Deck 20: Performance and Breach

Question 1

An installment contract is a single contract that requires or authorizes delivery in two or more separate lots to be paid for in one payment. 

Answer 1

False

Question 2

With an installment contract,a buyer or lessee can reject a single installment on any pretext. 

Answer 2

False

Question 3

The seller's or lessor's major obligation under a sales contract is to tender conforming goods to the buyer or lessee. 

Answer 3

True

Question 4

If goods in every respect conform to a contract,the buyer or lessee does not have a right to reject the goods. 

Question 5

A shipment contract requires a seller to ship goods by a carrier. 

Question 6

The doctrine of commercial impracticability only extends to problems that are unforeseen. 

Question 7

Until the time for performance under a contract expires,the seller has a right to cure. 

Question 8

Under the UCC,there are no exceptions to the perfect tender rule. 

Question 9

In contracts involving a carrier,a seller can complete performance through a shipment contract or a destination contract. 

Question 10

The obligation of good faith underlies every contract under the Uniform Commercial Code. 

Question 11

The term cure refers to the right of the buyer to reject,adjust,or replace nonconforming goods. 

Question 12

The seller's right to cure does not affect the right of the buyer or lessee to reject goods. 

Question 13

If a contract specifies a certain carrier,a substitution of a different carrier for any reason breaches the contract. 

Question 14

Tender must occur at a reasonable hour and in a reasonable manner. 

Question 15

There are no circumstances under which a contract can be tendered by multiple deliveries of goods. 

Question 16

Under the UCC,if a contract does not designate the place of delivery for the goods,and the buyer is expected to pick them up,then the place of delivery must be at a location halfway between the seller's place of business and the buyer's place of business. 

Question 17

Tender of delivery requires that the seller or lessor hold the goods at the buyer's or lessee's disposal,but not that the goods be conforming. 

Question 18

An installment contract is breached if a seller tenders any nonconforming goods. 

Question 19

Under the UCC,a seller's tender of goods that do not conform in every way to a contract is still a valid tender. 

Question 20

Under the perfect tender rule,if tender is not perfect,the seller is obligated to try again. 

Question 21

If either the goods or their tender fails to conform to the contract in any respect,the buyer or lessee must reject all of the goods. 

Question 22

Unless the parties agree otherwise,the buyer or lessee has an absolute right to inspect the goods before making payment. 

Question 23

A buyer's failure to cover will bar him or her from using any other remedies available under the UCC. 

Question 24

If a lessee breaches a contract,the lessor can cancel the contract. 

Question 25

Unless otherwise agreed,inspection of goods can take place at any reasonable place and time and in any reasonable manner. 

Question 26

If a buyer repudiates a contract,the seller can bring an action to recover damages. 

Question 27

Clear Day Company,which is based in Delaware,agrees to sell fifty windows,currently stored in Florida,to Far Vu,Inc.,which is based in Hawaii.Absent an agreement to the contrary,the place of delivery is in​ 

A) ​California. 
B) ​Delaware. 
C) ​Florida. 
D) ​Hawaii.

Question 28

Acceptance of goods precludes the buyer or lessee from exercising the right of rejection. 

Question 29

Elegant Carpets,Inc.,and Fantastic Floors Stores enter into a contract for a sale of carpeting.Under a shipment contract,the seller must​ 

A) ​allow the buyer to reject the goods for any reason. 
B) ​deliver the goods to a particular destination. 
C) ​inspect the goods before shipping them. 
D) ​place the goods into the hands of a carrier.

Question 30

In the absence of any specific agreements,the buyer or lessee must make payment after receipt of the goods. 

Question 31

If goods identified to a contract are destroyed through no fault of either party,both parties are excused from performance. 

Question 32

Pleasant Valley Dairy agrees to sell a certain quantity of ice cream to Coffee & Dessert Caterers,but their contract does not specify the address at which the goods are to be delivered.If the parties fail to specify the address before the delivery date​ 

A) ​Pleasant Valley Dairy is excused for any resulting delay. 
B) ​Pleasant Valley Dairy is liable for any resulting delay. 
C) ​the time for delivery is extended with a price adjustment for the delay. 
D) ​the contract is canceled.

Question 33

If a seller fails to deliver the goods,the buyer's damages do not include all losses resulting from this course of events. 

Question 34

Big Eggs,Inc.agrees to supply Omelet Express with five hundred eggs.Big Eggs cannot reasonably ask Omelet Express to pick up the eggs at​ 

A) ​1:00 P.M. 
B) ​2:00 P.M. 
C) ​3:00 P.M. 
D) ​4:30 A.M.

Question 35

If,before the time for performance,a buyer communicates an intent not to perform,the seller can consider the buyer in breach and pursue a remedy.

Question 36

A buyer who rightfully rejects nonconforming goods may obtain cover or cancel the contact,but may not seek damages. 

Question 37

If a buyer wrongfully refuses to accept goods,the seller can bring an action to recover the damages sustained. 

Question 38

Revocation of acceptance is not effective until notice is given to the seller or lessor. 

Question 39

Fuel Connector Products,Inc.,agrees to sell Go-Flo,Inc.,a certain quantity of hose couplings and fittings,but the contract does not specify a place of delivery.Go-Flo is expected to pick up the goods.The place of delivery is​ 

A) ​Fuel Connector's place of business. 
B) ​Go-Flo's place of business. 
C) ​the current location of the hose couplings and fittings. 
D) ​the U.S. Postal Service office nearest to Go-Flo's place of business.

Question 40

When a seller refuses to deliver goods that are unique,a buyer can obtain specific performance. 

Question 41

Fact Pattern 20-1Daily Bread Bakeries, Inc., contracts to buy all of its ingredient requirements for bread making, at a certain minimum per year, from Enriched Flour & Grain Corporation for six years. After three years, Daily Bread tells Enriched that it plans to sell its assets to Flat Bread Shops, Inc. Flat Bread refuses to assure Enriched that it will continue Daily Bread's contract.
Refer to Fact Pattern 20-1.Enriched can 

A) ​assign its rights under the contract but cannot terminate it. 
B) ​terminate the contract and seek damages. 
C) ​suspend performance under the contract until Enriched is fully paid. 
D) ​do nothing.

Question 42

Levi's Toy Store orders one hundred board games from Big Board Games Warehouse.When the games are delivered,they are all missing pieces.Levi's Toy Store rejects the shipment.Big Board Games wants to cure.Big Board Games must​ 

A) ​promptly notify Levi's Toy Store of the intent to cure. 
B) ​pay Levi's Toy store a cure fee. 
C) ​send a truck to pick up the nonconforming goods before the end of the business day. 
D) ​create a new contract with Levi's Toy Store.

Question 43

Sof' Chair Company contracts to deliver 100 chairs to Stuffy Furnishings Store on May 1 for which Stuffy agrees to pay.Sof' tells Stuffy on April 15 that delivery will be delayed until June 1.Stuffy may 

A) ​await performance, sue Sof', or suspend its own performance. 
B) ​only await Sof's performance for a commercially reasonable time. 
C) ​only sue Sof' for breach of contract. 
D) ​only suspend its own performance.

Question 44

Sally's Sweet Fruits contracts with Fruits to You,Inc.for a delivery of two hundred pounds of strawberries to be delivered by Keep Kool Trucking,a trucking company with refrigerated trucks.On the day of delivery,the refrigeration units on Keep Kool's trucks are not working.Fruits to You​ 

A) ​may ship the goods to Sally's using another trucking company with refrigerated trucks. 
B) ​must refund Sally's money and cancel the contract. 
C) ​must wait to ship the strawberries until Keep Kool has fixed its trucks. 
D) ​must ship the goods through a different carrier and pay Sally incidental damages.

Question 45

Silas Paving Co.contracts to buy some construction machinery from Massive Earthmovers,Inc.Before either party performs,Massive sells its assets to Phoenix Equipment Corp.On learning of the sale,Silas is concerned about its contract with Massive.Silas should 

A) ​demand assurances of performance from Massive. 
B) ​consider the contract repudiated and sue Massive for breach. 
C) ​buy the machinery from a different supplier and bill Massive for the price. 
D) ​buy the machinery from a different supplier and bill Phoenix for the price.

Question 46

Commercial Leasing Corporation and Quarry Construction Company enter into a contract for a lease of three excavators.Under the perfect tender rule,Commercial Leasing must ship or tender goods to the lessee that​ 

A) ​approximately conform to the contract description. 
B) ​entirely conform to the contract description in most ways. 
C) ​conform to the contract description in every way. 
D) ​substantially conform to the contract description.

Question 47

On May 1,Garage Prefabricators,Inc.,agrees to sell four portable garages to Hiway Truck Service Center.Five days later,Hiway refuses delivery and cancels the contract.Garage Prefabricators is entitled to 

A) ​force Hiway to accept the garage. 
B) ​recover any damages from Hiway but not resell the garage. 
C) ​resell the garage and recover any damages from Hiway. 
D) ​resell the garage but not recover any damages from Hiway.

Question 48

Screen Perfect,Inc.,and TV Stores enter into a contract for a sale of high-definition television sets.Screen Perfect ships goods that do not exactly conform to the contract in some details.TV Stores​ 

A) ​cannot reject the entire shipment. 
B) ​can reject the entire shipment. 
C) ​must accept the entire shipment. 
D) ​must reject the entire shipment.

Question 49

Shane's Auto Parts orders twenty tires from Tough Tires,Inc.The truck delivering the tires to Shane's is in an accident and ten of the tires are damaged.Shane's Auto Parts​ 

A) ​cannot reject the entire shipment. 
B) ​must still pay for all twenty tires at the original contract price. 
C) ​may inspect the tires and accept the shipment with a reduction in price. 
D) ​must reject the entire shipment.

Question 50

Business Rental Corporation (BRC)and Cartage Trucking Company enter into a contract for a lease of ten hydraulic lifts.Under the perfect tender rule,BRC must ship or tender goods to the lessee that​ 

A) ​approximately conform to all of the details of the contract. 
B) ​entirely conform to the contract except in one or two details. 
C) ​exactly conform to the contract in every detail. 
D) ​substantially conform to the contract in most details.

Question 51

Fact Pattern 20-1Daily Bread Bakeries, Inc., contracts to buy all of its ingredient requirements for bread making, at a certain minimum per year, from Enriched Flour & Grain Corporation for six years. After three years, Daily Bread tells Enriched that it plans to sell its assets to Flat Bread Shops, Inc. Flat Bread refuses to assure Enriched that it will continue Daily Bread's contract.
Refer to Fact Pattern 20-1.Flat Bread's refusal is 

A) ​a justified response based on Flat Bread's relation to the contract. 
B) ​an assignment of Daily Bread's rights under the contract. 
C) ​a reasonable suspension of performance under the contract. 
D) ​a repudiation of the contract.

Question 52

Beef Burgers,Inc.contracts to buy five hundred steers from Fattening Feedlots.Before Fattening Feedlots can deliver the steers,there is an outbreak of disease in the feedlot,and all the cattle are quarantined.In this case the perfect tender rule​ 

A) ​applies to both parties. 
B) ​does not apply. 
C) ​applies only to Beef Burgers. 
D) ​applies only to Fattening Feedlots.

Question 53

On January 10,Winchester Pet Supplies orders fifty small dog collars from Quality Collars,Inc.to be delivered by January 15.On January 13,Quality Collars tenders fifty large dog collars.Winchester Pet Supplies rejects the shipment.Quality Collars has​ 

A) ​no right to cure. 
B) ​until January 15 to cure. 
C) ​until the end of the business day on January 13 to cure. 
D) ​unlimited time to cure.

Question 54

Kim's Pony Rides orders ten saddles from Little Horse Saddles,Inc.The sales contract states that if the saddles are defective,Kim's will allow Little Horse Saddles to repair or replace them instead of rejecting the shipment.When the saddles arrive,they are defective.In this case,the perfect tender rule​ 

A) ​does not apply. 
B) ​applies to both parties. 
C) ​applies only to Little Horse Saddles. 
D) ​applies only to Kim's Pony Rides.

Question 55

Fruit of the Plant,Inc.,agrees to sell a certain quantity of a high-quality grain seed to Grange Co-op.Fruit of the Plant can obtain only half of the quantity ordered,so the seller also ships a lesser quality seed in twice the amount of the remainder of the order for the same price.Grange Co-op rejects the lesser quality seed.With time for performance not yet expired,Fruit of the Plant can​ 

A) ​attempt to cure the defect. 
B) ​cancel the contract. 
C) ​recover the purchase price plus incidental damages. 
D) ​resell or dispose of the goods and hold Grange Co-op liable for any loss.

Question 56

Mineral Resource Company contracts to provide several manufacturers with tin.When a cartel of tin-producing countries suddenly embargoes future shipments of tin to Mineral Resource so that it cannot fulfill its contracts,the distributor​ 

A) ​can substitute some other material for the tin. 
B) ​is excused from the performance of its contracts. 
C) ​is liable for breach of contract. 
D) ​must still supply the tin needs of its customers.

Question 57

Hydro Source Company contracts to sell pumps,tanks,and water storage systems to Inflo Irrigation,Inc.Before the goods are delivered,Inflo indicates that it will not be able to pay.Hydro Source can 

A) ​force Inflo to accept and pay for the goods. 
B) ​require Inflo to find a buyer for the goods. 
C) ​resell the goods and recover any damages from Inflo. 
D) ​do nothing.

Question 58

Gold Medical Supply Company and Home & Hospice Care,Inc.,enter into a contract for a sale of health care equipment and supplies.Under either a shipment contract or a destination contract,the seller must​ 

A) ​allow the buyer to reject the goods for any reason. 
B) ​deliver the goods to a particular destination. 
C) ​place the goods into the hands of a carrier. 
D) ​give the buyer any necessary documents of title.

Question 59

Pine Mills Corporation and Ur-Choice Lumberyards enter into a contract for a sale of plywood.Under a destination contract,the seller must​ 

A) ​allow the buyer to reject the goods for any reason. 
B) ​deliver the goods to a particular destination. 
C) ​inspect the goods before tendering their delivery. 
D) ​place the goods into the hands of a carrier.

Question 60

Garden Field Farms and Haute Gourmet Restaurant,Inc.,enter into a contract for a sale of lettuce.After Garden Field ships the lettuce but before Haute Gourmet receives it,the buyer declares bankruptcy.Garden Field can stop delivery of the goods in transit​ 

A) ​only if the quantity is deficient. 
B) ​only if the quantity exceeds the contract amount. 
C) ​only if the quantity is at least a truckload. 
D) ​regardless of the quantity.

Question 61

Signal Sets Company contracts to deliver one hundred 52-inch plasma high-definition television sets to a new retail customer,Tuner TV Store,on May 1,with payment to be made on delivery.Signal tenders delivery in its own truck.Tuner's manager notices that some of the cartons have scrape marks.Tuner's owner phones Signal's office and asks whether the sets might have been damaged as they were being loaded.Signal assures Tuner that the sets are in perfect condition.Tuner tenders Signal a check,which Signal refuses,claiming that the first delivery to new customers is always for cash.Tuner promises to pay the cash within two days.Signal leaves the sets with Tuner,which stores them in its warehouse pending its "Grand Opening Sale" on May 15.Two days later,Tuner's stocker opens some of the cartons and discovers that a number of the sets are damaged beyond ordinary repair.Signal claims Tuner has accepted the sets and is in breach by not paying on delivery.Will Signal succeed on these claims? Explain.

Question 62

Precision Parts,Inc.,and Quality Auto stores enter into a contract for a sale of specific auto parts.Precision Parts ships parts that do not meet the specifications.Quality Auto 

A) ​cannot reject the entire shipment. 
B) ​can reject the entire shipment. 
C) ​must accept the entire shipment. 
D) ​must reject the entire shipment.

Question 63

Loading Ramps Plus Inc.contracts to sell sixteen aluminum loading ramps to Moving Services,Inc.Loading Ramps ships the ramps,which Moving Services accepts but does not pay for.Loading Ramps can​ 

A) ​sue to recover the purchase price plus incidental damages. 
B) ​sue to recover the purchase price minus incidental damages. 
C) ​resell the ramps to any buyer willing to reclaim them from Moving Services. 
D) ​require Moving Services to revoke its acceptance of the ramps.

Question 64

River Gear Company and Tours & Trips,Inc.,enter into a contract on August 1 for the sale of fifty inflatable river rafts.Tours & Trips cancels the con-tract ten days later.River Gear is unable to sell the rafts to another buyer.River Gear can 

A) ​force Tours & Trips to accept the rafts and pay for them. 
B) ​recover the contract price from Tours & Trips but must hold the rafts for it. 
C) ​recover the contract price from Tours & Trips and keep the rafts. 
D) ​recover the contract price from Tours & Trips but must destroy the rafts.

Question 65

Oh! Wow! Markets,Inc.,rejects a shipment of turkey that does not conform to its contract with Poultry Processing Corporation,but is unable to obtain instructions from the seller.Oh! Wow! Markets can 

A) ​destroy the goods. 
B) ​cure the goods to make them conform to the contract. 
C) ​retain the goods without paying for them. 
D) ​reship or store the goods for the seller.

Question 66

Owen and Pablo enter into a contract for a sale of fifty Western saddles.Pablo pays,but Owen does not deliver.Pablo can normally recover as damages the difference between 

A) ​any loss avoided and any profit gained. 
B) ​the actual price and the hoped-for price. 
C) ​the contract price and the market price. 
D) ​the current prices in the parties' locations.

Question 67

Banquets & Parties (B&P)contracts to buy 1,000 uninflated balloons from Gas Bags,Inc.,for $1 per item.When the market price decreases to 50 cents per balloon,B&P refuses to go through with the deal.Gas Bags can recover 

A) ​$1,500. 
B) ​$1,000. 
C) ​$500. 
D) ​$0.

Question 68

Noni and Myra enter into a contract for a sale of clarinets and other wind instruments.Noni delivers,but Myra does not pay.Noni can normally recover as damages the difference between 

A) ​any loss avoided and any profit gained. 
B) ​the actual price and the hoped-for price. 
C) ​the contract price and the market price. 
D) ​the current prices in the parties' locations.

Question 69

Bayou Boats,Inc.,contracts for the sale of seven swamp boats to Eventide Fishing Tours.Bayou repudiates the contract.Eventide's recovery is measured at the time 

A) ​Bayou advertised the goods. 
B) ​Eventide ordered the goods. 
C) ​Eventide learned of the breach. 
D) ​Bayou knew that it would repudiate the contract.

Question 70

Refined Mills orders "Grade A" oats from Sweet Valley Farms to grind and sell to Town Co-op Grocery.Sweet Valley ships "Grade B" grain,which Refined Mills accepts.To recover damages for the nonconformity,Refined Mills must give notice of the breach within a reasonable time to 

A) ​Sweet Valley. 
B) ​Town. 
C) ​no one. 
D) ​the appropriate state government agency.

Question 71

Asian Noodle Company contracts to sell 1,000 cases of rice noodles to Bob's Bistros,Inc.,but refuses to deliver.Due to a rice shortage,Bob's right to obtain substitute goods for those that were due under the contract is the right to obtain 

A) cover. 
B) ​cure. 
C) ​tender. 
D) ​specific performance.

Question 72

Colby contracts in writing to sell his 2005 Dodge-brand pick-up truck to Efrem for $10,500.Colby agrees to deliver the truck on Friday,and Efrem promises to pay the $10,500 on the following Monday.On Thursday,Efrem tells Colby that he changed his mind and will not buy the truck.Over the weekend,Efrem changes his mind again and tenders $10,500 to Colby on Monday.Colby has not sold the truck to another party but refuses the tender and refuses to deliver.Efrem claims that Colby has breached their contract.Colby contends that Efrem's repudiation released him from his duty to perform under the contract.Who is correct,and why?