Exam 26: Remedies for Breach of Sales Contracts

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On January 15, 2012, Anders brought an action against Barnes for breach of a contract for the sale of electronic parts. The breach occurred on January 10, 2008, and Anders discovered the breach on January 20, 2008. The state statute of limitations for contract actions is five years. Barnes raised the UCC statute of limitations as a defense to the action. Is this defense valid?

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Question 1

Correct Answer:

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Yes. Judgment will be for Barnes. Contracts for the sale of goods are governed by the UCC statute of limitations, which is four (4) years from the date the cause of action arises. Thus, the five-year state statute of limitations for contracts does not apply. The cause of action arose on January 10, 2008, the date on which the contract was breached. It is irrelevant that Barnes did not learn of the breach until January 20, 2008. The action was brought on January 15, 2012, which is more than four (4) years after the cause of action arose on January 10, 2008. Therefore, the action is barred by the UCC statute of limitations.

A seller may cancel a sales contract if the buyer does any of the following except:

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(Multiple Choice)

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Question 2

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A seller's right to retain possession of goods until the seller has been paid is called a:

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Question 3

Correct Answer:

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A liquidated damages clause is a contractually-agreed upon amount of damages to be paid in the event of default or breach.

(True/False)

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Question 4

The right of a buyer to cancel or rescind a sales contract is never impacted by a delay in exercising that right.

(True/False)

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Question 5

A buyer who cancels a sales contract because the seller fails to deliver the goods is entitled to recover as much of the purchase price as had been paid.

(True/False)

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Question 6

When a sales contract is broken by the buyer, the seller has only the remedies of lien and resale available.

(True/False)

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Question 7

Suppose Jim is seriously injured by his new chain saw. If the sales contract excluded any damages from recovery, courts would hold that contract:

(Multiple Choice)

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Question 8

To recover damages, a buyer must give the seller notice of the breach within three (3) days.

(True/False)

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Question 9

Suppose NovaTek sells $10,000 worth of goods to BestGear on credit and ships the products. During shipment NovaTek discovers BestGear is insolvent. NovaTek can stop shipment of the product if BestGear has not provided assurances.

(True/False)

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Question 10

When a buyer has broken a sales contract, the seller may resell the goods or the balance of them in the seller's possession.

(True/False)

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Question 11

A secured transaction is a pledge of property by the buyer that enables the seller to take possession of the goods if the buyer fails to pay the amount owed.

(True/False)

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Question 12

When a buyer has possession of goods after rightfully rejecting them, the buyer is treated:

(Multiple Choice)

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Question 13

The recovery of lost profits by the seller provides reimbursement for costs the seller incurred in gearing up for contract performance.

(True/False)

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Question 14

The tort statutes of limitations tend to be __________the UCC statute of limitations.

(Multiple Choice)

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Question 15

If a buyer chooses to cover, the substituted goods purchased must be substantially identical to the contract goods.

(True/False)

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Question 16

When a sales contract is breached, the common law governs the statute of limitations.

(True/False)

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Question 17

When a plaintiff sues on the basis of strict tort liability, the action is subject to:

(Multiple Choice)

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Question 18

The UCC's statute of limitations applies when a party is seeking recovery on strict tort liability, fraud, or negligence.

(True/False)

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Question 19

An action for breach of warranty generally must be brought within three (3) years of the breach.

(True/False)

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Question 20

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Exam 26: Remedies for Breach of Sales Contracts

A seller may cancel a sales contract if the buyer does any of the following except:

A seller's right to retain possession of goods until the seller has been paid is called a:

A liquidated damages clause is a contractually-agreed upon amount of damages to be paid in the event of default or breach.

The right of a buyer to cancel or rescind a sales contract is never impacted by a delay in exercising that right.

A buyer who cancels a sales contract because the seller fails to deliver the goods is entitled to recover as much of the purchase price as had been paid.

When a sales contract is broken by the buyer, the seller has only the remedies of lien and resale available.

Suppose Jim is seriously injured by his new chain saw. If the sales contract excluded any damages from recovery, courts would hold that contract:

To recover damages, a buyer must give the seller notice of the breach within three (3) days.

Suppose NovaTek sells $10,000 worth of goods to BestGear on credit and ships the products. During shipment NovaTek discovers BestGear is insolvent. NovaTek can stop shipment of the product if BestGear has not provided assurances.

When a buyer has broken a sales contract, the seller may resell the goods or the balance of them in the seller's possession.

A secured transaction is a pledge of property by the buyer that enables the seller to take possession of the goods if the buyer fails to pay the amount owed.

When a buyer has possession of goods after rightfully rejecting them, the buyer is treated:

The recovery of lost profits by the seller provides reimbursement for costs the seller incurred in gearing up for contract performance.

The tort statutes of limitations tend to be __________the UCC statute of limitations.

If a buyer chooses to cover, the substituted goods purchased must be substantially identical to the contract goods.

When a sales contract is breached, the common law governs the statute of limitations.

When a plaintiff sues on the basis of strict tort liability, the action is subject to:

The UCC's statute of limitations applies when a party is seeking recovery on strict tort liability, fraud, or negligence.

An action for breach of warranty generally must be brought within three (3) years of the breach.

The Nature and Sources of Law

The Court System and Dispute Resolution

Business Ethics, Social Forces, and the Law

The Constitution As the Foundation of the Legal Environment

Government Regulation of Competition and Prices

Administrative Agencies

Crimes

Torts

Intellectual Property Rights and the Internet

The Legal Environment of International Trade

Nature and Classes of Contracts: Contracting on the Internet

Formation of Contracts: Offer and Acceptance

Capacity and Genuine Assent

Consideration

Legality and Public Policy

Writing, Electronic Forms, and Interpretation of Contracts

Third Persons and Contracts

Discharge of Contracts

Breach of Contract and Remedies

Personal Property and Bailments

Legal Aspects of Supply Chain Management

Nature and Form of Sales

Title and Risk of Loss

Product Liability: Warranties and Torts

Obligations and Performance

Kinds of Negotiable Instruments and Negotiability

Transfers of Negotiable Instruments and Warranties of Parties

Liability of the Parties Under Negotiable Instruments

Checks and Funds Transfers

Nature of the Debtor Creditor Relationship

Consumer Protection

Secured Transactions in Personal Property

Bankruptcy

Insurance

Agency

Third Persons in Agency

Regulation of Employment

Equal Employment Opportunity Law

Types of Business Organizations

Partnerships

LPs, LLCs, and LLPs

Corporate Formation

Shareholder Rights in Corporations

Securities Regulation

Accountants Liability and Malpractice

Management of Corporations

Real Property

Environmental Law and Land Use Controls

Leases

Decedents Estates and Trusts

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