Question 1

How does the position of the UCC compare with the common law in regard to the perfect tender rule?

Accepted Answer

A)  The UCC and common law differ with the UCC requiring perfect tender and common law requiring the lesser standard of substantial performance. 
B)  The UCC and common law differ with the UCC requiring perfect tender and common law requiring the lesser standard of material performance. 
C)  The UCC and common law differ with the UCC requiring the lesser standard of material performance and common law requiring perfect tender. 
D)  The UCC and common law differ with the UCC requiring the lesser standard of substantial performance and common law requiring perfect tender. 
E)  They are the same. 
A)  The UCC and common law differ with the UCC requiring perfect tender and common law requiring the lesser standard of substantial performance. 
B)  The UCC and common law differ with the UCC requiring perfect tender and common law requiring the lesser standard of material performance. 
C)  The UCC and common law differ with the UCC requiring the lesser standard of material performance and common law requiring perfect tender. 
D)  The UCC and common law differ with the UCC requiring the lesser standard of substantial performance and common law requiring perfect tender. 
E)  They are the same.

Question 2

[Business Law Rocks] Business law instructor Courtney ordered 50 T-shirts for her classes that said "Business Law Rocks" on the front. She wanted to distribute them on the last day of class and contracted with Tyler, who owned a T-shirt business, for the shirts to arrive by that day. The shirts arrived on Thursday, the day before the last class on Friday. Unfortunately, the shirts said "Business Law Yuck" on the front. Tyler told Courtney that he would remedy and fix the problem and that he had the right to do so. She told him, however, that she had to have the shirts the next day because the students would be gone after that. Courtney had also ordered some pamphlets on employment law to be used the next fall semester. The seller had agreed to provide the pamphlets 30 days before spring semester ended. The seller, however, erred and sent pamphlets on environmental law, which arrived 28 days before spring semester ended. The seller attempted to remedy the problem by sending the correct pamphlets on employment law, but they did not arrive until 27 days before spring semester ended. None of the parties had any prior dealings.
-Is Tyler correct that he has a right to remedy and fix the problem?

Accepted Answer

A)  No, the UCC does not provide a party with the right to fix any problem. 
B)  No, while the UCC provides a party with the right to fix some problems, the problems with the T-shirts were too serious to afford Tyler that right. 
C)  Yes, but only if he can provide correctly worded T-shirts by the next day, the last day set for performance. 
D)  Yes, Tyler has up to 10 days under the UCC to fix any problem. 
E)  Yes, Tyler has up to 20 days under the UCC to fix any problem. 
A)  No, the UCC does not provide a party with the right to fix any problem. 
B)  No, while the UCC provides a party with the right to fix some problems, the problems with the T-shirts were too serious to afford Tyler that right. 
C)  Yes, but only if he can provide correctly worded T-shirts by the next day, the last day set for performance. 
D)  Yes, Tyler has up to 10 days under the UCC to fix any problem. 
E)  Yes, Tyler has up to 20 days under the UCC to fix any problem.

Question 3

The UCC defines course of dealing as ________

Accepted Answer

A)  the trading norm of an industry. 
B)  the transactions of how industry handles the course of dealing. 
C)  the course of performance of an industry. 
D)  previous commercial transactions between the same parties. 
E)  the course of dealings between industries within a specific region. 
A)  the trading norm of an industry. 
B)  the transactions of how industry handles the course of dealing. 
C)  the course of performance of an industry. 
D)  previous commercial transactions between the same parties. 
E)  the course of dealings between industries within a specific region.

Question 4

When may a buyer revoke acceptance if a nonconformity substantially impairs the value of goods?

Accepted Answer

A)  For any reason within 24 hours of acceptance. 
B)  For any reason within 48 hours of acceptance. 
C)  For any reason within 7 days of acceptance. 
D)  For any reason within 30 days of acceptance. 
E)  Only if the buyer had a legitimate reason for the initial acceptance. 
A)  For any reason within 24 hours of acceptance. 
B)  For any reason within 48 hours of acceptance. 
C)  For any reason within 7 days of acceptance. 
D)  For any reason within 30 days of acceptance. 
E)  Only if the buyer had a legitimate reason for the initial acceptance.

Question 5

What did the court rule in the case of Hubbard v. UTZ Quality Foods, Inc., in which the buyer refused on the basis of color to accept potatoes that were the subject of an installment contract?

Accepted Answer

A)  That the failure to meet the proper color standard was not a substantial impairment. 
B)  That the failure to meet the proper color standard was a substantial impairment but that it did not impair the contract. 
C)  That the failure to meet the proper color standard amounted to a substantial impairment of the installments, substantially impairing the whole contract. 
D)  That the refusal to accept the potatoes was made in bad faith. 
E)  That the tendering of the potatoes was made in bad faith. 
A)  That the failure to meet the proper color standard was not a substantial impairment. 
B)  That the failure to meet the proper color standard was a substantial impairment but that it did not impair the contract. 
C)  That the failure to meet the proper color standard amounted to a substantial impairment of the installments, substantially impairing the whole contract. 
D)  That the refusal to accept the potatoes was made in bad faith. 
E)  That the tendering of the potatoes was made in bad faith.

Question 6

[Toshi's Dolls] Toshi owns a specialty doll store and purchases dolls regularly from Yolanda, a doll distributor. For the past few years, Toshi and Yolanda have signed yearly contracts that set forth the terms of the agreement. Although delivery terms are set forth in the agreement, if the delivery comes a day or two late or if Yolanda substitutes doll purses for shoes, Toshi does not complain, as she knows the next shipment will have more shoes than purses. Yolanda has added a new line of designer dolls, and Yolanda asks Toshi to sign a separate agreement with regard to the new doll line which includes a clause that accessories must conform to the order only as to quantity. Toshi's first order of the new line includes a large shipment of dolls and doll purses, but no doll shoes. The first delivery of the new doll line is scheduled to arrive on December 1, however, it arrives on December 2 and includes very few doll shoes and instead includes many doll purses. Yolanda refuses to accept the late shipment and calls Toshi to complain and also tells her that some of the dolls have ugly faces and she is worried they will not sell. Yolanda says that Toshi's been in the doll industry for years and should know that some dolls have flaws on their faces and she has to accept the dolls faces as they are.
-Can Toshi reject the dolls with minor facial flaws?

Accepted Answer

A)  No, as long as they substantially conform to the contract specifications 
B)  Yes, because they do not conform to the contract specifications 
C)  No, if it is the norm in the doll industry not to permit a buyer to reject dolls with minor flaws 
D)  Yes, because they are not perfect, under the perfect tender rule 
E)  Yes, because a buyer does not have to accept goods with flaws 
A)  No, as long as they substantially conform to the contract specifications 
B)  Yes, because they do not conform to the contract specifications 
C)  No, if it is the norm in the doll industry not to permit a buyer to reject dolls with minor flaws 
D)  Yes, because they are not perfect, under the perfect tender rule 
E)  Yes, because a buyer does not have to accept goods with flaws

Question 7

[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 correct regarding Solid Wood's contention that the duty of good faith is imposed on all parties equally?

Accepted Answer

A)  Solid Wood is incorrect because the UCC imposes no duty of good faith. 
B)  Solid Wood is incorrect because the UCC mandated duty of good faith requires honesty in fact in regard to all transactions regardless of the parties involved. 
C)  Solid Wood is incorrect because the UCC mandated duty of good faith imposes a higher duty than honesty of fact in regard to sellers, that of reasonable negotiation considering the position of buyers. 
D)  Solid Wood is incorrect because the UCC mandated duty of good faith imposes a higher duty than honesty of fact in transactions involving amounts in excess of $500, that of reasonable conduct considering all circumstances. 
E)  Solid Wood is incorrect because the UCC mandated duty of good faith imposes a higher duty than honesty in fact on merchants, that of reasonable commercial standards of fair dealing. 
A)  Solid Wood is incorrect because the UCC imposes no duty of good faith. 
B)  Solid Wood is incorrect because the UCC mandated duty of good faith requires honesty in fact in regard to all transactions regardless of the parties involved. 
C)  Solid Wood is incorrect because the UCC mandated duty of good faith imposes a higher duty than honesty of fact in regard to sellers, that of reasonable negotiation considering the position of buyers. 
D)  Solid Wood is incorrect because the UCC mandated duty of good faith imposes a higher duty than honesty of fact in transactions involving amounts in excess of $500, that of reasonable conduct considering all circumstances. 
E)  Solid Wood is incorrect because the UCC mandated duty of good faith imposes a higher duty than honesty in fact on merchants, that of reasonable commercial standards of fair dealing.

Exam 23: Performance and Obligations Under Sales and Leases

How does the position of the UCC compare with the common law in regard to the perfect tender rule?

The UCC defines course of dealing as ________

When may a buyer revoke acceptance if a nonconformity substantially impairs the value of goods?

What did the court rule in the case of Hubbard v. UTZ Quality Foods, Inc., in which the buyer refused on the basis of color to accept potatoes that were the subject of an installment contract?

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

Filters