Deck 21: Performance of Sales Contracts

Question 1

Generally,the UCC uses the test of impossibility to determine if a person can be excused from performing his contractual obligations.

Answer 1

False
Explanation: In most situations,the UCC uses the test of commercial impracticability.

Question 2

The Uniform Commercial Code gives the contracting parties very little flexibility in deciding between themselves how they will perform a contract.

Answer 2

False
Explanation: The Uniform Commercial Code gives the parties great flexibility in deciding between themselves how they will perform a contract.

Question 3

If the goods delivered by the seller do not conform to the contract,the buyer need not pay for the units accepted at the price per unit provided in the contract.

Answer 3

False
Explanation: The buyer must pay for the units accepted at the price per unit provided in the contract.

Question 4

Once a buyer has accepted goods,he cannot later reject them unless at the time they were accepted,the buyer had reason to believe that the nonconformity would be cured.

Question 5

The buyer may reject an installment delivery only if the nonconformity substantially affects the value of that delivery and cannot be corrected by the seller in a timely fashion.

Question 6

If the goods required for the performance of a contract are destroyed without fault of either party prior to the time that the risk of loss passed to the buyer,the contract is voided.

Question 7

If no agreement is made regarding the place of delivery,then the goods are to be delivered at the seller's place of business.

Question 8

If no agreement is made between a buyer and seller on inspection,then the UCC indicates that a buyer may inspect the goods at any time the buyer chooses,as long as it is reasonable.

Question 9

According to the UCC,acceptance of shipped goods happens before the buyer inspects the commercial goods.

Question 10

If the buyer is not a merchant,then her obligation after rejection is limited to returning the goods to the seller.

Question 11

The UCC defines good faith as observance of reasonable commercial standards of fair dealing in the trade.

Question 12

Under the UCC,if a buyer treats goods as if he owns them,the buyer is considered to have accepted them.

Question 13

If the seller demands cash,the seller must give the buyer a reasonable amount of time to obtain it.

Question 14

If there is a conflict between the express terms of the contract and the past course of dealing between the parties,the express terms of the contract prevail.

Question 15

Under the Code,consideration is required to support a modification or rescission of a contract for the sale of goods.

Question 16

If a buyer has a basis for rejecting a delivery of goods,then the buyer can reject the goods any time after the delivery.

Question 17

A party can withdraw repudiation before the other party has cancelled the contract or has materially changed position by clearly indicating that the person intends to perform his obligations.

Question 18

If a buyer accepts a part of a commercial unit of goods,he is considered to have accepted only that part of the unit.

Question 19

Anticipatory repudiation is disallowed under the UCC.

Question 20

If the seller does not make a reasonable contract for delivery or notify the buyer and a material delay or loss results,the buyer has the right to reject the shipment.

Question 21

If there is a conflict between the express terms of the contract and trade usage,the:

A)past course of dealing between the parties will prevail.
B)seller is excused.
C)contract is voided.
D)express terms of the contract prevail.

Question 22

UCC section 1-203 makes what form of requirement on the buyer and seller?

A)Both must act in good faith.
B)Both must have signed the sales agreement.
C)Both must be residents of same state.
D)Both must have placed a security interest down on the contract.

Question 23

If the shipping terms are cash on delivery (COD),then the buyer:

A)need not pay for the goods if inspection is not allowed.
B)must pay for the goods if it is obvious without inspection that the goods do not conform to the contract.
C)must pay the expenses of inspection if the goods do not conform to the contract.
D)must pay for the goods before inspecting them unless they are marked "Inspection Allowed."

Question 24

If there is a conflict between the express terms of the contract and the past course of dealing between the parties,the:

A)past course of dealing between the parties will prevail.
B)express terms of the contract prevail.
C)contract is voided.
D)seller is excused.

Question 25

If no agreement is made on the place where the goods will be delivered,then the goods are to be delivered at:

A)a neutral location.
B)the buyer's place of business.
C)the buyer's warehouse.
D)the seller's place of business.

Question 26

In the case of a merchant,________ means honesty in fact as well as the observance of reasonable commercial standards of fair dealing in the trade.

A)course of dealing
B)usage of trade
C)good faith
D)caveat emptor

Question 27

If the goods are covered by a negotiable warehouse receipt,then the seller must:

A)notify the bailee about the buyer.
B)endorse the receipt and give it to the buyer.
C)obtain bailee's consent before selling his goods.
D)release the goods to the buyer.

Question 28

Is it possible for a party that has waived rights to a portion of the contract not yet performed to retract the waiver? Why?

A)Yes.The party will be able to immediately assert the late payments as grounds for later canceling the contract.
B)Yes.The party can give reasonable notice to the other party that strict performance will be required.
C)No.Once a party has waived rights to a portion of the contract,it will not be able to assert this as grounds for later canceling the contract.
D)Yes.The contract is assumed to be made in good faith.

Question 29

Pam enters into a contract with Jack to sell him 300 bales of hay.The bushels are kept in her warehouse,which is about 100 miles away from her place of business.The contract makes no express mention of the place of delivery.The place of delivery in such cases is:

A)Pam's place of business.
B)Pam's house.
C)Pam's warehouse.
D)Jack's house.

Question 30

Which of the following observations is true under the UCC?

A)Consideration is not required to support a modification of a contract for the sale of goods.
B)If there is a conflict between the express terms of the contract and trade usage,the trade usage will prevail.
C)The buyer or the seller cannot delegate their duties to someone else under any circumstance.
D)The UCC does not alter basic contract law when applied to performance of contracts.

Question 31

Pete contracts to sell Jill 100 widgets.The 100 widgets are located at Pete's business.The contract does not state a place of delivery.The place of delivery is:

A)Jill's place of business.
B)Jill's home.
C)Pete's place of business.
D)Pete's home,if this is different from his place of business.

Question 32

If all or part of the price of goods is payable in real property,then:

A)only the transfer of goods is covered by the law of sales of goods.
B)both the transfer of goods and the real property are covered by the law of real property.
C)both the transfer of goods and the real property are covered by the law of sales of goods.
D)only the transfer of the real property is covered by the law of real property.

Question 33

What does tender of delivery mean?

A)The seller must make the goods available to the buyer.
B)The buyer must accept and pay for the goods if they conform to the contract.
C)Where delivery is to be made in lots,the seller can demand the price of each lot upon delivery.
D)The goods are to be delivered at the buyer's place of business.

Question 34

Johnny LaRue sells men's jackets to men's clothing stores,including Melonville Man.Melonville Man orders a selection of men's jackets from LaRue's catalog,asking that LaRue select an assortment of goods for the buyer.LaRue takes advantage of this opportunity to get rid of the odd-sized jackets and those in pastel colors that are no longer popular.LaRue:

A)stuck to the express terms of the sales contract.
B)violated the good faith requirement under sales contracts.
C)followed the usual trade practice.
D)properly modified the contract.

Question 35

The buyer usually can inspect goods before payment except:

A)where payment is made by check.
B)when the goods are perishable.
C)where the goods are shipped COD.
D)when the buyer pays in a foreign currency.

Question 36

UCC section 2-301 outlines what basic duty of the buyer?

A)To pay a price on the goods that gives seller a profit
B)To designate an agent in each state the buyer operates
C)To accept and pay for conforming goods shipped by the seller
D)To be honest to creditors regarding the sales contract

Question 37

Customs and practices of the business that are known by people in the business and that are usually assumed by parties to a contract for goods of that type are known as ________.

A)usage of trade
B)warranties
C)courses of action
D)fair norms

Question 38

Which of the following is defined to mean "honesty in fact" in performing the duties assumed in the contract or in carrying out the transaction?

A)Course of dealing
B)Usage of trade
C)Caveat emptor
D)Good faith

Question 39

Sam agrees to make partial deliveries of goods over three months to Winston.The first delivery was late by two weeks.Why should Winston object to this late delivery?

A)Winston may be required to pay in advance for future deliveries.
B)Winston may waive his rights to cancel the contract if other deliveries are late.
C)Sam may cancel the contract.
D)Sam may be excused from performing all his contractual obligations.

Question 40

A buyer makes payment for goods accepted using a check.If the bank refuses to pay the check,the buyer:

A)has still satisfied the duty to pay for the goods.
B)must give the goods back to the seller.
C)has the right to retain the goods.
D)can be excused from the obligation.

Question 41

After entering into a contract,a buyer becomes concerned that the other party may not be able to perform his contract obligations.The buyer demands assurance from the other party that the contract will be performed.What is the maximum time period that the buyer would have to wait before considering the other party has repudiated the contract?

A)90 days
B)10 days
C)30 days
D)365 days

Question 42

Bobby goes to Sammy's Electronics to buy a CD player.In testing one model,Bobby notices that the "scan" function does not allow scanning once a CD is playing.Bobby purchases the model despite this without mentioning the defect to Sammy.Bobby takes the CD player to his office where he uses it for three months before deciding that he wants to return it.Under these circumstances:

A)Bobby has rejected the CD player.
B)Bobby has accepted the CD player.
C)if Bobby informs Sammy of the defect now,he can reject the CD player.
D)a court will not consider Bobby to have accepted the CD player because it is defective.

Question 43

In which of the following situations can a buyer revoke acceptance of nonconforming goods?

A)The buyer accepted them with knowledge of the nonconformity,because they were the only option available in the market.
B)The buyer accepted the nonconforming goods because the seller could not cure the defect.
C)The price of the goods fell in the general market.
D)The nonconformity substantially impaired the value of the goods.

Question 44

Which of the following can a buyer do if the goods delivered by the seller do not conform to the contract?

A)Accept only part of a commercial unit and reject the rest
B)Accept all of them but not make the payment
C)Accept a commercial unit and withhold payment for the accepted portion
D)Accept any commercial units and reject the rest

Question 45

Under UCC section 2-612,what may the seller offer if the goods shipped were rejected due to nonconformity?

A)Replace the defective goods
B)Seek commercial arbitration of the dispute
C)Charge the buyer for the shipping and cost of remaking the goods
D)Refuse to take the defective goods back

Question 46

Bob contracts to sell Ben 20 bales of hay.A bale is the accepted commercial unit in hay transactions.Ben accepts only 9 1/5 of the 20 bales.Under the UCC,Ben is considered to have accepted:

A)all 20 bales.
B)10 bales.
C)9 bales.
D)nothing.

Question 47

Which of the following should a buyer,who is a merchant,do if the rejected goods are perishable?

A)The buyer must make a reasonable effort to sell the goods.
B)The buyer should store the goods for the seller.
C)The buyer should reship them to the seller.
D)The buyer should immediately make the payment.

Question 48

A buyer who is not a merchant rejects nonconforming goods that are not perishable.She:

A)may destroy the goods.
B)must sell the goods for the seller.
C)must hold the goods till the seller is willing to take them back.
D)need not return the goods to the seller.

Question 49

Section 2-608 of the UCC gives the buyer what right in sales contracts?

A)The right to revoke a sales contract within a reasonable period for nonconformity
B)The right to accept fewer units from the seller in order to make the agreement profitable
C)The right to place sales agreement on hold until new credit can be obtained
D)The right to pay less than agreed upon price if the agreement is not profitable

Question 50

Bob contracts to sell Ben 20 bales of hay at $10 per bale.A bale is the accepted commercial unit in hay transactions.Ben accepts only 9 1/5 of the 20 bales.Ben will have to pay ________.

A)$100
B)$95
C)$150
D)$15

Question 51

Where the goods are to be delivered in installments,an installment delivery may be rejected only if the nonconformity substantially affects the value of that delivery and:

A)if payment is to be made as per the contract price.
B)if the nonconformity cannot be corrected by the seller.
C)if the buyer accepted the goods with full knowledge of the nonconformity.
D)if payment has already been made.

Question 52

Which of the following is not an option for the buyer if the goods delivered by the seller do not conform to the contract?

A)Reject all of the goods
B)Accept all of them
C)Accept only part of a commercial unit and reject the rest
D)Accept any commercial units and reject the rest

Question 53

A buyer who is not a merchant rejects nonconforming goods.She:

A)must return the goods to the seller.
B)must sell the goods for the seller.
C)must hold the goods for the seller for a reasonable time.
D)may destroy the goods.

Question 54

In which of the following situations can a buyer revoke acceptance of nonconforming goods?

A)The buyer accepted them without knowledge of the nonconformity because of the difficulty of discovering the nonconformity.
B)The buyer accepted them with knowledge of the nonconformity,because they were the only option available in the market.
C)The price of the goods fell in the general market.
D)The buyer accepted the nonconforming goods because the seller could not cure the defect.

Question 55

Which of the following occurs when a buyer,after having a reasonable opportunity to inspect the goods,either indicates that he will take them or fails to reject them?

A)Rejection of goods
B)Assignment of goods
C)Revocation of rights
D)Acceptance of goods

Question 56

If the party who repudiated the contract changes his mind,the repudiation can be withdrawn:

A)before the other party has cancelled the contract.
B)after the other party has materially changed position.
C)at any point in time.
D)even if the contract has been cancelled.

Question 57

If a buyer has a basis for rejecting a delivery of goods,the buyer:

A)should not ask the seller to reship conforming goods.
B)will still be liable to the seller for breach of the sales contract.
C)need not act within a specified amount of time.
D)must give the seller notice of the rejection.

Question 58

In which of the following situations can a buyer revoke acceptance of nonconforming goods?

A)The buyer accepted them with knowledge of the nonconformity,because they were the only option available in the market.
B)The buyer accepted the goods because of the seller's assurances that it would cure the defect.
C)The price of the goods fell in the general market.
D)The buyer accepted the nonconforming goods because the seller could not cure the defect.

Question 59

Under a(n)________,the seller's bank agrees to assume liability on the letter of credit.

A)confirmed letter of credit
B)advised letter of credit
C)negotiable bill of lading
D)revocable letter of credit

Question 60

Which instrument enables the seller's bank to act as an agent for collection of the due amount from the buyer?

A)Confirmed letter of credit
B)Advised letter of credit
C)Negotiable bill of lading
D)Draft

Question 61

The seller's obligation to tender delivery is satisfied when the seller:

A)makes the goods available at reasonable hours for a reasonable period of time.
B)makes the goods available at reasonable hours only.
C)makes the goods available for a reasonable time period only.
D)notifies the buyer when to take possession of the goods.

Question 62

In the event goods are held by a bailee,which of the following is true about risk of loss?

A)The buyer has the risk of loss.
B)Risk of loss remains with the seller until the buyer retrieves the goods from the bailee.
C)Risk of loss remains with the seller until the bailee agrees to hold the goods for the buyer.
D)The bailee has the risk of loss.

Question 63

If the goods in the possession of a bailee are not covered by a negotiable warehouse receipt,then the seller must:

A)provide a receipt to the buyer.
B)notify the bailee that it has sold the goods to the buyer and obtain the bailee's consent to hold the goods.
C)authorize the goods to be held for the buyer.
D)tender the goods to the buyer.

Question 64

If a contract does not state the method of payment,which of the following is likely to be unacceptable?

A)Foreign currency
B)Cash
C)Check
D)Credit card

Question 65

If the parties do not agree as to whether the goods are to be delivered in a single delivery or in installments,then:

A)a single delivery must be made.
B)the goods must be delivered in several lots or installments.
C)the seller has the option to perform a single delivery or installments.
D)the buyer has the option to demand a single delivery or installments.

Question 66

In most situations,the UCC uses the test of ________ for determining when a person is excused from performing contractual obligations.

A)commercial impracticability
B)superior knowledge
C)frustration of purpose
D)impossibility

Question 67

A(n)________ occurs when the buyer and/or the seller delegates their duties or rights to someone else.

A)major modification
B)transfer
C)consignment
D)assignment

Question 68

A(n)________ occurs when a party provides confidence or informs the other party positively.

A)assurance
B)assignment
C)delegation
D)repudiation

Question 69

General contract law uses the test of ________ for determining when a person is excused from performing contractual obligations.

A)commercial impracticability
B)superior knowledge
C)frustration of purpose
D)impossibility

Question 70

Which of the following statements about the buyer's right of inspection is false?

A)Absent an agreement to the contrary,the buyer has the right to inspect the goods before paying for them.
B)If the buyer pays for the goods before inspecting them,he will not be deprived of remedies against the seller if the goods are nonconforming.
C)Even if the goods are nonconforming,the buyer cannot recover inspection costs from the seller.
D)If the goods conform to the contract,the buyer must pay the expenses of inspection.

Question 71

In the case in the text,Grace Label,Inc.v.Kliff,the court held that:

A)the parties' course of dealing was irrelevant in deciding whether Kliff breached the contract because Barcel was responsible for printing the cards.
B)course of dealing between the parties was admissible to explain or supplement the contract.
C)course of dealing between two parties is irrelevant when a third party that has never been a party to a contract before is part of the agreement at issue.
D)course of dealing between the parties demonstrating that Barcel was reasonable in assuming that the same card material would be acceptable.

Question 72

The goods required for the performance of a contract are destroyed without fault of either party prior to the time that the risk of loss passed to the buyer.In this case,

A)the contract cannot be cancelled.
B)the contract is voided.
C)the seller will not be excused.
D)the seller has to make good for the loss.

Question 73

If unforeseen conditions cause a partial inability to make delivery of the goods and thus make performance impracticable,then:

A)the seller is readily excused from making delivery.
B)the seller can unilaterally annul the contract.
C)the seller must allocate production in any fair and reasonable manner among his customers.
D)the buyer is required to fully take the risk of loss.

Question 74

Which of the following statements about assignments is true?

A)Parties cannot delegate their duties,regardless of what the contract dictates.
B)Parties cannot assign their right to receive payment.
C)Parties cannot assign their right to receive goods.
D)Parties cannot delegate their duties if the quality of performance may differ.

Question 75

If the parties do not have an agreement stating otherwise,the goods are to be delivered at the seller's business.If the seller does not have a place of business,and the goods are located at the seller's home,then delivery is to be made at:

A)the buyer's place of business.
B)the buyer's home.
C)the seller's home.
D)the seller's warehouse.

Question 76

A contract calls for Baked Goods,Inc. ,a bakery,to deliver fresh cookies to a coffee shop,The Coffee Cup,every Monday and for The Coffee Cup to pay on delivery.Baked Goods regularly delivers the cookies on Thursday and The Coffee Cup pays and never objects to the late deliveries.One Thursday,The Coffee Shop refuses the delivery and wants to cancel the contract.Which of the following statements is true?

A)The Coffee Cup can cancel the contract because Baked Goods has breached it.
B)The Coffee Cup must give Baked Goods an opportunity to cure the error.
C)The Coffee Cup cannot cancel the contract because it failed to give Baked Goods reasonable notice of its dissatisfaction.
D)The Coffee Cup cannot cancel the contract because it waived its right by accepting the previous late deliveries.

Question 77

________ is a doctrine under which a party to a contract is relieved of his or her duty to perform when that performance has become undoable because of the occurrence of an event unforeseen at the time of contracting.

A)Commercial impracticability
B)Repudiation
C)Frustration of purpose
D)Impossibility

Question 78

If a contract requires the seller to merely ship the goods,which of the following is false?

A)The seller must put goods into the possession of a carrier.
B)The seller must make a reasonable contract with the carrier to take the goods to the buyer.
C)The seller must notify the buyer that the goods have been shipped.
D)The seller must provide the buyer with pertinent tracking information,if available.

Question 79

Coasters,Inc.notifies Big Box that it does not intend to perform under their contract.Which of the following statements is false?

A)Big Box may suspend its performance.
B)Big Box must wait for performance for a reasonable time.
C)Big Box only needs to await for performance for a reasonable time,if it chooses to wait.
D)Big Box may sue for damages for breach of contract.

Question 80

UCC section 2-301 outlines what basic duty of the seller?

A)To define all contract terms to avoid gap fillers
B)To designate an agent for each buyer
C)To deliver the goods called for by the contract
D)To make a profit on sales