parties are merchants.

Accepted Answer

A)  honesty in equity 
B)  honesty in law 
C)  honesty in fact 
D)  honesty in equity and also reasonable commercial standards of fair dealing 
E)  honesty in equity and honesty in law 
A)  honesty in equity 
B)  honesty in law 
C)  honesty in fact 
D)  honesty in equity and also reasonable commercial standards of fair dealing 
E)  honesty in equity and honesty in law

Question 16

Which of the following is false regarding the perfect tender rule?

Accepted Answer

A)  In relation to the perfect tender rule, sometimes norms for a particular trade do not permit a buyer to reject goods with minor flaws. 
B)  In relation to the perfect tender rule, the UCC requires that courts consider course of dealing. 
C)  In relation to the perfect tender rule, the UCC requires that courts consider course of performance. 
D)  Parties may by contractual language limit the rigidity of the perfect tender rule. 
E)  The perfect tender rule is satisfied when material elements of a contract are satisfied even if some nonmaterial elements may not be satisfied. 
A)  In relation to the perfect tender rule, sometimes norms for a particular trade do not permit a buyer to reject goods with minor flaws. 
B)  In relation to the perfect tender rule, the UCC requires that courts consider course of dealing. 
C)  In relation to the perfect tender rule, the UCC requires that courts consider course of performance. 
D)  Parties may by contractual language limit the rigidity of the perfect tender rule. 
E)  The perfect tender rule is satisfied when material elements of a contract are satisfied even if some nonmaterial elements may not be satisfied.

Question 17

Which statement is correct regarding similarities between American and European contract law?

Accepted Answer

A)  U.S. law is provided guidance through statutory enactments known as the Restatements of the Law, but European law relies entirely on the CISG. 
B)  U.S. law is provided guidance through the UCC, a federal statutory enactment, but European law relies entirely on the CISG. 
C)  U.S. law finds guidance in the Restatements of the Law constituting soft law, not statutory enactments; and Europe has begun crafting its own version of the U.S. Restatement of Contracts. 
D)  U.S. law finds guidance in the Restatements of the Law constituting soft law, not statutory enactments, but Europe has refused to consider crafting its own version of the U.S. Restatement of Contracts. 
E)  U.S. law finds guidance in the Restatements of the Law constituting soft law, not statutory enactments; and Europe has disavowed the CISG choosing to follow a code similar to the U.S. Restatements of the Law. 
A)  U.S. law is provided guidance through statutory enactments known as the Restatements of the Law, but European law relies entirely on the CISG. 
B)  U.S. law is provided guidance through the UCC, a federal statutory enactment, but European law relies entirely on the CISG. 
C)  U.S. law finds guidance in the Restatements of the Law constituting soft law, not statutory enactments; and Europe has begun crafting its own version of the U.S. Restatement of Contracts. 
D)  U.S. law finds guidance in the Restatements of the Law constituting soft law, not statutory enactments, but Europe has refused to consider crafting its own version of the U.S. Restatement of Contracts. 
E)  U.S. law finds guidance in the Restatements of the Law constituting soft law, not statutory enactments; and Europe has disavowed the CISG choosing to follow a code similar to the U.S. Restatements of the Law.

Question 18

[New Furniture] Kristin purchased $2,000 worth of furniture from Solid Wood Furniture. Through an arrangement with Solid Wood, Kristin financed the purchase through a financing company called Let Us Help You. Twenty-nine days after the goods were delivered to her, Kristin had a disagreement with Let Us Help You regarding the amount of interest she would be required to pay. She notified Solid Wood on that day that she was rejecting the goods. Solid Wood claimed that she did not properly reject the furniture and also that she failed to act in good faith, an obligation imposed equally on all parties to a transaction. Kristin says that she properly rejected; that, although the UCC imposes no duty of good faith, she acted in good faith; and that, in any event, she had an absolute right to return the goods.
-Which statement is true regarding both the UCC and common law with regard to conforming and nonconforming goods?

Accepted Answer

A)  Under the UCC and common law, if goods fail in any respect to conform to the contract, the buyer has the right to accept the goods, reject the entire shipment, or accept part and reject part. 
B)  The perfect tender rule recognizes the distinction between material and immaterial contractual requirements. 
C)  Both the UCC and common law recognize the distinction between material and immaterial contractual requirements. 
D)  Common law usually substitutes perfect tender with the doctrine of substantial performance. 
E)  Under common law, if goods fail in any respect to conform to the contract, the buyer has the right to accept the goods, reject the entire shipment, or accept part and reject part. 
A)  Under the UCC and common law, if goods fail in any respect to conform to the contract, the buyer has the right to accept the goods, reject the entire shipment, or accept part and reject part. 
B)  The perfect tender rule recognizes the distinction between material and immaterial contractual requirements. 
C)  Both the UCC and common law recognize the distinction between material and immaterial contractual requirements. 
D)  Common law usually substitutes perfect tender with the doctrine of substantial performance. 
E)  Under common law, if goods fail in any respect to conform to the contract, the buyer has the right to accept the goods, reject the entire shipment, or accept part and reject part.

Question 19

Typically, buyers and lessees ordinarily inspects goods ________ paying, unless the parties agree otherwise.

Accepted Answer

A)  before 
B)  immediately after 
C)  within 24 hours after 
D)  within 48 hours after 
E)  within 7 days after 
A)  before 
B)  immediately after 
C)  within 24 hours after 
D)  within 48 hours after 
E)  within 7 days after

Question 20

[Brea's Berries] Brea, a berry farmer, regularly supplies berries under an installment contract to Zelda's, a manufacturer of frozen desserts. Zelda's prefers its berries to be large, to provide the best quality for its products, and mandated that the contract contain a provision that each berry needed to be at least one inch in length. Zelda's rejected the latest shipment of berries, claiming that the majority of the berries did not meet the requisite length. Brea argues that Zelda cannot reject the entire shipment because it is only a trivial detail. Zelda responds that the size constitutes a substantial impairment in the goods and will make her products less desirable. She tells Brea she's cancelling the contract because she has to quickly find another supplier in order to complete a large order.
-Assuming the berries are nonconforming, can Zelda simply cancel the contract?

Accepted Answer

A)  No, a buyer has no right to cancel a contract without giving the seller a chance to cure. 
B)  No, although a buyer has a right to cancel a contract, Zelda must provide the seller a chance to cure. 
C)  Yes, when goods are nonconforming, a buyer may reject goods and cancel the contract if a condition such as time being of the essence is present. 
D)  No, even though the goods are nonconforming, Zelda may not cancel the contract. 
E)  Yes, a buyer has the right to cancel the contract. 
A)  No, a buyer has no right to cancel a contract without giving the seller a chance to cure. 
B)  No, although a buyer has a right to cancel a contract, Zelda must provide the seller a chance to cure. 
C)  Yes, when goods are nonconforming, a buyer may reject goods and cancel the contract if a condition such as time being of the essence is present. 
D)  No, even though the goods are nonconforming, Zelda may not cancel the contract. 
E)  Yes, a buyer has the right to cancel the contract.

Exam 23: Performance and Obligations Under Sales and Leases

The substantial-impairment requirement is meant to prevent a party from canceling a contract due to trivial defects.

Sometimes language in the parties' agreement limits the rigidity of the perfect tender rule.

According to the case of Hubbard v. UTZ Quality Foods, Inc., whether goods conform to contract terms is a ________.

Courts and the UCC drafters have created exceptions to the perfect tender rule that helps reduce the rule's rigidity.

Under the UCC, a delay in delivery or nondelivery, in whole or in part, is not a breach in circumstances in which performance has been made impracticable ________.

Under the UCC, ________ requires that the seller/lessor have and hold conforming goods at the disposal of the buyer/lessee and give the buyer/lessee reasonable notification to enable him or her to take delivery.

If Dominique ordered lobsters from Maine for a catered affair and a hurricane hits the Maine coast line, what rule may allow the seller a defense to a breach of contract claim?

Felipe who is a commercial buyer decides to reject goods he was purchasing from Saul. What kind of notice must be provided to Saul by Felipe?

Which of the following is true about the Uniform Computer Information Transactions Act (UCITA)?

Under the perfect tender rule, there is no distinction between material and immaterial contractual requirements.

The concept of good faith and fair dealing governs the inspection process.

The UCC requires reasonable commercial standards of fair dealing in addition to ________ when parties are merchants.

Which of the following is false regarding the perfect tender rule?

Which statement is correct regarding similarities between American and European contract law?

Typically, buyers and lessees ordinarily inspects goods ________ paying, unless the parties agree otherwise.

An Introduction to Dynamic Business Law

Business Ethics

The Us Legal System

Alternative Dispute Resolution

Constitutional Principles

International and Comparative Law

Crime and the Business Community

Tort Law

Negligence and Strict Liability

Product Liability

Liability of Accountants and Other Professionals

Intellectual Property

Introduction to Contracts

Agreement

Consideration

Capacity and Legality

Legal Assent

Contracts in Writing

Third-Party Rights to Contracts

Discharge and Remedies

Introduction to Sales and Lease Contracts

Title, Risk of Loss, and Insurable Interest

Remedies for Breach of Sales and Lease Contracts

Warranties

Negotiable Instruments: Negotiability and Transferability

Negotiation, Holder in Due Course, and Defenses

Liability, Defenses, and Discharge

Checks and Electronic Fund Transfers

Secured Transactions

Other Creditors Remedies and Suretyship

Bankruptcy and Reorganization

Agency Formation and Duties

Liability to Third Parties and Termination

Forms of Business Organization

Partnerships: Nature, Formation, and Operation

Partnerships: Termination and Limited Partnerships

Corporations: Formation and Financing

Corporations: Directors, Officers, and Shareholders

Corporations: Mergers, Consolidations, Terminations

Corporations: Securities and Investor Protection

Employment and Labor Law

Employment Discrimination

Administrative Law

Consumer Law

Environmental Law

Antitrust Law

The Nature of Property, Personal Property, and Bailments

Real Property

Landlord-Tenant Law

Insurance Law

Wills and Trusts

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