Deck 12: Remedies for Breach of Sales and Lease Contracts

Question 1

If a contract does not expressly state where the delivery will take place,the UCC relieves the seller of any obligation to tender goods to the buyer.

Answer 1

False

Question 2

A buyer who agrees to C.O.D.payment terms continues to have the right to inspect goods before paying for them.

Answer 2

False

Question 3

If a seller gives notice to a buyer to return goods sold to him or her,and the buyer refuses the demand,then the seller or lessor may use self-help to reclaim the goods.

Answer 3

False

Question 4

Tender of delivery under the UCC requires the seller to transfer and deliver goods to the buyer in accordance with a sales or lease contract.

Question 5

Unless otherwise agreed or circumstances permit,the seller must deliver all goods named in a contract in a single shipment.

Question 6

When there is an anticipatory repudiation,the aggrieved party will not have a cause of action until the time that performance was due.

Question 7

The right to cure refers to the seller or lessor's right to repair or replace defective or nonconforming goods.

Question 8

If a seller cancels a sales or lease contract with a buyer,the cancellation may refer only to the affected goods.

Question 9

If a seller requires cash as payment,the buyer must be allowed an extension of time to be able to procure the cash.

Question 10

A sales contract requires the seller to deliver 100 shirts to the buyer.Upon inspection the buyer discovers that 99 shirts conform to the contract but one does not.The buyer must return the entire shipment and either ask for a refund or replace the order with the seller.

Question 11

When goods named in a contract are held by a bailee,tender of delivery occurs when the buyer receives the goods from the bailee.

Question 12

If goods are already in transit when a buyer breaches,the seller may stop their delivery.

Question 13

Generally,a buyer may take physical possession of the goods and inspect them within a reasonable time without having accepted the goods.

Question 14

If a seller delivers nonconforming goods under an installment contract,the buyer or lessee may reject any noncomforming installment if the value of the installment is impaired and the defect cannot be cured.

Question 15

A replevin action is available whenever the seller or lessor is wrongfully withholding goods.

Question 16

If a seller "resells" the goods after a breach by the buyer,the resale must be at a public auction.

Question 17

If a buyer purchases similar goods elsewhere after a breach by the seller,this is known as cover.

Question 18

A buyer who rightfully rejects goods must notify the seller of the reasons for rejection to preserve the buyer's rights.

Question 19

If there is an anticipatory repudiation of a contract for the sale of goods,the nonbreaching party may choose whether to await performance or treat the contract as breached at the time of the repudiation.

Question 20

A party requesting assurance of performance from the other party remains obligated to perform its own obligations even if adequate assurance is not received from the other party.

Question 21

When a party retracts an anticipatory repudiation,it means that the party:

A)Performed the contract,but is now taking back that performance.
B)Breached a similar contract in the past,but will perform the current contract.
C)Is breaching the current contract due to circumstances beyond its control,but will be able to perform all similar contracts in the future.
D)Had previously indicated that it would not perform the current contract,but has now indicated that it will perform the current contract.
E)Is demanding that the other party to a contract live up to its obligations.

Question 22

The requirement that goods tendered to a buyer must conform in all ways to the terms of the contract is called the:

A)Complete performance rule.
B)Perfect tender rule.
C)No right to cure rule.
D)Substantial performance rule.

Question 23

If a seller delivers nonconforming goods prior to the date that delivery is due,the seller has the opportunity to make the shipment conform under the:

A)Time to conform rule.
B)Right to make perfect.
C)Reasonable delay doctrine.
D)Right to cure.

Question 24

Which of the following statements is true about acceptance of goods and the revocation of that acceptance?

A)In order to reject nonconforming goods,the nonconformity must be one that substantially impairs the value of the goods to the buyer.
B)An acceptance of goods can be revoked in any circumstance where the goods could have been rejected initially.
C)Goods can be rejected in more circumstances than those where an acceptance of goods can be revoked.
D)If the buyer actually saw and inspected the goods prior to acceptance,the acceptance of those goods cannot be revoked.

Question 25

If a seller has delivered nonconforming goods that have been rejected by the buyer,the seller has a right to cure:

A)Only if the time for performance has not yet expired.
B)Under some circumstances,even if the original time for performance has passed.
C)Only if the contract specifically allows for cure.
D)Only if the buyer agrees.
E)Only if the seller can do so within 10 days.

Question 26

With consumer goods,a limitation of consequential damages for personal injuries is prima facie unconscionable.

Question 27

A destination contract requires that the seller:

A)Deliver the goods to a common carrier.
B)Deliver the goods to the buyer.
C)Give proper and adequate notice to the buyer.
D)A and C.
E)B and C.

Question 28

Which of the following statements is true regarding installment contracts?

A)To be an installment contract,the contract must state that each delivery is a separate contract or words to that effect.
B)The buyer may reject the entire contract for any nonconformity.
C)The buyer may reject the entire contract only if the nonconformity of one shipment affects the value of the entire contract.
D)A,B,and C.
E)A and C only.

Question 29

If a party to a contract anticipatorily repudiates a contract,then:

A)That repudiation may not be retracted.
B)That repudiation may be retracted under any circumstances.
C)That repudiation may be retracted only if the aggrieved party has not changed its position,canceled the contract,or otherwise indicated that the repudiation is final.
D)That repudiation may be retracted only with the consent of the other party.

Question 30

Which of the following must be met in every instance in order to revoke an acceptance of goods?

A)The nonconformity must substantially impair the value of the goods.
B)The seller's promise to cure the nonconformity must not have not been met.
C)The goods must have been accepted before discovery of the nonconformity and the nonconformity must have been one that was difficult to discover.
D)The goods must have been accepted before discovery of the nonconformity and the seller must have assured the buyer that the goods were conforming.

Question 31

Which of the following is true about a buyer's right of inspection?

A)This right must be agreed to in the contract in order for it to apply.
B)This right exists even if not mentioned in the contract,and the seller has the sole right to determine the time and place the right may be exercised.
C)This right exists even if not mentioned in the contract,and the buyer has the sole right to determine the time and place the right may be exercised.
D)If not mentioned in the contract,the buyer has the right to inspect goods in a reasonable time,place,and manner prior to accepting or paying for them.
E)If not mentioned in the contract,the buyer has the right to inspect goods in a reasonable time,place,and manner once the goods have been accepted.

Question 32

The buyer or lessee may obtain specific performance of a sales or lease contract if the goods are unique or the remedy at law is inadequate.

Question 33

The basic obligation of a seller of goods to transfer and deliver goods to the buyer in accordance with the terms of the contract is known as:

A)Performance of delivery.
B)Tender of delivery.
C)Delivery as agreed.
D)Anticipatory delivery.

Question 34

If one party to a contract anticipatorily repudiates the contract,the aggrieved party may:

A)Treat the repudiation as a breach at that time.
B)Await performance for a commercially reasonable time.
C)Suspend his/her own performance.
D)All of the above.

Question 35

The right to cure extends beyond the date that delivery is called for under the contract:

A)Only if the contract allows.
B)In all contracts covered by the UCC.
C)In any situation where it is commercially reasonable that it extend.
D)In any situation where cure by the original delivery date would impose a hardship on the seller.
E)In any situation where the seller reasonably believed that the buyer would accept the nonconforming goods.

Question 36

When the goods identified to a contract are totally destroyed through the fault of neither party before risk of loss passes to the buyer:

A)The contract is void.
B)The seller is obligated to find replacement goods.
C)The contract is voidable by the buyer.
D)The seller is liable to the buyer for damages.

Question 37

Which of the following would constitute a valid acceptance of goods?

A)The buyer tells the seller that the nonconforming goods that were shipped will be kept and paid for.
B)The buyer waits for 3 months before notifying the seller that the goods are nonconforming.
C)The buyer immediately resells the nonconforming goods.
D)A,B,and C.
E)A and C only.

Question 38

Under the UCC,the parties are free to set the statute of limitations applicable to a contract to whatever length of time that they agree to.

Question 39

Common provisions in contracts that modify the perfect tender rule include the following except:

A)Only the defective goods can be rejected.
B)The seller has the opportunity to replace nonconforming goods.
C)The seller has the opportunity to repair defective goods.
D)The buyer can reject any or all goods in a nonconforming shipment.
E)The buyer will accept nonconforming goods with an appropriate price concession from the seller.

Question 40

Assuming that goods are nonconforming and that the nonconformity substantially impairs their value to the buyer,which of the following additional factors must be present for a valid revocation of the acceptance of goods?

A)Nothing else is needed.
B)The goods must have been accepted before the nonconformity was discovered,and the nonconformity must have been difficult to discover.
C)The goods must have been accepted on the reasonable assumption that the seller could and would cure the nonconformity.
D)Both B and C are required to revoke the acceptance of the goods.
E)If either B or C is present,the acceptance of the goods can be revoked.

Question 41

Liquidated damages under the UCC:

A)Are not permissible.
B)Are not permissible anytime both parties have agreed to them.
C)Are permissible only if other remedies are inadequate.
D)Are permissible if reasonable,considering actual damages and the difficulties in computing actual damages.

Question 42

A buyer and seller have contracted for goods that are to be delivered C.O.D.Which is true?

A)The C.O.D.clause is unconscionable unless there were past payment problems.
B)The seller is unable to inspect the goods prior to paying for them,but remains able to reject them if inspection after payment uncovers nonconformities.
C)The seller is unable to reject the goods or to inspect the goods prior to paying for them
D)The payment of the C.O.D.amount is an irrevocable acceptance of the goods.

Question 43

In a contract for the sale of a unique good such as an antique,specific performance would be available as a remedy for which party(ies)?

A)Buyer only.
B)Seller only.
C)Both the seller and the buyer.
D)Neither the seller nor the buyer.

Question 44

On March 15,a buyer received goods under a contract calling for delivery by March 20.The buyer immediately noticed that the goods contained a nonconformity that substantially impaired their value to the buyer.The buyer accepted the goods when received even though they were nonconforming and the seller made no promise to cure the nonconformity.If the buyer wants to revoke its acceptance of these nonconforming goods:

A)It must do so by March 20.
B)It must do so within a reasonable time.
C)It may do so only if the seller fails to cure.
D)It cannot revoke its acceptance in this situation.

Question 45

Which of the following is true about the statute of limitations under the UCC?

A)The statute of limitations is always 4 years.
B)The statute of limitations cannot exceed 4 years.
C)The statute of limitations cannot be less than 2 years.
D)The statute of limitations depends only on the terms of the specific contract.

Question 46

Seller,a television manufacturer,contracts to deliver one hundred 20" color televisions sets with silver cabinets to the buyer on or before December 1 at a stated price.On November 25,seller delivers the sets to the buyer,but all have black cabinets.The buyer rejects these goods.Which of the following best describes this situation?

A)The buyer cannot reject these goods because the nonconformity does not significantly impair the value of the sets.
B)The seller has a right to cure,but only on or before December 1.
C)The seller has a right to cure,and may make a conforming delivery within a reasonable time.
D)The seller may cure,but only if the buyer agrees.
E)This is an anticipatory repudiation.

Question 47

A seller,a manufacturer of videocassette recorders (VCRs),contracts to deliver 100 VCRs to a buyer.The VCRs are delivered at 5 p.m.on a Friday.The buyer unloads the VCRs onto his dock.About 1 month later,the goods are inspected.It is discovered that all the VCRs have a defect,so the buyer notifies the seller of its rejection of the VCRs.The seller claims that the buyer has already accepted the shipment.Which of the following best describes this situation?

A)The unloading of the VCRs onto its dock constitutes an acceptance by the buyer.
B)The rejection was not made within a reasonable time,which constitutes an acceptance.
C)The buyer cannot reject this shipment unless the nonconformity significantly impairs the value of the goods.
D)Keeping the VCRs for over a month was an act inconsistent with the seller's ownership,which constitutes an acceptance.
E)The buyer has the right to inspect,this delay was reasonable,and the buyer may reject this shipment.

Question 48

A computer dealer whose place of business is in Chicago contracts on March 15 to sell 100 personal computers to a CPA firm whose place of business is in Milwaukee.The contract does not mention anything about the time or place of delivery.What are the delivery requirements for this contract?

A)At a reasonable place within a reasonable time from March 15.
B)At a reasonable place on March 15.
C)At the computer dealer within a reasonable time from March 15.
D)At the CPA firm within a reasonable time from March 15.
E)The parties are obligated to reach an agreement for delivery,and its terms will be controlling.

Question 49

A buyer contracts to buy an automobile from a seller (an individual who is not a car dealer)for $1,000.The buyer fails to accept and pay for this car,so the seller sells it to another party for $1,200.This second sale cost the seller an extra $50 in advertising.The seller sues the buyer for damages for breach of contract.In this situation:

A)The seller can collect $250.
B)The seller can collect $200.
C)The seller can collect $50.
D)The seller collects nothing,but keeps the extra amount received.
E)The seller collects nothing,but must give buyer the extra $150.

Question 50

An outdoor clothing store ordered 1,000 pairs of hiking shorts in various sizes and two colors.The color mix was 48 percent khaki and 52 percent olive green.The supplier delivered the proper size mix on the date called for in the contract,but delivered 50 percent khaki and 50 percent olive green.In this circumstance,the buyer can:

A)Not reject any of the shipment because there is substantial performance.
B)Reject only the portion of the shipment that was incorrect.
C)Reject the whole shipment,but only if the buyer covers within a reasonable time.
D)Reject the entire shipment,or part of the shipment.

Question 51

The seller can recover the purchase price for the goods only under certain circumstances,including when:

A)The buyer accepts,but fails to pay for the goods.
B)The goods are destroyed after risk of loss passes to the buyer.
C)The buyer rejects specially manufactured goods that cannot be resold.
D)A,B,and C.
E)A and B only.

Question 52

LMN contracts to deliver 1,000 barrels of lubrication oil to the buyer on or before June 15.On May 15,LMN informs the buyer that it will be unable to deliver the oil as required.The buyer demands that LMN perform the contract,but to no avail.Which of the following best describes the buyer's rights in this situation?

A)The buyer must treat the contract as breached on May 15.
B)The buyer must wait until June 15 to determine if there has been a breach.
C)The buyer may treat the contract as breached on May 15.
D)The buyer may wait until June 15 to see if the seller performs.
E)Either C or D.

Question 53

Which of the following is generally true about provisions in a contract under the UCC that provide specific remedies?

A)These specific remedies are always in addition to those provided by the UCC.
B)These specific remedies are unenforceable because the UCC remedy provisions control.
C)The UCC remedies also apply unless the contract states that the contract remedies are exclusive.
D)The specific contract remedies will be considered to be unconscionable.

Question 54

An oil refiner in the United States contracts on April 1 with a broker to buy crude oil from a specific foreign country with delivery to be made on July 15.On June 15,civil war breaks out in the nation that is the source of the oil,disrupting most exports.The oil refiner immediately writes to the broker demanding assurance of performance,and gets no reply.In this situation:

A)The oil refiner must wait until July 15 before suspending its own performance.
B)The oil refiner can suspend its performance and consider the contract to be repudiated.
C)The oil refiner can suspend its performance before July 15 only if the broker confirms that it will not be able to deliver the crude oil.
D)The oil refiner must cover at this point in order to be able to suspend its performance on the original contract.

Question 55

A ski shop orders 500 pairs of downhill ski boots from a ski equipment manufacturer to be delivered to the ski shop on November 1.Late in the day on November 1,the ski shop receives a delivery.After the shop closes for the day,shop employees notice that the shipment consists of 500 pairs of skis,not ski boots.Which is true regarding the manufacturer's right to cure?

A)The manufacturer has a reasonable time to cure.
B)There is no right to cure because this breach was substantial.
C)There is no right to cure because the time for performance has passed.
D)The manufacturer has a right to cure,but only if the value of the skis received is at least as great as the value of the ski boots that were ordered.

Question 56

Sustainable Earth Clothiers is a retailer who sells only natural fiber clothing made from fibers that are organically raised.Because of the store's heavy advertising that it sells only products made from organically raised fibers,it simply cannot sell any clothing that is not made from such fibers.Sustainable Earth buys 1,000 cotton shirts that are delivered and accepted after an inspection.Three weeks later it is learned that these shirts were made from cotton that was not organically grown.The market value of the shirts is not affected by the fact that the cotton is nonorganic.Assuming that it is difficult to determine by observing the shirts that they were made from nonorganic cotton,which of the following is true?

A)Sustainable Earth must keep the shirts because it accepted them after the inspection.
B)Sustainable Earth must keep the shirts because the market value of the nonconforming shirts is the same as that for conforming shirts.
C)Sustainable Earth will be able to revoke acceptance of the nonconforming shirts.
D)Sustainable Earth will be able to revoke acceptance of the shirts only if it can show that the contract would be unconscionable if it were not allowed to revoke the acceptance.

Question 57

If the seller or lessor tenders nonconforming goods and the buyer or lessee accepts them,what remedies are available to the buyer?

A)Sue for ordinary damages.
B)Deduct damages from the unpaid purchase price.
C)Punitive damages.
D)A only.
E)A and B only.

Question 58

If a seller breaches a contract for the sale of goods and the buyer then acquires similar goods from another supplier,this is known as the right of:

A)Alternate acquisition.
B)Specific performance.
C)Cover.
D)Contract cancellation.

Question 59

Which of the following statements is not true regarding the buyer's right to cover?

A)The buyer must cover.
B)The measure of damages in a cover is cover price less contract price.
C)Cover must be done in a commercially reasonable manner and without undue delay.
D)Consequential damages can be recovered in addition to the cover damages.
E)The seller may not cover.

Question 60

A buyer who has knowingly accepted nonconforming goods with no assurance of cure:

A)Has given up any right to later reject the good for this nonconformity.
B)May nonetheless recover damages resulting from the nonconformity.
C)May recover damages only if the buyer covers.
D)May recover damages only if the buyer can prove lost profits.

Question 61

What is the purpose of giving breaching sellers a right to cure? What is the time limit for a seller to cure? Should that time limit be made longer or shorter? What effect does the perfect tender rule have on your analysis?

Question 62

Does the great increase in the sale of goods over the Internet have any implications for the perfect tender rule?

Question 63

What special consideration should parties to international contracts for the sale of goods give to the availability of remedies? Should such parties limit the kinds of remedies available? What additional risks to breaching parties exist in the exercise by nonbreaching parties of the various remedies available? In other words,what characteristics of international transactions might let a nonbreaching party exploit the situation?

Question 64

Seller,a manufacturer of radios,contracts to deliver 1,000 radios to the buyer.The radios are delivered at the proper time.The buyer inspected the goods as much as she thought necessary.Some of the radios were sold.Later,it was determined that the radios had two defects.First,the coating on the radios had run,making them somewhat unsightly.Second,a few units were improperly manufactured,so they would not play.The buyer attempts to return all the radios.Discuss the rights and duties of both the buyer and seller in this situation.

Question 65

John needs a new car and goes to the local dealer for Worldwide Motors,a global car manufacturer.John negotiates a deal with the local dealer to buy a new midsize model,the Albatross,for $22,000.The dealer cost on this car is $19,000.John then decided against the Albatross and breached the contract.Later the dealer sold this car to another customer for $21,600.The dealer also incurred $200 in costs connected with John's canceled order.Assuming that the dealer can get as many Albatrosses as it wants,how much can it recover in damages from John? Assume that John has not paid anything to the dealer.

A)$400.
B)$600.
C)$3,000.
D)$3,200.
E)$2,600.

Question 66

A seller contracts to sell some rare coins to a collector for $10,000,to be delivered 2 months after the date of the contract.On the date that delivery is due,the coins are worth $12,000,but the seller refuses to deliver.The collector acquires similar coins the following week for $13,000,the best price he can find.What can the collector recover from the seller?

A)Nothing,because she chose to enter into a separate contract for the purchase of coins from another seller.
B)$1,000.
C)$2,000.
D)$3,000.
E)$5,000.

Question 67

Roger contracts with Music Company to buy one of its pianos for $2,000.Music Company has several of these pianos in stock and can buy an unlimited number from the manufacturer.Roger refuses to accept this piano,and Music sells it to another customer for $1,900.If Music sues Roger for breach of contract,the proper measure of Music's damages would be:

A)Contract price less resale price.
B)Contract price less fair market value.
C)Contract price.
D)Lost profits.
E)Music suffered no damage.

Question 68

The store had ordered 100 blankets embossed with "Miata" and received the blankets ordered,but without "Miata" embossed.The plain blankets cost $10 less and sell for $10 less.
Can "Miatas Only" revoke its acceptance of these items?

Question 69

Is the perfect tender rule too harsh? Why should a party be able to reject an entire shipment for a very minor nonconformity? Does this work against one of the main policies of the UCC,namely to encourage the formation and performance of contracts?

Question 70

A food processing plant enters into a contract with a farmers' cooperative for the purchase of several thousand bushels of wheat at $6.50 per bushel to be delivered on November 15.The contract provides that there will be liquidated damages of $10,000 for each bushel of wheat that the cooperative fails to deliver.Which is true?

A)Liquidated damages clauses are always valid if entered into before the actual breach.
B)Because $10,000 is a relatively small amount,this liquidated damages clause is valid.
C)This liquidated damages clause is invalid because it is excessive and because actual damages would be easy to compute if the wheat is not delivered.
D)The liquidated damages clause would be reformed to $6.50 per undelivered bushel.

Question 71

An appliance manufacturer contracts to purchase a quantity of steel from Megasteel Corporation to be delivered to the appliance manufacturer on June 1,2002.On April 1,2002,there is a massive explosion at Megasteel's only steel mill that destroys the mill.According to newspaper reports,the mill will take at least one year to be rebuilt and put back into operation.The appliance company purchasing manager makes a frantic phone call to Megasteel asking,"Is it true you won't be making any more steel for at least a year?" The Megasteel representative says that it is true it will not be able to make any steel for at least a year.The appliance manufacturer immediately contracts with another steel company to deliver similar steel on June 1.A shipment of steel is received from each company on June 1.Has the appliance manufacturer breached its contract with Megasteel if it refuses to accept and pay for the Megasteel steel?

Question 72

John buys some vinyl siding from JKL Construction Company,which installs it on John's house.The siding comes with a 10-year warranty against peeling and chipping.During the fifth year after installation,the siding starts to peel and chip excessively.John sues JKL in the sixth year,but JKL claims that the statute of limitations has run.In these circumstances:

A)JKL wins;the statute of limitations is 4 years.
B)JKL wins;the statute of limitations is 2 years.
C)John wins;the statute of limitations is 6 years.
D)John wins;the statute of limitations does not start to run until the warranty is breached.
E)John wins;the statute of limitations does not start to run until John files a lawsuit.

Question 73

Why are there so many different options available to a nonbreaching party under the UCC in contracts for the sale of goods? Would it be better to limit the number of remedies so that a party contemplating whether or not to breach will be better able to predict the cost and consequences of a breach?

Question 74

Seller contracts to deliver 25 vans to buyer on or before March 1.All the other terms to the contract are fixed.On January 2,the seller informs the buyer that the seller will not be able to deliver the goods as promised.The buyer immediately contracts with someone else for the vans.On February 1,the original seller informs the buyer that the vans will be delivered per the original contract.The buyer refuses to accept these vans,and the original seller sues.Discuss the most likely outcome to the suit,fully developing the legal rights of each party.

Question 75

Peach Motors is a factory-authorized dealer for the manufacturer of the Zebra,a popular luxury sport model that is a leading seller.The Zebra comes with almost every conceivable piece of equipment standard.The only option is an automatic transmission.Thus,the only differences in individual cars are the type of transmission and color of the car.Peach Motors orders 30 Zebras from the factory.The cars ordered are various colors and include some with automatic transmission and some with manual transmission.The factory delivers only five Zebras,all with manual transmission,all in orange,the slowest selling color.Peach had ordered no orange Zebras.Discuss Peach's remedies.

Question 76

Jane,a private individual,has her only piano for sale.Roger contracts to buy it for $500;however,Roger never accepts or pays for it.Jane then sells it to Mark for $550.Jane had no additional costs or expenses.If Jane sues Roger for breach of contract,the proper measure of Jane's damages would be:

A)Contract price less resale price.
B)Contract price less fair market value.
C)Contract price.
D)Lost profits.
E)Jane suffered no damage.

Question 77

Fashion Futures is an upper end retail clothing store that specializes in clothing for aging baby boomers who don't want to admit that they are aging.Fashion futures entered into a contract to purchase 100 pairs of designer pants each month for the 2001 calendar year.The pants were to be delivered by the tenth day of each month.For the January order,Fashion Futures ordered 50 pairs of black pants and 50 pairs of navy blue pants.When delivered,the order contained 60 pairs of black pants,10 pairs of navy blue pants,and 30 pairs of olive green pants.The order was delivered late in the day on January 10.Fashion Futures is upset because the proper goods were not delivered.On January 12,Fashion Futures sent a letter to the supplier saying that it was keeping 20 pairs of the olive green pants and 20 pairs of the black pants,and rejecting all the others,including all the pants for the other 11 shipments.Discuss the legal issues likely to arise when the supplier objects to these actions.Assume that there are no contract provisions addressing any of the legal issues that might arise.

Question 78

A seller hears that one of its customers has filed for bankruptcy.The seller demands in writing assurance of performance by the buyer.If the buyer does give written assurance that it will perform:

A)The written assurance will require that the seller deliver the goods.
B)The seller may withhold delivery of the goods despite the assurance of performance.
C)The seller may withhold delivery only if the insolvency will prevent payment of this debt.
D)The seller must deliver the goods to the custody of the bankruptcy trustee.

Question 79

John needs a new car and goes to the local dealer for Worldwide Motors,a global car manufacturer.John negotiates a deal with the local dealer to buy a new midsize model,the Albatross,for $22,000.The dealer cost on this car is $19,000.John then decided against the Albatross and breached the contract.Later,the dealer sold this car to another customer for $21,600.The dealer also incurred $200 in costs connected with John's canceled order.Assuming that the dealer is allocated only 12 Albatrosses for the year and can get no more,how much can it recover in damages from John? Assume that John has not paid anything to the dealer.

A)$400.
B)$600.
C)$3,000.
D)$3,200.
E)$2,600.

Question 80

Avco Restaurants contracts to purchase $10,000 worth of specially manufactured tablecloths and napkins with its distinctive logo on them.After the seller completes them,Avco wrongfully refuses to accept or pay for these goods.These goods cannot be sold in the open market.If the seller sues Avco,what is the proper measure of damages?

A)Contract price less resale price.
B)Fair market value less contract price.
C)Contract price.
D)Cover price less contract price.
E)Lost profits.