Question 1

The Sale of Goods Act implies a

Accepted Answer

A) warranty that the seller has title to sell. 
B) warranty that delivery will occur on time. 
C) condition that goods will be reasonably priced. 
D) warranty that payment will occur on time. 
E) condition that the buyer will receive clear title. 
A) warranty that the seller has title to sell. 
B) warranty that delivery will occur on time. 
C) condition that goods will be reasonably priced. 
D) warranty that payment will occur on time. 
E) condition that the buyer will receive clear title. D

Question 2

Noriko saw a painting in Kurosawa's Fine Art shop.The total price was $7000.Noriko explained to the salesperson that she loved the painting, but she also said that she was not sure if she could afford it.The salesperson said that he could not simply set it aside for her because several other customers had shown an interest in the painting.Noriko therefore agreed to provide a $500 deposit and promised that she would return within a week to pay the remainder and take possession of the painting.Two weeks later, she telephoned the salesperson and said that she simply could not afford to buy the painting.Which of the following statements is TRUE?

Accepted Answer

A) Noriko can recover her $500 payment because the Sale of Goods Act does not apply to the parties' contract. 
B) Kurosawa is probably entitled to keep the $500 because Noriko's payment was probably a penalty. 
C) Noriko can exercise a lien in order to recover $500 from Kurosawa. 
D) The facts demonstrate the use of a contractual deposit and illustrate why parties should sometimes should use that concept. 
E) Noriko would be entitled to recover her $500 payment if the contract was not governed by the Sale of Goods Act. 
A) Noriko can recover her $500 payment because the Sale of Goods Act does not apply to the parties' contract. 
B) Kurosawa is probably entitled to keep the $500 because Noriko's payment was probably a penalty. 
C) Noriko can exercise a lien in order to recover $500 from Kurosawa. 
D) The facts demonstrate the use of a contractual deposit and illustrate why parties should sometimes should use that concept. 
E) Noriko would be entitled to recover her $500 payment if the contract was not governed by the Sale of Goods Act. D

Question 3

Zounds Sounds, a music store, ordered 20 cases of blank cassette tapes from Polymuse Inc.Each case costs $100, so that the total contract price was $2000.In fact, Polymuse delivered 23 cases of tapes to Zounds.Is Zounds required to accept some or all of those cases? If so, what price will it be required to pay?

Accepted Answer

The Sale of Goods Act implies a condition that the seller will deliver goods that conform with the contract.That implied condition applies to the quantity of goods that the buyer ordered.In this case, Zounds ordered 20 cases of tapes at a total price of $2000.Polymuse actually delivered 23 cases.Zounds therefore has an option.First, it can reject the entire shipment and refuse to pay any price.Second, it can accept 20 cases and pay $2000, while rejecting the extra three cases.

Question 4

Which of the following statements is TRUE with respect to writing requirements under a Sale of Goods Act?

Accepted Answer

A) The Sale of Goods Act in each and every province and territory (except Quebec) requires a written contract in at least some cases. 
B) Under those Sale of Goods Acts that impose a writing requirement, a failure to satisfy that requirement causes the parties' contract to be null and void. 
C) While some Sale of Goods Acts impose writing requirements, they do so only for contracts that exceed specified price levels. 
D) If a Sale of Goods Act imposes a writing requirement, it does so only if the purchaser is an individual consumer rather than a business or corporation. 
E) Even if a Sale of Goods Act generally imposes a writing requirement, an oral contract is enforceable as long as the parties agreed on the essential terms. 
A) The Sale of Goods Act in each and every province and territory (except Quebec) requires a written contract in at least some cases. 
B) Under those Sale of Goods Acts that impose a writing requirement, a failure to satisfy that requirement causes the parties' contract to be null and void. 
C) While some Sale of Goods Acts impose writing requirements, they do so only for contracts that exceed specified price levels. 
D) If a Sale of Goods Act imposes a writing requirement, it does so only if the purchaser is an individual consumer rather than a business or corporation. 
E) Even if a Sale of Goods Act generally imposes a writing requirement, an oral contract is enforceable as long as the parties agreed on the essential terms.

Question 5

The Sale of Goods Act implies a term that goods will match their description.Which of the following statements is TRUE with respect to that term?

Accepted Answer

A) That term is a warranty. 
B) That term applies only if the seller is normally in the business of selling the type of goods that the buyer has purchased. 
C) That term does not apply if the buyer personally selected an item from a shelf. 
D) That term applies to the identity of goods, but not to the quality of goods. 
E) That term is a codification of the phrase caveat emptor. 
A) That term is a warranty. 
B) That term applies only if the seller is normally in the business of selling the type of goods that the buyer has purchased. 
C) That term does not apply if the buyer personally selected an item from a shelf. 
D) That term applies to the identity of goods, but not to the quality of goods. 
E) That term is a codification of the phrase caveat emptor.

Question 6

"The Sale of Goods Act was intended to make commerce easier by generally implying a number of terms into contracts for the sale of goods.However, the implication of such terms also creates the need for careful risk management." Explain the meaning of that statement and describe how the relevant risks can be managed.

Accepted Answer

Although the Sale of Goods Act provides

Question 7

Discuss the significance of a buyer's reasonable opportunity to inspect goods before accepting them.Can a buyer ever be held responsible for failing to use a reasonable opportunity to inspect goods? Can a buyer ever be held responsible for failing to detect a defect while inspecting goods? Explain your answers.

Accepted Answer

The issue of inspection arises in connec

Question 8

Good-Nite Inns, a chain of mid-quality hotels, entered into a contract with Hospitality Supply Company (HSC) for the purchase of soaps.Those soaps were intended to be provided to customers of the hotel.Shortly after receiving the first delivery, however, Good-Nite Inns discovered that the soaps caused a dry, itchy rash on even the most thick-skinned customers.The hotel chain therefore wants to sue HSC under the Sale of Goods Act.Which of the following statements is TRUE?

Accepted Answer

A) There is no implied term of fitness for purpose because, given the nature of its business, Good-Nite Inns should know enough about its customers to select the correct soaps. 
B) There cannot possibly be an implied term of fitness for purpose if Good-Nite Inns mentioned the soap by brand name when it placed its order. 
C) Good-Nite Inns may be able to rely upon an implied term of merchantability even if it placed its order after selecting the soaps from among a variety of samples. 
D) If Good-Nite Inns selected the soaps from among a variety of samples, HSC may be held liable even if the hotel chain would have discovered the defect in the soaps if it had reasonably inspected the soaps before creating the contract. 
E) The Sale of Goods Act does not apply because the contract was created between two companies. 
A) There is no implied term of fitness for purpose because, given the nature of its business, Good-Nite Inns should know enough about its customers to select the correct soaps. 
B) There cannot possibly be an implied term of fitness for purpose if Good-Nite Inns mentioned the soap by brand name when it placed its order. 
C) Good-Nite Inns may be able to rely upon an implied term of merchantability even if it placed its order after selecting the soaps from among a variety of samples. 
D) If Good-Nite Inns selected the soaps from among a variety of samples, HSC may be held liable even if the hotel chain would have discovered the defect in the soaps if it had reasonably inspected the soaps before creating the contract. 
E) The Sale of Goods Act does not apply because the contract was created between two companies.

Question 9

If goods are sold by both description and sample, the goods must

Accepted Answer

A) match the description and the sample. 
B) match the description, but not the sample. 
C) match the sample, but not the description. 
D) always be fit for their intended purpose. 
E) always be of merchantable quality. 
A) match the description and the sample. 
B) match the description, but not the sample. 
C) match the sample, but not the description. 
D) always be fit for their intended purpose. 
E) always be of merchantable quality.

Question 10

Which of the following statements is TRUE as a general rule?

Accepted Answer

A) Under an unconditional contract for the sale of specific goods in a deliverable state, property passes only once the buyer pays the price. 
B) Under a contract that requires the seller to test the goods, property passes as soon as the seller does so and notifies the buyer. 
C) Under a contract that requires the seller to do something to ascertain the price of the goods, property passes as soon as the price is determined. 
D) Under a contract "on sale or return," property passes only if the buyer pays the price. 
E) Under a contract that requires the seller to modify the goods in order to put them into a deliverable state, property passes only when the goods are delivered to the buyer. 
A) Under an unconditional contract for the sale of specific goods in a deliverable state, property passes only once the buyer pays the price. 
B) Under a contract that requires the seller to test the goods, property passes as soon as the seller does so and notifies the buyer. 
C) Under a contract that requires the seller to do something to ascertain the price of the goods, property passes as soon as the price is determined. 
D) Under a contract "on sale or return," property passes only if the buyer pays the price. 
E) Under a contract that requires the seller to modify the goods in order to put them into a deliverable state, property passes only when the goods are delivered to the buyer.

Question 11

Humbert visited Dolores's premises and saw a sample of widgets that she was offering for sale.On the basis of that sample, he agreed to buy her entire stock of ten widgets.Dolores was delighted with that sale because she had not previously dealt in widgets and she did not intend to do so again in the future.Humbert paid the price in full and Dolores delivered the widgets to his workshop the next day.Because he was busy, Humbert did not inspect the widgets when they arrived.He simply signed a receipt and placed the widgets in a storeroom.Some time later, however, he discovered that the widgets were defective.He therefore demanded a partial refund.Dolores refused that request on the basis that the defect was fairly obvious.Is Humbert entitled to complain about the defect? Explain your answer.

Accepted Answer

This question requires a very careful re

Question 12

Chuck agreed to sell a widget to Tawny.Under the terms of that contract, she was required to pay $50 000 on May 1 and he was required to deliver the widget to her by June 1.The contract also stated that, regardless of possession, property in the widget would not pass to Tawny until she paid the full price.Tawny failed to pay $50 000 on May 1.However, on May 2, she introduced Chuck to Brandi, who was willing to buy the same widget for $45 000.Chuck insists that Tawny is still required to pay $50 000.Tawny, in contrast, argues that she only has to pay $5000 and that Chuck is required to act reasonably by selling the widget to Brandi for $45 000.Chuck's argument is correct and Tawny's argument is incorrect.

Accepted Answer

A) True 
 B)False

Question 13

Hiram is about to agree to sell a specific antique book to Natasha for $30 000.Hiram is willing to let Natasha have possession of the goods immediately.Furthermore, he is willing to sell the book on credit and to allow her to pay in ten monthly instalments.However, he is also concerned that she might become insolvent before paying the full price.If that occurred, he would want to be able to recover the book itself, rather than simply sue Natasha.After all, if she becomes bankrupt, she will not have enough money to fully satisfy all of the claims against her.Is Hiram's position truly at risk? If so, is there anything that he can do when creating his contract with Natasha to protect himself? Explain your answer.

Accepted Answer

Hiram is at risk.The parties intend to c

Question 14

Which of the following remedies can only ever be used if the buyer is insolvent?

Accepted Answer

A) stoppage in transit and repossession 
B) an action for the price and a lien 
C) an action for the price, stoppage in transit, and repossession 
D) damages, a lien, and repossession 
E) a lien, stoppage in transit, and repossession 
A) stoppage in transit and repossession 
B) an action for the price and a lien 
C) an action for the price, stoppage in transit, and repossession 
D) damages, a lien, and repossession 
E) a lien, stoppage in transit, and repossession

Question 15

Sunni purchased a stereo system from an electronics store.The total purchase price was $3000.He paid $2000 with a cheque and $1000 with a credit card.That transaction is governed by the Sale of Goods Act.

Accepted Answer

A) True 
 B)False

Question 16

Crystal purchased a specific, fully functioning widget from Husker Du Inc.She promised to pay the price of $10 000 within one month.As part of a promotional campaign, Husker Du agreed to deliver the widget to her factory for free.Husker Du Inc.delays shipping the widget to Crystal's place as it forgets about the order.During that delay Husker Du's employee carelessly left its truck unlocked on the street during his lunch break.The widget was stolen from the truck and has never been recovered.Husker Du nevertheless insists that Crystal had already acquired property in the widget by the time of the theft and that she therefore was required to honour her promise to pay $10 000.Is that argument correct? Did property pass to Crystal? Is she required to pay the price? Explain your answer.

Accepted Answer

The parties created an unconditional con

Question 17

Alison bought a computer from Hugh.The parties never actually met.Alison saw a selection of computers on Hugh's web site and ordered one by telephone.Alison will be able to bring an action against Hugh on the basis of an implied condition that the goods match their description

Accepted Answer

A) if the computer is delivered two weeks later than Hugh had promised. 
B) only if she has already paid the purchase price. 
C) if the computer is not of the same quality as she expected. 
D) only if she intended to use the computer for personal, rather than business, purposes. 
E) if her complaint deals with the identity of the goods, but not if her complaint deals with the quality of the goods. 
A) if the computer is delivered two weeks later than Hugh had promised. 
B) only if she has already paid the purchase price. 
C) if the computer is not of the same quality as she expected. 
D) only if she intended to use the computer for personal, rather than business, purposes. 
E) if her complaint deals with the identity of the goods, but not if her complaint deals with the quality of the goods.

Question 18

Honoria agreed to sell a shipment of widgets to Klaus on credit.Following the terms of the contract, Honoria delivered the widgets to an independent carrier and instructed the carrier to deliver the shipment to Klaus's warehouse.Which of the following statements is TRUE?

Accepted Answer

A) Honoria still has the authority and the ability to exercise a lien in order to retain possession of the shipment until Klaus pays the full purchase price. 
B) Honoria can exercise the right of repossession against the independent carrier if she hears a rumor that the carrier may be insolvent. 
C) If Klaus becomes bankrupt, Honoria is entitled to rely on the implied condition of solvency. 
D) If Honoria becomes insolvent while the goods are being shipped by the carrier, Klaus should exercise a lien over the widgets. 
E) If Klaus becomes insolvent while the carrier still has possession of the shipment, Honoria should exercise the right of stoppage in transit. 
A) Honoria still has the authority and the ability to exercise a lien in order to retain possession of the shipment until Klaus pays the full purchase price. 
B) Honoria can exercise the right of repossession against the independent carrier if she hears a rumor that the carrier may be insolvent. 
C) If Klaus becomes bankrupt, Honoria is entitled to rely on the implied condition of solvency. 
D) If Honoria becomes insolvent while the goods are being shipped by the carrier, Klaus should exercise a lien over the widgets. 
E) If Klaus becomes insolvent while the carrier still has possession of the shipment, Honoria should exercise the right of stoppage in transit.

Question 19

Shasta contractually agreed to purchase a crystal vase from Status Home Furnishings.However, before she was able to take possession of it, and while it was still in the store, the crystal vase fell to the ground and shattered beyond repair as a result of a small earthquake.Which of the following statements is TRUE?

Accepted Answer

A) Shasta bears the cost of the accident because risk always passes to the buyer as soon as a valid sale contract is created. 
B) Shasta cannot possibly bear the cost of the accident if property had not yet passed to her. 
C) Assuming that risk passed to Shasta before the accident occurred, it could not possibly be relevant that the store had acted carelessly. 
D) As a general rule, if risk passed to Shasta before the accident occurred, the store was required to purchase insurance for her protection as long as the store retained possession. 
E) If the store was contractually required to polish the vase, then it may still bear the loss even if it had completed the task before the earthquake occurred. 
A) Shasta bears the cost of the accident because risk always passes to the buyer as soon as a valid sale contract is created. 
B) Shasta cannot possibly bear the cost of the accident if property had not yet passed to her. 
C) Assuming that risk passed to Shasta before the accident occurred, it could not possibly be relevant that the store had acted carelessly. 
D) As a general rule, if risk passed to Shasta before the accident occurred, the store was required to purchase insurance for her protection as long as the store retained possession. 
E) If the store was contractually required to polish the vase, then it may still bear the loss even if it had completed the task before the earthquake occurred.

Question 20

Chuck was interested in a stereo system that he saw at Nikita's garage sale.She asked if he wanted to take it inside to her basement to test it out, but he said "no" because he felt uncomfortable with the idea of listening to music in a stranger's house.He nevertheless bought it for $100.When he got it home, however, he noticed three problems.First, there are several small scratches in the stereo's exterior finish.Second, he was disappointed to discover that the stereo does not have a radio.Nikita had not said anything about a radio, but he assumed that one was included in the unit.And third, Chuck is very upset that the CD player skips badly.Which of the following statements is TRUE with respect to the implied term of merchantable quality?

Accepted Answer

A) Chuck cannot sue Nikita because he would have noticed all of the defects if he if he had reasonably inspected the stereo unit before buying it. 
B) Each of the problems prevents the stereo from satisfying the implied term of merchantable quality. 
C) Chuck cannot sue Nikita because the implied term of merchantable quality does not apply to used goods. 
D) Chuck cannot sue Nikita unless she normally is in the business of selling stereos. 
E) Chuck cannot sue Nikita unless he relied upon her advice when he decided to buy the stereo. 
A) Chuck cannot sue Nikita because he would have noticed all of the defects if he if he had reasonably inspected the stereo unit before buying it. 
B) Each of the problems prevents the stereo from satisfying the implied term of merchantable quality. 
C) Chuck cannot sue Nikita because the implied term of merchantable quality does not apply to used goods. 
D) Chuck cannot sue Nikita unless she normally is in the business of selling stereos. 
E) Chuck cannot sue Nikita unless he relied upon her advice when he decided to buy the stereo.

The Sale of Goods Act implies a

Which of the following statements is TRUE with respect to writing requirements under a Sale of Goods Act?

The Sale of Goods Act implies a term that goods will match their description.Which of the following statements is TRUE with respect to that term?

If goods are sold by both description and sample, the goods must

Which of the following statements is TRUE as a general rule?

Which of the following remedies can only ever be used if the buyer is insolvent?

Sunni purchased a stereo system from an electronics store.The total purchase price was $3000.He paid $2000 with a cheque and $1000 with a credit card.That transaction is governed by the Sale of Goods Act.

Alison bought a computer from Hugh.The parties never actually met.Alison saw a selection of computers on Hugh's web site and ordered one by telephone.Alison will be able to bring an action against Hugh on the basis of an implied condition that the goods match their description

Honoria agreed to sell a shipment of widgets to Klaus on credit.Following the terms of the contract, Honoria delivered the widgets to an independent carrier and instructed the carrier to deliver the shipment to Klaus's warehouse.Which of the following statements is TRUE?

Risk Management and Sources of Law

Litigation and Alternative Dispute Resolution

Introduction to Torts

Intentional Torts

Miscellaneous Torts Affecting Business

Negligence

The Nature and Creation of Contracts

Consideration and Privity

Representations and Terms

Contractual Defects

Discharge and Breach

Contractual Remedies

Real Property: Interests and Leases

Real Property: Sales and Mortgages

Personal Property: Bailment and Insurance

Intellectual Property

Electronic Commerce

Agency and Other Methods of Carrying on Business

Basic Forms of Business Organizations

Legal Rules for Corporate Governance

Secured Transactions

Dealing With Bankruptcy and Insolvency

Government Regulation of Business

Individual Employment

Organized Labour

Online: Special Contracts: Negotiable Instruments

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Exam 13: Special Contracts: Sale of Goods

The Sale of Goods Act implies a

Which of the following statements is TRUE with respect to writing requirements under a Sale of Goods Act?

The Sale of Goods Act implies a term that goods will match their description.Which of the following statements is TRUE with respect to that term?

If goods are sold by both description and sample, the goods must

Which of the following statements is TRUE as a general rule?

Which of the following remedies can only ever be used if the buyer is insolvent?

Sunni purchased a stereo system from an electronics store.The total purchase price was $3000.He paid $2000 with a cheque and $1000 with a credit card.That transaction is governed by the Sale of Goods Act.

Alison bought a computer from Hugh.The parties never actually met.Alison saw a selection of computers on Hugh's web site and ordered one by telephone.Alison will be able to bring an action against Hugh on the basis of an implied condition that the goods match their description

Honoria agreed to sell a shipment of widgets to Klaus on credit.Following the terms of the contract, Honoria delivered the widgets to an independent carrier and instructed the carrier to deliver the shipment to Klaus's warehouse.Which of the following statements is TRUE?

Risk Management and Sources of Law

Litigation and Alternative Dispute Resolution

Introduction to Torts

Intentional Torts

Miscellaneous Torts Affecting Business

Negligence

The Nature and Creation of Contracts

Consideration and Privity

Representations and Terms

Contractual Defects

Discharge and Breach

Contractual Remedies

Real Property: Interests and Leases

Real Property: Sales and Mortgages

Personal Property: Bailment and Insurance

Intellectual Property

Electronic Commerce

Agency and Other Methods of Carrying on Business

Basic Forms of Business Organizations

Legal Rules for Corporate Governance

Secured Transactions

Dealing With Bankruptcy and Insolvency

Government Regulation of Business

Individual Employment

Organized Labour

Online: Special Contracts: Negotiable Instruments

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