Question 1

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  False

Question 2

When is a buyer deemed to have accepted goods that are delivered pursuant to a contract?

Accepted Answer

A)  If he fails to reject the goods after he has had a reasonable opportunity to inspect them. 
B)  Immediately upon delivery. 
C)  Only when he pays for them. 
D)  Only after an express acceptance. 
A)  If he fails to reject the goods after he has had a reasonable opportunity to inspect them. 
B)  Immediately upon delivery. 
C)  Only when he pays for them. 
D)  Only after an express acceptance. A

Question 3

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 4

Speedy Stop sells necessities to neighborhood shoppers until 1 a.m. every day. Dairyland delivered its order of milk products as usual around 6 a.m. while Mary, the shopkeeper, was busy with the early coffee and donut crowd. The Dairyland driver left 12 crates in the refrigerator compartment and went on to the rest of his route. At 7:30 a.m., Mary started to shelve the milk products and discovered that all 12 crates contained buttermilk rather than the usual mix of containers of whole milk, 2%, skim milk, and cream she had ordered. What is her obligation with regard to the goods?

Accepted Answer

Since this involves a rightful rejection

Question 5

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

Question 6

Which of the following terms would indicate a destination contract?

Accepted Answer

A)  F.O.B. city of buyer. 
B)  F.O.B. city of seller. 
C)  C.I.F. 
D)  F.A.S. seller's port. 
A)  F.O.B. city of buyer. 
B)  F.O.B. city of seller. 
C)  C.I.F. 
D)  F.A.S. seller's port.

Question 7

The Code does not excuse performance based upon commercial impracticability.

Accepted Answer

A) True 
 B)False

Question 8

A buyer in Atlanta enters into a sales contract with a seller in Chicago. If the contract does not mention the place for delivery of the goods, the place of delivery will be:

Accepted Answer

A)  at the seller's business or residence in Chicago. 
B)  as stated in all destination contracts. 
C)  at the buyer's business or residence in Atlanta. 
D)  irrelevant since the contract is void. 
A)  at the seller's business or residence in Chicago. 
B)  as stated in all destination contracts. 
C)  at the buyer's business or residence in Atlanta. 
D)  irrelevant since the contract is void.

Question 9

A merchant buyer of goods receives nonconforming goods. The merchant buyer rightfully rejects and appropriately notifies the seller, but the seller has no agent in the buyer's city. The goods are perishable and threaten to decline in value speedily. The merchant buyer has no further duty to the seller other than to await the seller's instructions.

Accepted Answer

A) True 
 B)False

Question 10

If no place of tender is indicated by the contract, delivery is presumed to be made at seller's place of business.

Accepted Answer

A) True 
 B)False

Question 11

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 12

Acceptance of goods, which disallows any later rejection of them, is accomplished only through express words.

Accepted Answer

A) True 
 B)False

Question 13

Increased production costs will allow the seller to avoid a contract based upon commercial impracticability.

Accepted Answer

A) True 
 B)False

Question 14

The Elm Street Accounting Partnership has ordered two maroon office chairs for its waiting room from the Quality Office Supply Company. Quality sends two burgundy-red office chairs that the Elm Street partnership rejects. What, if any, rights does Quality have under the circumstances? Explain.

Accepted Answer

Maroon and burgundy-red are almost the s

Question 15

The perfect tender rule requires that the seller's tender of performance must conform exactly to the contract subject to:

Accepted Answer

A)  installment contracts. 
B)  cure by the seller. 
C)  Both of these. 
D)  Neither of these. 
A)  installment contracts. 
B)  cure by the seller. 
C)  Both of these. 
D)  Neither of these.

Question 16

Where goods are in the possession of a bailee and are to be delivered without being moved, in most instances the seller may either tender to the buyer a document of title or obtain an acknowledgment by the bailee of the buyer's right to possess the goods.

Accepted Answer

A) True 
 B)False

Question 17

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

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

The CISG:

Accepted Answer

A)  does not follow the perfect tender rule. 
B)  provides that the seller must, in all cases, deliver the goods within a reasonable time after the conclusion of the contract. 
C)  provides that in most instances the buyer must pay the contract price before examining the goods. 
D)  provides no right of "cure." 
A)  does not follow the perfect tender rule. 
B)  provides that the seller must, in all cases, deliver the goods within a reasonable time after the conclusion of the contract. 
C)  provides that in most instances the buyer must pay the contract price before examining the goods. 
D)  provides no right of "cure."

Question 20

Les contracts to the sell and deliver to Chan 300 rolls of insulation. Unless the parties agree otherwise, Les must tender all 300 rolls in a single delivery, and Chan's payment is due at the time of the tender.

Accepted Answer

A) True 
 B)False

Exam 20: Performance

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.

When is a buyer deemed to have accepted goods that are delivered pursuant to a contract?

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

Which of the following terms would indicate a destination contract?

The Code does not excuse performance based upon commercial impracticability.

A buyer in Atlanta enters into a sales contract with a seller in Chicago. If the contract does not mention the place for delivery of the goods, the place of delivery will be:

If no place of tender is indicated by the contract, delivery is presumed to be made at seller's place of business.

Which of the following illustrates a shipment contract?

Acceptance of goods, which disallows any later rejection of them, is accomplished only through express words.

Increased production costs will allow the seller to avoid a contract based upon commercial impracticability.

The Elm Street Accounting Partnership has ordered two maroon office chairs for its waiting room from the Quality Office Supply Company. Quality sends two burgundy-red office chairs that the Elm Street partnership rejects. What, if any, rights does Quality have under the circumstances? Explain.

The perfect tender rule requires that the seller's tender of performance must conform exactly to the contract subject to:

Where goods are in the possession of a bailee and are to be delivered without being moved, in most instances the seller may either tender to the buyer a document of title or obtain an acknowledgment by the bailee of the buyer's right to possess the goods.

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?

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?

The CISG:

Les contracts to the sell and deliver to Chan 300 rolls of insulation. Unless the parties agree otherwise, Les must tender all 300 rolls in a single delivery, and Chan's payment is due at the time of the tender.

Introduction to Law

Business Ethics

Civil Dispute Resolution

Constitutional Law

Administrative Law

Criminal Law

Intentional Torts

Negligence and Strict Liability

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 Remedies

Introduction to Sales and Leases

Transfer of Title and Risk of Loss

Product Liability: Warranties and Strict Liability

Sales Remedies

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits, Collections, and Funds Transfers

Relationship of Principal and Agent

Relationship With Third Parties

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 Corporations

Secured Transactions and Suretyship

Bankruptcy

Securities Regulation

Intellectual Property

Employment Law

Antitrust

Accountants Legal Liability

Consumer Protection

Environmental Law

International Business Law

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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