Question 1

a.What are the obligations of the seller under a shipment contract? 
b.What are the obligations of the seller under a destination contract?

Accepted Answer

a.Under a shipment contract the seller is required to send the goods to the buyer, but the contract does not obligate the seller to deliver them at a particular destination.Under a shipment contract the seller is required to: (1) deliver the goods to a carrier, (2) make a contract for their transportation which is reasonable according to the nature of the goods and other circumstances; (3) obtain and promptly deliver or tender to the buyer any document necessary to enable the buyer to obtain possession of the goods from the carrier; and (4) promptly notify the buyer of the shipment.
b.A destination contract requires the seller to tender delivery of conforming goods at a specified destination.The seller must place the goods at the buyer's disposition and give the buyer reasonable notice to enable him to take delivery.If the destination contract involves documents of title, the seller must tender the necessary documents.

Question 2

Rejection is ineffective unless the buyer notifies the seller.

Accepted Answer

A) True 
 B)False  True

Question 3

In their contract for the sale of window shades, Lela Window Treatments, Inc.and Shane agree that Lela will have the right to replace any defective goods that are delivered to Shane.This contractual provision will not have any effect because the perfect tender rule of the UCC will control in a sale of goods transaction.

Accepted Answer

A) True 
 B)False  False

Question 4

A carpenter ordered 500 sheets of 1/2-inch plywood from her supplier, but received 498 sheets of 1/4-inch plywood.If she rejects these goods, she has no further obligation to her supplier regarding these nonconforming goods.

Accepted Answer

A) True 
 B)False

Question 5

The concept of the "right to cooperation" includes that:

Accepted Answer

A)  where neither party is at fault and the agreed manner of delivery becomes impracticable, both parties are required to negotiate a new price. 
B)  where one party's required cooperation is not timely, the other party is excused from any resulting delay in her own performance. 
C)  where one party's required cooperation is untimely, the other party is required to tender performance as if the first party had tendered in a timely manner. 
D)  None of these. 
A)  where neither party is at fault and the agreed manner of delivery becomes impracticable, both parties are required to negotiate a new price. 
B)  where one party's required cooperation is not timely, the other party is excused from any resulting delay in her own performance. 
C)  where one party's required cooperation is untimely, the other party is required to tender performance as if the first party had tendered in a timely manner. 
D)  None of these.

Question 6

Which of the following is correct with respect to the Code's approach to impossibility of performance?

Accepted Answer

A)  A significant drop in demand for the goods will excuse the buyer's performance. 
B)  Increased production costs will excuse performance by the seller. 
C)  Performance will be excused when it is impractical as a result of one or more unforeseen supervening events that are more than mere hardship or increased cost of performance. 
D)  All of these are correct. 
A)  A significant drop in demand for the goods will excuse the buyer's performance. 
B)  Increased production costs will excuse performance by the seller. 
C)  Performance will be excused when it is impractical as a result of one or more unforeseen supervening events that are more than mere hardship or increased cost of performance. 
D)  All of these are correct.

Question 7

If an anticipatory repudiation substantially impairs the value of the contract, the aggrieved party may:

Accepted Answer

A)  await performance for a commercially reasonable time. 
B)  resort to any appropriate remedy for breach. 
C)  Both are correct. 
D)  None of these. 
A)  await performance for a commercially reasonable time. 
B)  resort to any appropriate remedy for breach. 
C)  Both are correct. 
D)  None of these.

Question 8

The seller is excused from the duty of performance on the nonoccurrence of presupposed conditions that were a basic assumption of the contract, unless the seller has expressly assumed the risk.

Accepted Answer

A) True 
 B)False

Question 9

On June 1, Supertread Tire Company entered into a contract to provide 100 tires per month to ZYX Cycle Company at $30 per tire for the next two years.The October shipment consisted of 100 badly defective tires.ZYX Cycle Company:

Accepted Answer

A)  can treat the whole contract as breached. 
B)  cannot reject the October shipment since it is part of the installment series. 
C)  must pay for the defective tires, but Supertread must provide 200 tires in November. 
D)  can reject the October shipment if it cannot be cured in a timely manner by Supertread. 
A)  can treat the whole contract as breached. 
B)  cannot reject the October shipment since it is part of the installment series. 
C)  must pay for the defective tires, but Supertread must provide 200 tires in November. 
D)  can reject the October shipment if it cannot be cured in a timely manner by Supertread.

Question 10

The court in Furlong v.Alpha Chi Omega Sorority held that:

Accepted Answer

A)  the law required the sorority to accept Furlong's offer of compromise. 
B)  rejection of the goods was not rightful even though the sorority seasonably notified the seller within a reasonable time since notice was by phone. 
C)  the UCC did not apply to this situation. 
D)  the design specifications were part of the basis of the bargain and as such became an express warranty. 
A)  the law required the sorority to accept Furlong's offer of compromise. 
B)  rejection of the goods was not rightful even though the sorority seasonably notified the seller within a reasonable time since notice was by phone. 
C)  the UCC did not apply to this situation. 
D)  the design specifications were part of the basis of the bargain and as such became an express warranty.

Question 11

Under the __________, a buyer may reject goods for even the slightest defect.

Accepted Answer

A)  rules for inspection 
B)  revocation of acceptance rule 
C)  excuses for nonperformance 
D)  perfect tender rule 
A)  rules for inspection 
B)  revocation of acceptance rule 
C)  excuses for nonperformance 
D)  perfect tender rule

Question 12

Which of the following illustrates a shipment contract?

Accepted Answer

A)  Ex-ship. 
B)  F.O.B. place of shipment. 
C)  No arrival, no sale. 
D)  All of these are shipment contracts. 
A)  Ex-ship. 
B)  F.O.B. place of shipment. 
C)  No arrival, no sale. 
D)  All of these are shipment contracts.

Question 13

A manifestation by the buyer of his unwillingness to become the owner of the goods is:

Accepted Answer

A)  revocation. 
B)  rejection. 
C)  tender. 
D)  cure. 
A)  revocation. 
B)  rejection. 
C)  tender. 
D)  cure.

Question 14

Sam agrees to sell Bill one 18-cubic-foot, yellow refrigerator for $700.It is to be delivered to Bill's home on July 7.Under the perfect tender rule, which one of the following cases would permit Bill to rightfully reject the goods?

Accepted Answer

A)  Sam delivered an 18-cubic-foot, silver refrigerator on July 7, and Bill calls Sam to complain. 
B)  Sam sent his truck to Bill's home with the 18-cubic-foot, yellow refrigerator on July 7, but Bill was not home. 
C)  Sam sent 18-cubic-foot, yellow refrigerator without ice cube trays on July 5 and notifies Bill of the defect. 
D)  Sam sent an 18-cubic-foot, yellow refrigerator with a small dent in it on July 7. Bill refuses delivery but never bothers to call Sam. 
A)  Sam delivered an 18-cubic-foot, silver refrigerator on July 7, and Bill calls Sam to complain. 
B)  Sam sent his truck to Bill's home with the 18-cubic-foot, yellow refrigerator on July 7, but Bill was not home. 
C)  Sam sent 18-cubic-foot, yellow refrigerator without ice cube trays on July 5 and notifies Bill of the defect. 
D)  Sam sent an 18-cubic-foot, yellow refrigerator with a small dent in it on July 7. Bill refuses delivery but never bothers to call Sam.

Question 15

The delivery terms "ex-ship" and "no arrival, no sale" indicate that the contract is a shipment contract.

Accepted Answer

A) True 
 B)False

Question 16

In which of the following situations does the seller have the right to cure?

Accepted Answer

A)  After the time for performance has expired if the seller had reasonable grounds for believing the buyer would accept a nonconforming tender with or without monetary adjustment. 
B)  Where the time for performance under the contract has not yet expired. 
C)  Where the buyer has revoked acceptance. 
D)  Two of these are correct but not all three. 
A)  After the time for performance has expired if the seller had reasonable grounds for believing the buyer would accept a nonconforming tender with or without monetary adjustment. 
B)  Where the time for performance under the contract has not yet expired. 
C)  Where the buyer has revoked acceptance. 
D)  Two of these are correct but not all three.

Question 17

In the absence of agreement, payment is due at the time and place the buyer is to receive the goods, even though the place of shipment is the place of delivery.

Accepted Answer

A) True 
 B)False

Question 18

Goods are to be sent from Buffalo, NY to Raleigh, NC by UPS using the delivery terms F.O.B.Buffalo, NY.Where does tender occur?

Accepted Answer

A)  Where the goods are identified. 
B)  Where the goods are shipped. 
C)  Where the goods are delivered and picked up by the buyer. 
D)  Where the goods are taken by the buyer. 
A)  Where the goods are identified. 
B)  Where the goods are shipped. 
C)  Where the goods are delivered and picked up by the buyer. 
D)  Where the goods are taken by the buyer.

Question 19

A buyer's or lessee's right to reject nonconforming goods depends on the size or extent of the breach of the seller's or lessor's duty to tender conforming goods.

Accepted Answer

A) True 
 B)False

Question 20

Revocation and rejection give the buyer the same rights and duties with respect to the goods.

Accepted Answer

A) True 
 B)False

Exam 20: Performance

a.What are the obligations of the seller under a shipment contract? b.What are the obligations of the seller under a destination contract?

Rejection is ineffective unless the buyer notifies the seller.

A carpenter ordered 500 sheets of 1/2-inch plywood from her supplier, but received 498 sheets of 1/4-inch plywood.If she rejects these goods, she has no further obligation to her supplier regarding these nonconforming goods.

The concept of the "right to cooperation" includes that:

Which of the following is correct with respect to the Code's approach to impossibility of performance?

If an anticipatory repudiation substantially impairs the value of the contract, the aggrieved party may:

The seller is excused from the duty of performance on the nonoccurrence of presupposed conditions that were a basic assumption of the contract, unless the seller has expressly assumed the risk.

On June 1, Supertread Tire Company entered into a contract to provide 100 tires per month to ZYX Cycle Company at $30 per tire for the next two years.The October shipment consisted of 100 badly defective tires.ZYX Cycle Company:

The court in Furlong v.Alpha Chi Omega Sorority held that:

Under the __________, a buyer may reject goods for even the slightest defect.

Which of the following illustrates a shipment contract?

A manifestation by the buyer of his unwillingness to become the owner of the goods is:

Sam agrees to sell Bill one 18-cubic-foot, yellow refrigerator for $700.It is to be delivered to Bill's home on July 7.Under the perfect tender rule, which one of the following cases would permit Bill to rightfully reject the goods?

The delivery terms "ex-ship" and "no arrival, no sale" indicate that the contract is a shipment contract.

In which of the following situations does the seller have the right to cure?

In the absence of agreement, payment is due at the time and place the buyer is to receive the goods, even though the place of shipment is the place of delivery.

Goods are to be sent from Buffalo, NY to Raleigh, NC by UPS using the delivery terms F.O.B.Buffalo, NY.Where does tender occur?

A buyer's or lessee's right to reject nonconforming goods depends on the size or extent of the breach of the seller's or lessor's duty to tender conforming goods.

Revocation and rejection give the buyer the same rights and duties with respect to the goods.

Introduction to Law

Business Ethicspart Ii: the Legal Environment of Business

Civil Dispute Resolution

Constitutional Law

Administrative Law

Criminal Law

Negligence and Strict Liabilitypart Iii: Contracts

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Consideration

Illegal Bargains

Contractual Capacity

Contracts in Writing

Third Parties to Contracts

Performance, Breach, and Discharge

Contract Remediespart Iv: Sales

Introduction to Sales and Leases

Transfer of Title and Risk of Loss

Product Liability: Warranties and Strict Liability

Sales Remediespart V: Negotiable Instruments

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits, Collections, and Funds Transferspart Vi: Agency

Relationship of Principal and Agent

Relationship With Third Partiespart Vii: Business Associations

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature and Formation of Corporations

Financial Structure of Corporations

Management Structure of Corporations

Fundamental Changes of Corporationspart Viii: Debtor and Creditor Relations

Secured Transactions and Suretyship

Bankruptcypart Ix: Regulation of Business

Securities Regulation

Intellectual Property

Employment Law

Antitrust

Accountants Legal Liability

Consumer Protection

International Business Lawpart X: Property

Introduction to Property, Property Insurance, Bailments, and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

Trusts and Wills

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