Deck 16: Sales and Lease Contracts: Performance, Warranties, and Remedies

Question 1

According to the Uniform Commercial Code,a buyer who has accepted goods may later revoke the acceptance even if the buyer cannot demonstrate that the defects substantially impair the value of the goods.

Answer 1

False
Explanation: Uniform Commercial Code Section 2-608 indicates that a buyer who has accepted goods may later revoke the acceptance only if the buyer can show that the defects substantially impair the value of the goods.

Question 2

Express warranties cannot be created by statements found in advertisements or brochures.

Answer 2

False
Explanation: An express warranty is any description of a good's physical nature or its use,in either general or specific circumstances,that becomes part of the contract.Express warranties may be found in advertisements or brochures.

Question 3

Unless the parties have agreed otherwise,the buyer or lessee typically inspects the goods after paying for them.

Answer 3

False
Explanation: Unless the parties have agreed otherwise,the buyer or lessee typically inspects the goods before paying for them.Under Uniform Commercial Code Sections 2-513(1)and 2A-515(1),the seller or lessor must provide the buyer or lessee an opportunity to inspect the goods before enforcing payment.

Question 4

According to the Uniform Commercial Code,a buyer or lessee may reject an installment of a particular item only if the defects substantially impair the value of the goods and cannot be cured.

Question 5

The perfect tender rule is established by local,municipal,and/or state ordinance.

Question 6

The Uniform Commercial Code defines course of dealing as previous commercial transactions between the same parties.

Question 7

At common law,the obligations and responsibilities of the contractual parties are determined by the express terms of the contract.

Question 8

With regard to implied warranties,implied means that the warranty or guarantee is automatically part of the contract.

Question 9

Common law usually substitutes the perfect tender rule with the doctrine of substantial performance.

Question 10

The Uniform Commercial Code assumes that the seller has valid title to the goods.

Question 11

Courts rely on Uniform Contract Code rules to clarify the obligations of buyers and sellers when the contract they agreed to is unclear.

Question 12

According to the Uniform Commercial Code,if goods are identified at the time the parties enter into a contract and the goods are destroyed through no fault of the parties before risk passes to the buyer or lessee,the parties are excused from performance.

Question 13

The perfect tender rule requires that the seller deliver goods in conformity with the terms of the contract.

Question 14

Conforming goods are goods that conform to contract specifications.

Question 15

The Uniform Commercial Code requires good faith in the performance and enforcement of a contract,but only if the parties expressly include the good faith obligation in their agreement.

Question 16

Under the Uniform Commercial Code,buyers and lessees are obligated to accept and pay for conforming goods in accordance with the contract.

Question 17

As an exception to the perfect tender rule,parties may agree with a level of performance that is less than perfect.

Question 18

There are three basic categories of warranties: conditional warranties,unconditional warranties,and implied warranties.

Question 19

Under Uniform Commercial Code Sections 2-508 and 2A-513,sellers and lessors have the right to fix problems with nonconforming goods.This is known as the right to an accord and satisfaction.

Question 20

Under the Uniform Commercial Code,a delay in delivery is a breach of contract even in circumstances in which performance has been made impracticable because a contingency has occurred that was not contemplated when the parties reached an agreement.

Question 21

An express warranty is a non-material term of a sale or lease contract.

Question 22

The Uniform Commercial Code does not allow buyers and sellers to seek the remedy of specific performance when the goods are unique or a remedy at law is inadequate.

Question 23

In terms of third-party beneficiaries of warranties,most states hold that a seller's warranties extend to anyone injured by the good.

Question 24

Liquidated damages are identified before a breach of contract occurs.

Question 25

The Uniform Commercial Code does not allow a seller to resell or dispose of the goods when the buyer is in breach and the goods have not yet been delivered; instead,the seller must seek an order of specific performance against the breaching buyer.

Question 26

According to the Uniform Commercial Code,in transit means that the seller has delivered the goods to a carrier,and the carrier has turned the goods over to the buyer.

Question 27

The Uniform Commercial Code requires that buyers are obligated to accept and pay for ________ goods in accordance with the contract.

A)substantially conforming
B)select conforming
C)even nonconforming
D)preponderantly conforming
E)conforming

Question 28

What law does the judicial system rely on to clarify the obligations of a seller and a buyer if their agreement is unclear?

A)The United States Constitution
B)Common law
C)The Restatement of Contracts
D)The Uniform Commercial Code
E)Local and municipal ordinances

Question 29

A seller may disclaim the implied warranty of fitness for a particular purpose either orally or in writing.

Question 30

An implied warranty is any description of the good's physical nature or its use,either in general or specific circumstances,that becomes part of the contract.

Question 31

Specific performance usually allows the seller to deliver substitute goods to the buyer.

Question 32

According to the Uniform Commercial Code,a buyer may always revoke acceptance of nonconforming goods.

Question 33

The Uniform Commercial Code allows a seller or lessor to cancel the contract if the buyer or lessee is in breach.

Question 34

In order for an implied warranty of fitness for a particular purpose to be created,the seller must be a merchant.

Question 35

According to the Uniform Commercial Code,in order for a buyer to properly "cover," he or she need not demonstrate good faith in obtaining the substitute goods because the seller initially breached the contract.

Question 36

A dirt bike purchased at a bicycle shop is covered by the implied warranty of merchantability,but a bike that is bought from a neighbor is not,unless the neighbor is a bicycle merchant.

Question 37

If a buyer accepts nonconforming goods,the buyer may not seek damages.

Question 38

According to the Magnuson-Moss Act,if a written warranty is silent regarding whether it is a full or limited warranty,it is presumed to be a limited warranty.

Question 39

The Uniform Commercial Code assumes that the seller has the right to transfer title free and clear of any liens,judgments,or infringement of intellectual property rights of which the buyer does not have knowledge.

Question 40

Which of the following determines the obligations of sellers and buyers?

A)Terms the parties outline in agreements
B)Custom
C)Rules outlined by the Uniform Commercial Code
D)Terms the parties outline in agreements,custom,and rules outlined by the Uniform Commercial Code
E)Terms the parties outline in agreements and custom,but not rules outlined by the Uniform Commercial Code

Question 41

The Uniform Commercial Code requires lessors to ________ goods to lessees.

A)tender materially conforming
B)proffer substantially conforming
C)tender conforming
D)factor in equity
E)proffer in equity

Question 42

Uniform Commercial Code Section 1-205(1)defines ________ as previous commercial transactions between the same parties.

A)trade dress
B)course of dealing
C)commercial equity
D)usage of trade
E)course of performance

Question 43

Which of the following is true regarding a buyer's acceptance of goods?

A)Goods may be accepted in total even if they are nonconforming.
B)The seller may presume acceptance if the buyer fails to reject goods within a reasonable period of time.
C)The buyer may make a partial acceptance of nonconforming goods when the seller has failed to cure defects.
D)Goods may be accepted in total even if they are nonconforming,the seller may presume acceptance if the buyer fails to reject goods within a reasonable period of time,and the buyer may make a partial acceptance of nonconforming goods when the seller has failed to cure defects.
E)Goods may be accepted in total even if they nonconforming,and the seller may presume acceptance if the buyer fails to reject goods within a reasonable period of time; however,the buyer may not make a partial acceptance of nonconforming goods when the seller has failed to cure defects.

Question 44

Under Uniform Commercial Code Section 1-205(2),any practice that members of an industry expect to be part of their dealings is known as ________.

A)trade dress
B)course of dealing
C)commercial equity
D)usage of trade
E)course of performance

Question 45

According to the Uniform Commercial Code,which of the following refers to the history of dealings between the parties in the particular contract at issue?

A)Trade dress
B)Course of dealing
C)Commercial equity
D)Usage of trade
E)Course of performance

Question 46

A buyer may revoke acceptance of goods if the buyer can show that defects in the goods have caused their value to be ________.

A)reduced preponderantly
B)reduced by ten percent or more
C)reduced by twenty-five percent or more
D)substantially impaired
E)compromised

Question 47

If goods are identified at the time the parties entered into a contract and these goods are destroyed through no fault of the parties before risk passes to the buyer,which of the following is true?

A)The parties are excused from performance.
B)The seller has 7 days within which to cure.
C)The seller has 10 days within which to cure.
D)The seller has 30 days within which to cure.
E)The seller has 60 days within which to cure.

Question 48

The term "reasonable commercial standards of fair dealing" is often called ________.

A)commercial equity
B)commercial reasonableness
C)transactional equity
D)good faith
E)capitalism with a conscience

Question 49

According to the Uniform Commercial Code,a delay in delivery or non-delivery,in whole or in part,is not a breach in circumstances in which performance has been made ________ because a contingency has occurred that was not contemplated when the parties reached the agreement.

A)cumbersome
B)unprofitable
C)less profitable
D)impracticable
E)more difficult

Question 50

Under Uniform Commercial Code Sections 2-513(1)and 2A-515(1),the seller or lessor must provide the buyer or lessee _____.

A)the right to revoke nonconforming goods
B)the right to be excused from performance if the goods are destroyed
C)an opportunity for inspection before enforcing payment
D)a reasonable extension of time,at the buyer's request,to accept delivery of non-conforming goods
E)a reasonable opportunity to comply with reasonable commercial standards of fair dealing

Question 51

A common law standard known as ________ requires that the seller deliver goods in conformity with the terms of the contract,right down to the last detail.

A)substantial performance
B)preponderant performance
C)the principle of good faith
D)the principle of good faith and reasonable commercial standards of fair dealing
E)the perfect tender rule

Question 52

What do Uniform Commercial Code Sections 2-601 and 2A-509 indicate regarding the perfect tender rule?

A)If goods or tender of delivery fails in any respect to conform to the contract,the buyer has the right to accept the goods,reject the entire shipment,or accept part and reject part.
B)If goods or tender of delivery fails in any material respect to conform to the contract,the buyer has the right to accept the goods,reject the entire shipment,or accept part and reject part.
C)If goods or tender of delivery fails in any respect to conform to the contract,the buyer has the right to accept all of the goods or reject the entire shipment,but not the right to accept part and reject part.
D)If goods or tender of delivery fails in any material respect to conform to the contract,the buyer has the right to accept all of the goods or reject the entire shipment,but not the right to accept part and reject part.
E)If goods or tender of delivery fails in any respect to conform to the contract,the buyer only has the right to accept the entire shipment and sue for damages.

Question 53

When the parties are merchants,the Uniform Commercial Code requires ________.

A)perfection in customer service
B)equity
C)honesty in fact and reasonable commercial standards of fair dealing
D)equity and reasonable commercial standards of fair dealing
E)honesty in fact and perfection in customer service

Question 54

With respect to non-merchants,how does the Uniform Commercial Code define good faith?

A)Honesty in fact
B)Equity
C)Honesty in fact and reasonable commercial standards of fair dealing
D)Equity and reasonable commercial standards of fair dealing
E)Honesty in fact and equity

Question 55

Uniform Commercial Code Section ________ requires good faith in the performance and enforcement of every contract.

A)1-204
B)2-205
C)3-301
D)3-302
E)1-304

Question 56

Under which sections of the Uniform Commercial Code are buyers and lessees obligated to accept and pay for conforming goods in accordance with the contract?

A)2-301 and 2A-516(1)
B)2-508 and 2A-513
C)2-613 and 2A-221
D)2-612(2)and 2A-510(1)
E)1-205(1)and 2-208(1)

Question 57

Under the Uniform Commercial Code,________ requires that the seller have and hold conforming goods at the disposal of the buyer and give the buyer reasonable notification to enable him or her to take delivery.

A)tender of delivery
B)substantial performance
C)proffer of performance
D)conforming delivery
E)service of process

Question 58

A seller's right to provide conforming goods when nonconforming goods were initially delivered is known as ________.

A)substantial performance
B)usage of trade
C)cure
D)parlay
E)course of dealing

Question 59

What was the result in Alaska Pacific Trading Co.v.Eagon Forest Products Inc.,the case in the textbook in which the defendant rejected a shipment of logs?

A)By not shipping the logs in a timely manner according to the contract,the seller failed to satisfy the perfect tender rule,thereby releasing the defendant buyer from its duty to accept the logs.
B)The seller satisfied the perfect tender rule despite the fact that the logs were late,and the defendant buyer breached the contract by refusing to accept the logs.
C)The seller was entitled to rely on the common law doctrine of material breach,but the seller did not substantially perform,thereby releasing the buyer from its contractual duties.
D)The seller was entitled to rely on the common law doctrine of material breach,the seller substantially performed,and the buyer was in breach of contract.
E)The seller was entitled to rely on the perfect tender rule,and the buyer materially breached the contract by refusing to accept the logs.

Question 60

Which of the following is true if goods are identified at the time the parties entered into a contract and these goods are partially destroyed through no fault of the parties before risk passes to the buyer?

A)The contract is void.
B)The buyer may inspect the goods and decide whether to a)treat the contract as void or b)ask the seller for a reduction of the contract price and then accept the damaged goods.
C)The buyer has three business days to determine whether to void the contract or enforce the seller's obligations under it.
D)Unless the parties can agree on a reduced price,the matter must be submitted to arbitration for a determination regarding an appropriate price.
E)Unless the parties can agree on a reduced price,the contract is voidable at the option of the seller if the seller chooses not to remedy the partial destruction of the goods.

Question 61

Which of the following represent the three basic categories of warranties?

A)Express,implied,and equitable warranties
B)Express,implied,and due-on-sale warranties
C)Warranties of title,equitable warranties,and due-on-sale-warranties
D)Warranties of title,express warranties,and due-on-sale warranties
E)Warranties of title,express warranties,and implied warranties

Question 62

A(n)________ warranty is any description of the good's physical nature or its use,either in general or specific circumstances,that becomes part of the contract.

A)express
B)implied
C)trade usage
D)course of dealing
E)equitable

Question 63

Which option have most states adopted regarding the rights of third-party beneficiaries of warranties?

A)A seller's warranties extend to the buyer's household members and guests.
B)A seller's warranties extend to any reasonable and foreseeable user.
C)A seller's warranties extend to anyone injured by the good.
D)A seller's warranties do not extend beyond the buyer and the buyer's immediate family.
E)A seller's warranties do not extend beyond the buyer and the buyer's immediate family living in the same household.

Question 64

If it is generally accepted in the trade that a certain product is always preassembled and shrink-wrapped,the failure of the seller to deliver the goods in that condition would be a breach of the ________.

A)implied warranty of merchantability
B)implied warranty of fitness for a particular purpose
C)implied warranty of trade usage
D)implied warranty of merchantability,the implied warranty of fitness for a particular purpose,and the implied warranty of trade usage
E)implied warranty of merchantability and the implied warranty of trade usage,but not the implied warranty of fitness for a particular purpose

Question 65

Which of the following is true regarding express warranties?

A)They may be part of a brochure.
B)They may arise from a salesperson's oral promise.
C)A sample or model may provide an express warranty.
D)They may be part of a brochure,they may arise from a salesperson's oral promise,and a sample or model may provide an express warranty.
E)They may be part of a brochure and they may arise from a salesperson's oral promise,but a sample or model may not provide an express warranty.

Question 66

Which is true regarding a buyer's right to waive warranties?

A)A buyer may not waive warranties.
B)A buyer may waive implied warranties,but not express warranties.
C)A buyer may waive express warranties,but not implied warranties.
D)A buyer may waive both implied and express warranties.
E)A buyer may waive express warranties and the implied warranty of fitness for a particular purpose,but not the implied warranty of merchantability.

Question 67

What is the effect of a buyer's failure to comply with the statute of limitations recognized by the Uniform Commercial Code for a breach of contract action?

A)The buyer waives his or her warranty rights under the contract.
B)There is no effect if the buyer can establish that he or she was not aware of the statute of limitations.
C)It operates as a waiver of the buyer's warranty rights,but only if the seller can establish by a preponderance of the evidence that the buyer had actual knowledge of the statute of limitations.
D)It results in the buyer only having the right to sue the seller for injunctive relief,not damages.
E)It results in the buyer only having the right to sue the seller for damages,not injunctive relief.

Question 68

Which of the following is needed in order for the implied warranty of merchantability to be applied?

A)Both parties must be merchants,and a sale must be involved.
B)Both parties must be merchants,and either a sale or lease must be involved.
C)The seller must be a merchant,and a sale must be involved.
D)A seller or lessor must be a merchant,and either a sale or lease must be involved.
E)The seller must be a merchant,goods valued at over $500 must be involved,and either a sale or lease must be involved.

Question 69

Which of the following is needed in order for the implied warranty of fitness for a particular purpose to arise?

A)Both parties must be merchants,and a sale must be involved.
B)Both parties must be merchants,and either a sale or lease must be involved.
C)The seller must be a merchant,and a sale must be involved.
D)The seller or lessor must be a merchant,and either a sale or lease must be involved.
E)A sale or lease must be involved,but the seller or lessor does not have to be a merchant.

Question 70

Which of the following is an accurate statement regarding common law and express warranties?

A)Although the common law does not use the term express warranty,the concept and its application do exist in the common law.
B)The common law specifically incorporates and defines the term express warranty
C)To use common law language,an express warranty is a non-material term of the sale or lease contract.
D)To use common law language,an express warranty is an equitable requirement of any sale or lease contract.
E)To use common law language,an express warranty must be incorporated in a written sale or lease contract in order to be enforceable.

Question 71

Belinda orders a certain type of hybrid rose for her wedding.A disease sweeps through that type of rose and the florist could only obtain the roses at great cost,if at all.Which of the following is the appropriate term for the florist's best defense?

A)Frustration of purpose
B)Commercial impracticability
C)Substantial performance
D)Unforeseen circumstances
E)Substantial impairment

Question 72

The three warranties of quality that arise under the Uniform Commercial Code are the:

A)Warranty of title,express warranty,and implied warranty
B)Warranty of title,express warranty,and implied warranty of merchantability
C)Warranty of title,express warranty,and implied warranty of fitness for a particular purpose.
D)Implied warranty of merchantability,implied warranty of fitness for a particular purpose,and implied warranty of trade usage.
E)Express warranty,implied warranty of merchantability,and implied warranty of fitness for a particular purpose.

Question 73

Which of the following is true regarding the implied warranty of fitness for a particular purpose?

A)It applies in every case in which an express warranty arises.
B)It applies in every case in which an implied warranty of merchantability arises.
C)It applies in every case in which either an express warranty or an implied warranty of merchantability arises.
D)It applies in every sales transaction involving a merchant.
E)It applies when the seller knows why the buyer is purchasing the goods,and that the buyer is relying on him or her to make the selection.

Question 74

In order for goods to be merchantable,the goods must ________.

A)pass without substantial objection in the trade or market for similar goods
B)pass without objection in the trade or market for similar goods; and be fit for the particular purpose(s)for which the buyer intends to use such goods
C)pass without substantial objection in the trade or market for similar goods; be fit for the particular purpose(s)for which the buyer intends to use such goods; and be adequately contained,packaged,and labeled as the agreement may require
D)pass without substantial objection in the trade or market for similar goods; be fit for the particular purpose(s)for which the buyer intends to use such goods; be adequately contained,packaged,and labeled as the agreement may require; and conform to the promises or affirmations made on the container or label (if any)
E)pass without objection in the trade or market for similar goods; be fit for the ordinary purposes for which such goods are used; be adequately contained,packaged,and labeled as the agreement may require; and conform to the promises or affirmations made on the container or label,if any

Question 75

How can a buyer waive warranty rights?

A)By failing to examine goods for which an express warranty was created by a sample or model.
B)By failing to comply with the seller's request to inspect the goods.
C)By failing to examine goods for which an express warranty was created by a sample or model,or by failing to comply with the seller's request to inspect the goods.
D)By failing to require that warranties be given in writing,or by failing to comply with the seller's request to inspect the goods.
E)Pursuant to a Uniform Commercial Code mandate advancing the public policy interests of consumer protection,a buyer cannot waive rights associated with implied and express warranties.

Question 76

Which of the following is an accurate statement regarding state choice(s)in recognizing the rights of third-party beneficiaries of warranties?

A)According to the Uniform Commercial Code,states must recognize that a seller's warranties extend to the buyer's household members and guests only.
B)According to the Uniform Commercial Code,states must recognize that a seller's warranties extend to any reasonable and foreseeable user.
C)According to the Uniform Commercial Code,states must recognize that a seller's warranties extend to anyone injured by the good.
D)States are given the following three choices regarding third-party beneficiaries of warranties: a)a seller's warranties extend to the buyer's household members and guests; b)a seller's warranties extend to any reasonable and foreseeable user; or c)a seller's warranties extend to anyone injured by the good.
E)States are given the following two choices regarding third-party beneficiaries of warranties: a)a seller's warranties extend to the buyer's household members and guests; or b)a seller's warranties extend to any reasonable and foreseeable user.

Question 77

Which of the following is true regarding warranties under common law?

A)For a warranty to exist,it must first be requested by the buyer.
B)Only the implied warranty of assignability arises automatically under common law.
C)Only the implied warranty of merchantability arises automatically under common law.
D)Only warranties of title arise automatically under common law.
E)Express warranties,the implied warranty of assignability,and warranties of title arise automatically under common law.

Question 78

Which of the following types of warranties arises by operation of law under certain circumstances?

A)Express
B)Implied
C)Due-on-sale
D)Express,implied,and due-on-sale
E)Express and implied,but not due-on-sale

Question 79

In terms of sale of goods transactions in the United States,which of the following is true regarding disclaimer of the warranty of merchantability?

A)The disclaimer must be in writing in order to be enforceable.
B)Some states require the term merchantability to be used in the disclaimer.
C)The disclaimer may be made either orally or in writing.
D)The disclaimer must be in writing,and some states require the term merchantability to be used in the disclaimer.
E)The disclaimer may be made either orally or in writing,and some states require the term merchantability to be used in the disclaimer.

Question 80

Which of the following was the result on appeal in Webster v.Blue Ship Tea Room,Inc.,the case in the textbook in which the plaintiff sued after getting a bone caught in her throat while eating New England seafood chowder?

A)The plaintiff could recover based upon the implied warranty of merchantability.
B)The plaintiff could recover based upon the implied warranty of fitness for a particular purpose.
C)The plaintiff could recover based on an express warranty.
D)The plaintiff could not recover,because she waited too long to sue and because she was not the immediate purchaser of the fish.
E)The plaintiff could not recover,because she should have anticipated that fish bones might remain in New England seafood chowder.