Deck 22: Performance and Breach of Sales and Lease Contracts

Question 1

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

Answer 1

False

Question 2

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

Answer 2

True

Question 3

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

Answer 3

True

Question 4

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

Question 5

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 6

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

Question 7

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

Question 8

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

Question 9

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

Question 10

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

Question 11

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

Question 12

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 13

In most sales,sellers warrant that they have good and valid title to the goods sold.

Question 14

In sales law,a warranty is an assurance by one party of the existence of a fact on which the other party can rely.

Question 15

The principle of good faith applies to both parties to a sales contract.

Question 16

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

Question 17

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

Question 18

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

Question 19

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

Question 20

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

Question 21

Implied warranties can arise from a "usage of trade."

Question 22

A warranty of title cannot be disclaimed.

Question 23

To be merchantable,goods must be at least average,fair,or medium-grade quality.

Question 24

Statements of opinion and value usually create express warranties.

Question 25

Eve'sPastries & Pies contracts with Fruits 2 You,Inc.,for strawberries to be delivered by Kool Refrigerated Trucking. On the day of delivery,the refrigeration on Kool's trucks is not working. Fruits 2 You

A)may ship the strawberries to Eve's using a different carrier.
B)must cancel the contract.
C)must wait to ship the strawberries until Kool has fixed its trucks.
D)must ship the goods through a different carrier and pay Eve damages.

Question 26

Puffery creates an express warranty.

Question 27

To specifically disclaim an implied warranty of fitness for a particular purpose,a seller or lessor must mention the word fitness.

Question 28

Every sale or lease by a merchant who deals in goods of the kind sold or leased automatically gives rise to an implied warranty of merchantability.

Question 29

Statements of fact made during the bargaining process are express warranties.

Question 30

Promises of fact made during the bargaining process are express warranties.

Question 31

If a warranty of infringement is breached and the buyer is sued by the claim holder,the buyer need not notify the seller of the lawsuit.

Question 32

In sales law,failing to examine the goods and refusing to examine the goods are considered the same thing.

Question 33

To specifically disclaim an implied warrant of merchantability,a seller or lessor must mention the word merchantability.

Question 34

A product is unmerchantable if an accident could arise in connection with the goods.

Question 35

Express warranties can be found in a seller's brochure.

Question 36

Fruited Plain,Inc.,agrees to sell high-quality grain seed to Grange Co-op. Because only half of the quantity ordered is available,Fruited Plain 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,Fruited Plain can

A)attempt to cure the defect.
B)cancel the contract.
C)recover the amount of its expected profit plus incidental damages.
D)resell or dispose of the seed and hold Grange Co-op liable for any loss.

Question 37

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)place the goods into the hands of a carrier.

Question 38

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 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

A seller or lessor can disclaim all oral express warranties by including in the contract a written disclaimer.

Question 41

Phoenix,a salesperson for Quality Fruit,Inc.,showsRobert,a buyer for Sweet Home Fruit Company,samples of peaches,stating that any ship-ment will match the samples. This statement is

A)an express warranty.
B)an express warranty.
C)a warranty of title.
D)puffery.

Question 42

Global Talk Corporation sells phones and other mobile devices. Under most cir-cum-stances,Global Talk will be presumed to have warranted that its title to the goods is

A)the same as each brand's name.
B)none of the choices-a warranty of title is not presumed.
C)good and valid.
D)the best that money can buy.

Question 43

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 44

Blanche,a salesperson for Custom Restaurant Equipment,Inc.,showsDylan,a buyer for Eat n' Dine Company,display items in Custom's showroom,stating that any purchased equipment will match the display. This statement is

A)an express warranty.
B)an implied warranty.
C)an implied warranty.
D)puffery.

Question 45

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 Prefabricatorsis enti-tled 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 46

Precision Parts,Inc.,and QuikFix Auto stores enter into a contract for a sale of specific auto parts. Precision Partsships parts that do not meet the specifications. QuikFix 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 47

Vehicle Wholesale Company and Walt's Retail Motors enter into a contract for a sale of used cars. Vehicle Wholesale assures Walt's that it has valid title to the vehicles. Under the UCC,warranties of title arise

A)automatically in most sales contracts.
B)only if the buyer asks for such a warranty.
C)only if the seller expresses such a warranty.
D)only in conjunction with lease contracts,not sales contracts.

Question 48

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 & Tripsto accept the rafts and pay for them.
B)recover the contract price from Tours & Tripsbut must hold the rafts for it.
C)recover the contract price from Tours & Tripsand keep the rafts.
D)recover the contract price from Tours & Tripsbut must destroy the rafts.

Question 49

Greg,a salesperson for Home Improvement Center,tells Irena,"This is the best floor sander I've ever seen." This statement is

A)an express warranty.
B)an implied warranty.
C)a warranty of title.
D)puffery.

Question 50

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)forceInFlo to accept and pay for the goods.
B)requireInFlo to find a buyer for the goods.
C)resell the goods and recover any damages from InFlo.
D)do nothing.

Question 51

Daily 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 22-1. 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

Daily 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 22-1. 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 53

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 54

Roadway Paving Company contracts to buy some paving equipment from Stonework Earthmovers,Inc. Before either party performs,Stonework sells its assets to T-Square Corporation. On learning of the sale,Roadway is concerned about its contract with Stonework. Roadway should

A)demand assurances of performance from Stonework.
B)consider the contract repudiated and sue Stonework for breach.
C)buy the equipment from a different firm and bill Stonework for the price.
D)buy the equipment from a different firm and bill T-Square for the price.

Question 55

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 Co-op.
C)no one.
D)the appropriate state government agency.

Question 56

Pebble Leasing Corporation and Quarry Rock & Gravel Company enter into a lease of three excavators. Under the perfect tender rule,Pebble Leasing must ship or tender goods to Quarry Rock & Gravel that,with respect to the contract description,conform

A)to the best of Pebble's ability under the circumstances.
B)reasonably.
C)in every way.
D)substantially.

Question 57

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! Marketscan

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 58

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

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

Question 59

Beef Burgers,Inc. contracts to buy five hundred head of cattle from Calf & CowFarms. Before Calf & Cow delivers,an outbreak of disease causes a quarantine of the farm. In this circumstance,the perfect tender rule

A)applies to both parties.
B)no longer applies.
C)applies only to Beef Burgers.
D)applies only to Calf & Cow.

Question 60

Arnold buys a backhoe from Big Dig Equipment Inc. Arnold is unaware that Credit Collection Company holds a lien against the backhoe when he buys it. If Credit Collection repossesses the backhoe,Arnold can

A)recover from Big Dig for breach of warranty.
B)do nothing.
C)file criminal charges against Big Dig and Credit Collection.
D)recover damages from Credit Collection for breach of warranty.

Question 61

Band Instruments,Inc.,sells seventy-six trombones to Community & School Band Source,Inc. To avoid liability for most implied warranties,Band Instruments should state in writing that the trombones are sold

A)as is.
B)by a merchant.
C)in perfect condition.
D)with no known defects.

Question 62

Stella bought a cup of coffee at the Roasted Bean Drive-Thru. The coffee had been heated to 190 degrees and consequently had dissolved the inside of the cup. When Stella lifted the lid,the cup collapsed,spilling the contents on her lap. To recover for th

Question 63

Dependable Appliances,Inc.,and Elaine enter into a contract for a sale of kitchen appliances. Dependable,a merchant who deals in goods of the kind sold,notes that its goods come with an implied warranty of merchantability. Under the UCC,this means that the goods are reasonably

A)fit for the buyer's particular purpose.
B)fit for the ordinary purpose for which such goods are used.
C)suitable for resale at an acceptable price.
D)the best quality that money can buy.

Question 64

Replay Sports Stores and SportsPower Products,Inc.,enter into a contract for a sale of trampolines. SportsPower Productsis a merchant who deals in goods of the kind sold. Under the UCC,an implied warranty of merchantability arises

A)automatically.
B)only if the buyer asks for such a warranty.
C)only if the seller expresses such a warranty.
D)only in conjunction with lease contracts,not sales contracts.

Question 65

Quade is an expert in twentieth-century art. Rachel visits Quade's gallery,seeking to buy artwork as an investment. Quade shows her a painting that in his opinion is by Picasso. Quade's statement is

A)an express warranty.
B)an implied warranty.
C)a warranty of title.
D)puffery.

Question 66

Beginners Run Ski Shop sells a pair of skis to Crystal. When Crystal first uses the skis,they snap in two. The cause is something that Beginners Run did not know about and could not have discovered. Beginners Run breached

A)the merchant's implied duty of inspection.
B)the implied warranty of merchantability.
C)no duty or warranty because Beginners Run knew nothing about the defect that made the goods unsafe.
D)no duty or warranty because consumers should reasonably expect to occasionally find a product that does not work as warranted.

Question 67

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 68

Freddi buys bike shoes from Get n' Gear Store,telling the clerk that she wants the shoes to compete in High Pace Triathlon. The shoes break apart during the competition,caus-ing Freddi to be injured in a fall. Get n' Gear most likely breached

A)an express warranty.
B)an implied warranty of fitness for a particular purpose.
C)an implied warranty of merchantability.
D)a warranty of title.

Question 69

Chord Guitars Inc. sells guitars and other stringed instruments to consumers. A Chord salesperson says to a potential customer,"This Chord is the best guitar you'll find anywhere,even online." This statement is

A)an implied warranty of fitness for a particular purpose.
B)an implied warranty of merchantability.
C)an express warranty.
D)puffery.

Question 70

MotorCo Inc. makes and sells auto parts to retail repair services,vehicle sales outlets,and consumer parts stores. On one MotorCo box is a label that reads "Contains one gross (144)sparkplugs,assorted sizes." This statement is

A)an implied warranty of fitness for a particular purpose.
B)an implied warranty of merchantability.
C)an express warranty.
D)none of the choices.

Question 71

Watercourse Pipe Company includes in its contracts a provision that reads,in large red letters,"There are no warranties that extend beyond the description on the face hereof." This disclaimer negates

A)the implied warranty of fitness for a particular purpose.
B)the implied warranty of merchantability.
C)the implied warranty of title.
D)none of the choices.

Question 72

Kramer goes to Lawn & Garden to tune up his mower. Martin,the service tech-ni-cian,learns that Kramer's lawn is overgrown and rocky and advises the use of a certain type of oil,plug,filter,and blade. Later,while Kramer is mowing his lawn,the mower breaks down due to the use of the items recommended by Martin. Kramer may recover from Lawn & Garden for breach of

A)an express warranty.
B)an implied warranty of fitness for a particular purpose.
C)an implied warranty of merchantability.
D)a warranty of title.