Deck 23: Performance and Obligations Under Sales and Leases

Question 1

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

A) Commercial standards
B) Commercial reasonableness
C) Transactional reasonableness
D) Good faith standards
E) Good faith reasonableness

Answer 1

Commercial reasonableness

Question 2

Which of the following was the result on appeal in Donovan v. RRL Corporation, the case in the text in which the plaintiff attempted to enforce a price for an automobile contained in an ad, and the defendant car dealership claimed that a mistake was involved?

A) The court ruled in favor of the dealership because ads can never constitute offers.
B) The court ruled in favor of the dealership because an intentional misrepresentation is needed before an ad can be considered an offer, and there was no proof of an intentional misrepresentation on the part of the dealership.
C) The court ruled in favor of the dealership on a combination of mistake and unconscionability.
D) The court ruled in favor of the plaintiff because the ad constituted an enforceable offer.
E) The court ruled in favor of the plaintiff on the basis of unilateral mistake and unconscionability.

Answer 2

The court ruled in favor of the dealership on a combination of mistake and unconscionability.

Question 3

What was the result on appeal in the case in the text Alaska Pacific Trading Co. v. Eagon Forest Products Inc. in which the defendant rejected a shipment of logs, and the plaintiff/seller claimed that its late shipment was excused because the contract did not specify that time was of the essence?

A) That 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) That the seller satisfied the perfect tender rule although the logs were late and that the defendant buyer breached the contract by refusing to accept the logs.
C) That the seller was entitled to rely on the common law doctrine of material breach but that the seller did not substantially perform thereby releasing the buyer from contractual duties.
D) That the seller was entitled to rely on the common law doctrine of material breach, that the seller substantially performed, and that the buyer was in breach.
E) That the seller was entitled to rely on the perfect tender rule and that the buyer materially breached the contract by refusing to accept the logs.

Answer 3

That 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.

Question 4

Under the UCC, nondelivery is not a breach of contract 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 5

If goods identified to a contract are destroyed through no fault of the parties before the risk of loss passes to the buyer, the seller must obtain substitute goods.

Question 6

Which of the following are goods that conform to contract specifications?

A) Adequate goods
B) Transforming goods
C) Conforming goods
D) Reasonable goods
E) Superior goods

Question 7

The UCC requires that buyers are obligated to accept and pay for ______ in accordance with the contract.

A) Reasonably conforming goods
B) Select conforming goods
C) Materially conforming goods
D) Significantly conforming goods
E) Conforming goods

Question 8

Good faith in relation to transactions between parties who are not merchants means ____.

A) Honesty in fact
B) Honesty in law
C) Honesty in fact and also reasonable commercial standards of fair dealing
D) Honesty in law and also reasonable commercial standards of fair dealing
E) Honesty in fact and honesty in law

Question 9

A buyer who has accepted goods may later revoke the acceptance if the buyer can show that the defects substantially impair the value of the goods.

Question 10

There are no exceptions to the perfect tender rule.

Question 11

The UCC requires that sellers and lessors tender ______ goods to the buyer or lessee.

A) Adequate
B) Transforming
C) Conforming
D) Reasonable
E) Superior

Question 12

Course of dealing is another term for course of performance.

Question 13

Under the UCC when a buyer alleges that goods failed to conform to contract specifications, the buyer does not automatically have the right to reject the goods.

Question 14

The right to cure refers to the right to fix errors in a contractual agreement, such as typographical errors.

Question 15

Which of the following is true regarding similarities between American and European contract law?

A) U.S. law is provided guidance through statutory enactments known as the Restatements of the Law, but European law relies entirely on the CISG.
B) U.S. law is provided guidance through the UCC, a federal statutory enactment, but European law relies entirely on the CISG.
C) U.S. law finds guidance in the Restatements of the Law constituting soft law, not statutory enactments; and Europe has begun crafting its own version of the U.S. Restatement of Contracts.
D) U.S. law finds guidance in the Restatements of the Law constituting soft law, not statutory enactments, but Europe has disavowed any such similar document choosing instead to rely on the CISG.
E) U.S. law finds guidance in the Restatements of the Law constituting soft law, not statutory enactments; and Europe has disavowed the CISG choosing to follow a code similar to the U.S. Restatements of the Law.

Question 16

Sometimes language in the parties' agreement limits the rigidity of the perfect tender rule.

Question 17

When parties are merchants, UCC requires ______ in addition to honesty in fact.

A) honesty in equity
B) honesty in law
C) reasonable commercial standards of fair dealing
D) honesty in equity and also reasonable commercial standards of fair dealing
E) honesty in equity and honesty in law

Question 18

Conforming goods are goods that conform to UCC specifications.

Question 19

Under the UCC, _____ requires that the seller/lessor have and hold conforming goods at the disposal of the buyer/lessee and give the buyer/lessee reasonable notification to enable him or her to take delivery.

A) Tender of delivery
B) Offer of availability
C) Tender of offer
D) Offer of delivery
E) Offer of notification

Question 20

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

Question 21

Which of the following is defined by the UCC as any practice that members of an industry expect to be part of their dealings?

A) Trade norm
B) Course of dealing
C) Anticipated trade dealing
D) Usage of trade
E) Course of performance

Question 22

Under the UCC which of the following is true 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 or lessee?

A) The parties are excused from performance.
B) The seller has 7 days in which to cure.
C) The seller has 10 days in which to cure.
D) The seller has 30 days in which to cure.
E) The seller has 45 days in which to cure.

Question 23

A buyer who has accepted goods may later revoke the acceptance if the buyer can show that the defects _____ the value of the goods.

A) Reduced in any manner
B) Reduced by 10%
C) Reduced by 5%
D) Substantially impaired
E) Violated the perfect tender rule

Question 24

A common law rule known as the ______ required that the seller deliver goods in conformity with the terms of the contract, down to the last detail.

A) Tender of offer regulation
B) Superior delivery rule
C) Certain tender rule
D) Regulatory rule
E) Perfect tender rule

Question 25

Which of the following is true regarding the UCC and norms in the industry?

A) The UCC requires that courts consider norms in a particular trade only if consumer goods are involved.
B) The UCC allows courts to consider norms in a particular trade only if the perfect tender rule has been satisfied.
C) The UCC requires that courts consider norms in a particular trade.
D) The UCC does not require that courts consider norms in a particular trade.
E) The UCC requires that courts consider norms in a particular trade only if goods with a unit price of over $500 are involved.

Question 26

Under the UCC which of the following refers to the history of dealings between the parties in the particular contract at issue?

A) Trade norm
B) Course of dealing
C) Anticipated trade dealing
D) Usage of trade
E) Course of performance

Question 27

Which of the following states that when a contract for sale involves repeated occasions for performance by either party with the other's knowledge of the nature of the performance and opportunity for objection to it, any course of performance accepted or acquiesced to without objection is relevant to determine what the parties' agreement means?

A) Trade norm
B) Course of dealing
C) Anticipated trade dealing
D) Usage of trade
E) Course of performance

Question 28

Under the UCC 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 or lessee?

A) The contract is void.
B) The buyer may inspect the goods and decide whether to (1) treat the contract as void or (2) ask the seller for a reduction of the contract price and then accept the damaged goods.
C) The seller may inspect the goods and decide whether to (1) treat the contract as void or (2) offer the buyer a reduction of the contract price for the damaged goods.
D) Unless the parties can agree on a price, the matter must be submitted to arbitration for a determination as to an appropriate price.
E) Unless the parties can agree on a price, the contract is voidable at the option of the seller.

Question 29

Which of the following was the result in the "Case Opener" in which Vitol sued Koch Petroleum for delivering oil one day late causing Vitol to sustain a loss based on its sale to another entity?

A) The court ruled that Koch Petroleum had substantially performed and that Vitol could not recover.
B) The court ruled that Koch Petroleum had materially performed and that Vitol could not recover.
C) The court ruled that Koch Petroleum had committed fraud in that the delay was intentional and that Vitol could recover.
D) The court ruled that Koch Petroleum had violated the perfect tender rule and that Vitol could recover.
E) The court ruled that both parties were in the wrong and that damages would be split between the two.

Question 30

Which of the following did the appellate court recognize in SCM Group, U.S.A. Inc., v. Custom Designs & Manufacturing Co. Inc., the case in the text in which the plaintiff sued the defendant after the defendant refused to pay for equipment?

A) That the issue of whether a reasonable time for inspection of goods has passed is generally a question of law for the judge, not the jury, to decide.
B) That an effective acceptance is not made unless the buyer affirmatively notifies the seller in writing that the goods were conforming.
C) That an effective acceptance is not made unless the buyer affirmatively notifies the seller in writing that the goods while not conforming were acceptable with appropriate deductions.
D) That an effective acceptance is not made unless the buyer affirmatively notifies the seller orally or in writing that the goods while not conforming were acceptable with appropriate deductions.
E) That a failure to reject results in liability not only for the contractual price, but also for damages suffered as a result.

Question 31

Under sections of the UCC, sellers and lessors have the right to ______ or fix problems with nonconforming goods.

A) Cure
B) Defend
C) Deduct
D) Reject
E) Renounce

Question 32

In reference to the case in the text DeJesus v Cat Auto Tech. Corp., what was the effect of the defendant's payment for goods without inspection on the day of delivery, when the delivery was approximately two weeks after the time called for by the contract?

A) The defendant effectively waived the performance provisions of the contract regarding the time for delivery.
B) The defendant did not lose any rights because under the UCC he had 24 hours after delivery in which to object to late delivery.
C) The defendant did not lose any rights because under the UCC he had 48 hours after delivery in which to object to late delivery.
D) The defendant did not lose any rights because under the UCC he had 7 days after delivery in which to object to late delivery.
E) The defendant did not lose any rights because under the UCC he had 10 days after delivery in which to object to late delivery.

Question 33

Which of the following is false regarding the perfect tender rule?

A) In relation to the perfect tender rule, sometimes norms for a particular trade do not permit a buyer to reject goods with minor flaws.
B) In relation to the perfect tender rule, the UCC requires that courts consider course of dealing.
C) In relation to the perfect tender rule, the UCC requires that courts consider course of performance.
D) Parties may by contractual language limit the rigidity of the perfect tender rule.
E) The perfect tender rule is satisfied when material elements of a contract are satisfied even if some nonmaterial elements may not be satisfied.

Question 34

The UCC defines _____ as previous commercial transactions between the same parties.

A) Trade norm
B) Course of dealing
C) Anticipated trade dealing
D) Usage of trade
E) Course of performance

Question 35

How does the position of the UCC compare with the common law in regard to the perfect tender rule?

A) The UCC and common law differ with the UCC requiring perfect tender and common law requiring the lesser standard of substantial performance.
B) The UCC and common law differ with the UCC requiring perfect tender and common law requiring the lesser standard of material performance.
C) The UCC and common law differ with the UCC requiring the lesser standard of material performance and common law requiring perfect tender.
D) The UCC and common law differ with the UCC requiring the lesser standard of substantial performance and common law requiring perfect tender.
E) They are the same.

Question 36

Which of the following is true regarding any right of inspection in regard to buyers?

A) The UCC provides for no right of inspection for buyers, and the right of inspection is only available to the buyer if it is provided for by contract.
B) The UCC provides for a right of inspection in regard to perishable items for buyers, but not otherwise.
C) The UCC provides for a right of inspection in regard to fragile items for buyers, but not otherwise.
D) The UCC provides for a right of inspection if the buyer and seller have previously had disputes in regard to shipments, but not otherwise.
E) The UCC provides for a right of inspection for buyers.

Question 37

Under an installment contract when does the UCC provide that a buyer/lessee may reject an installment of a particular item?

A) If the defects substantially impair the value of the goods regardless of whether cure is possible.
B) If the defects cannot be cured even if defects are minor.
C) If the defects devalue the property by more than 10% and if the defects cannot be cured.
D) If the defects devalue the property by more than 20% and if the defects cannot be cured.
E) If the defects substantially impair the value of the goods and if the defects cannot be cured.

Question 38

Which of the following occurs when all the material elements of a contract are satisfied even if some nonmaterial requirements may not be satisfied?

A) Substantial tender
B) Perfect tender
C) Substantial performance
D) Perfect performance
E) Adequate tender

Question 39

Which of the following is true regarding any right of inspection in regard to lessees?

A) The UCC provides for no right of inspection for lessees, and the right of inspection is only available to the lessor if it is provided for by contract.
B) The UCC provides for a right of inspection in regard to perishable items for lessees, but not otherwise.
C) The UCC provides for a right of inspection in regard to fragile items for lessees, but not otherwise.
D) The UCC provides for a right of inspection if the lessor and lessee have previously had disputes in regard to shipments, but not otherwise.
E) The UCC provides for a right of inspection for lessees.

Question 40

What type of notice must a party who wishes to replace noncomforming goods and cure within the time set for performance give the other party?

A) Notice within 1 day of delivery
B) Notice within 5 days of delivery
C) Notice within 10 days of delivery
D) There is no set time so long as notice is given prior to the time set for performance
E) Prompt notice

Question 41

UCC Section _____ requires good faith in the performance and enforcement of every contract.

A) 1-203
B) 2-205
C) 3-301
D) 3-302
E) 1-007

Question 42

What did the court rule in the case of Hubbard v. UTZ Quality Foods Inc., in which the buyer refused on the basis of color to accept potatoes that were the subject of an installment contract?

A) That the failure to meet the proper color standard was not a substantial impairment.
B) That the failure to meet the proper color standard was a substantial impairment but that it did not impair the contract.
C) That the failure to meet the proper color standard amounted to a substantial impairment of the installments substantially impairing the whole contract.
D) That the refusal to accept the potatoes was made in bad faith.
E) That the tendering of the potatoes was made in bad faith.

Question 43

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) Commercial unreasonableness
B) Commercial impracticability
C) Substantial hardship
D) Unforeseen circumstances
E) Unreasonable bride

Question 44

Under the UCC a delay in delivery or nondelivery, 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) Unreasonable
B) Unprofitable
C) Less profitable
D) Impracticable
E) More difficult

Question 45

Whether goods conform to contract terms is a ____.

A) Question of fact
B) Question of law
C) Mixed question of law and fact
D) Question of law unless an installment contract is involved in which case it is a question of fact
E) Question of fact unless an installment contract is involved in which case it is a question of law

Question 46

When may a buyer revoke acceptance if a nonconformity substantially impairs the value of goods?

A) For any reason within 24 hours of acceptance.
B) For any reason within 48 hours of acceptance.
C) For any reason within 7 days of acceptance.
D) For any reason within 30 days of acceptance.
E) Only if the buyer had a legitimate reason for the initial acceptance.

Question 47

"Business Law Rocks." Business law teacher Penny ordered 50 T-shirts for her classes that said "Business Law Rocks" on the front. She wanted to give them out on the last day of class and contracted with Frank, who owned a T-shirt business, for the shirts to arrive by that day. The shirts arrived on Thursday, just before the last day of classes on Friday. Unfortunately, the shirts said "Business Law Yuck" on the front. Frank told Penny that he would remedy and fix the problem and that he had the right to do so. She told him, however, that she had to have the shirts the next day because the students would be gone after that. Penny had also ordered some pamphlets on employment law to be used the next fall semester. The seller had agreed to provide the pamphlets 30 days before spring semester ended. The seller, however, erred and sent pamphlets on environmental law which arrived 28 days before spring semester ended. The seller attempted to remedy the problem by sending the correct pamphlets on employment law, but they did not arrive until 27 days before spring semester ended. None of the parties had any prior dealings

-In claiming that he had the right to fix the problem, Frank was alluding to which of the following under the UCC?

A) The right to cure
B) The right to review
C) The right to perform
D) The right to claim
E) The right to reclaim

Question 48

"Baseball Trophies." To recognize baseball players on his team, Bobby ordered from Bruce 10 trophies showing a baseball player swinging a bat. The trophies were to be delivered on May 1st for an award dinner to be held on May 20th. Bruce was unable to obtain trophies showing a baseball player swinging a bat, but by May 13th, he did locate some trophies with a baseball player holding a bat. The difference did not substantially impair the value of the trophies, and thinking that the trophies would be acceptable, Bruce delivered them on May 14th. Bobby glanced at the trophies, paid for them with a check, and said nothing. On May 16th Bobby looked at the trophies more closely and decided that he did not like them. He canceled payment on Bruce's check, and Bruce sued him for payment.

-What is the most likely effect of Bruce's failure to cure the problem?

A) In order to receive payment, Bruce must provide correct trophies; otherwise, he is not entitled to payment.
B) Bobby's actions effectively prevented Bruce form an opportunity to cure any defects and, therefore, Bobby's actions cannot be said to have effectively rejected the goods resulting in him owing Bruce.
C) Bobby will be required to take a 50% reduction on the price to be paid for the goods.
D) Bobby will be required to take a 30% reduction on the price to be paid for the goods.
E) Bobby will be required to take a 20% reduction on the price to be paid for the goods.

Question 49

"Baseball Trophies." To recognize baseball players on his team, Bobby ordered from Bruce 10 trophies showing a baseball player swinging a bat. The trophies were to be delivered on May 1st for an award dinner to be held on May 20th. Bruce was unable to obtain trophies showing a baseball player swinging a bat, but by May 13th, he did locate some trophies with a baseball player holding a bat. The difference did not substantially impair the value of the trophies, and thinking that the trophies would be acceptable, Bruce delivered them on May 14th. Bobby glanced at the trophies, paid for them with a check, and said nothing. On May 16th Bobby looked at the trophies more closely and decided that he did not like them. He canceled payment on Bruce's check, and Bruce sued him for payment.

-Which of the following is the most likely result if Bruce claims he had reasonable grounds to believe the trophies were acceptable?

A) He would be correct because Bruce's payment by check for the goods upon their delivery provided Bobby with a measure of reliance that they would be acceptable.
B) He would be incorrect because Bruce did not confirm in writing that the trophies were acceptable.
C) He would be incorrect because Bruce did not confirm orally or in writing that the trophies were acceptable.
D) He would be correct because of the special UCC exception for sports-related items.
E) He would be correct because of the special UCC exception for school-related items.

Question 50

"Business Law Rocks." Business law teacher Penny ordered 50 T-shirts for her classes that said "Business Law Rocks" on the front. She wanted to give them out on the last day of class and contracted with Frank, who owned a T-shirt business, for the shirts to arrive by that day. The shirts arrived on Thursday, just before the last day of classes on Friday. Unfortunately, the shirts said "Business Law Yuck" on the front. Frank told Penny that he would remedy and fix the problem and that he had the right to do so. She told him, however, that she had to have the shirts the next day because the students would be gone after that. Penny had also ordered some pamphlets on employment law to be used the next fall semester. The seller had agreed to provide the pamphlets 30 days before spring semester ended. The seller, however, erred and sent pamphlets on environmental law which arrived 28 days before spring semester ended. The seller attempted to remedy the problem by sending the correct pamphlets on employment law, but they did not arrive until 27 days before spring semester ended. None of the parties had any prior dealings

-Is Frank correct in that he has a right to remedy and fix the problem?

A) No, the UCC does not provide a party with the right to fix any problem.
B) No, while the UCC provides a party with the right to fix some problems, the problems with the T-shirts were too serious to afford Frank that right.
C) Yes, but only if he can provide correctly worded T-shirts by the next day, the last day set for performance.
D) Yes, Frank has up to 10 days under the UCC to fix any problem.
E) Yes, Frank has up to 20 days under the UCC to fix any problem.

Question 51

Which of the following governs the inspection process?

A) The seller has an absolute right to dictate the date, time, and method of inspection.
B) The buyer has an absolute right to dictate the date, time, and method of inspection.
C) The seller has an absolute right to dictate the date and time of inspection, but the buyer has the right to dictate the method of inspection.
D) The buyer has an absolute right to dictate the date and time of inspection, but the seller has the right to dictate the method of inspection.
E) The inspection must take place at a reasonable time and place, in a reasonable way.

Question 52

"New Furniture." Penny purchased $3,000 worth of furniture from Good Wood Furniture. Through an arrangement with Good Wood, Penny financed the purchase through a financing company called Let Us Help You. Twenty-nine days after the goods were delivered to her, Penny had a disagreement with Let Us Help You regarding the amount of interest she would be required to pay. She notified Good Wood on that day that she was rejecting the goods. Good Wood claimed that she did not properly reject the furniture and also that she failed to act in good faith, an obligation imposed equally on all parties to a transaction. Penny says that she properly rejected; that, although the UCC imposes no duty of good faith, she acted in good faith; and that, in any event, she had an absolute right to return the goods.

-Which of the following is true regarding Penny's claim that the UCC imposes no obligation of good faith conduct?

A) Penny is correct in this instance because while the UCC generally imposes a duty of good faith, that duty is inapplicable during the initial 30 days after a purchase when a buyer has the right to revoke acceptance for a good or a bad reason.
B) Penny is correct in this instance because while the UCC generally imposes a duty of good faith, that duty is inapplicable in relation to third-party financing.
C) Penny is correct only if she can establish that the goods were overpriced resulting in the right to disregard any obligation of Good Wood.
D) Penny is correct only if she can establish that Good Wood Furniture itself failed to act in good faith.
E) Penny is incorrect.

Question 53

"New Furniture." Penny purchased $3,000 worth of furniture from Good Wood Furniture. Through an arrangement with Good Wood, Penny financed the purchase through a financing company called Let Us Help You. Twenty-nine days after the goods were delivered to her, Penny had a disagreement with Let Us Help You regarding the amount of interest she would be required to pay. She notified Good Wood on that day that she was rejecting the goods. Good Wood claimed that she did not properly reject the furniture and also that she failed to act in good faith, an obligation imposed equally on all parties to a transaction. Penny says that she properly rejected; that, although the UCC imposes no duty of good faith, she acted in good faith; and that, in any event, she had an absolute right to return the goods.

-Which of the following is the correct regarding Good Wood's contention that the duty of good faith is imposed on all parties equally?

A) Good Wood is incorrect because the UCC imposes no duty of good faith.
B) Good Wood is incorrect because the UCC mandated duty of good faith requires honesty in fact in regard to all transactions regardless of the parties involved.
C) Good Wood is incorrect because the UCC mandated duty of good faith imposes a higher duty than honesty of fact in regard to sellers, that of reasonable negotiation considering the position of buyers.
D) Good Wood is incorrect because the UCC mandated duty of good faith imposes a higher duty than honesty of fact in transactions involving amounts in excess of $500, that of reasonable conduct considering all circumstances.
E) Good Wood is incorrect because the UCC mandated duty of good faith imposes a higher duty than honesty in fact on merchants, that of reasonable commercial standards of fair dealing.

Question 54

Which of the following is true regarding the efforts of the seller of the employment law pamphlets to remedy the problem with the incorrect pamphlets?

A) The seller could not exercise the right to cure once the contract time for performance had ended because the seller did not have reasonable grounds to believe that the nonconforming tender of environmental pamphlets would be acceptable to Penny.
B) The seller could likely exercise the right to cure once the contract time for performance had ended because the seller would have had reasonable grounds to believe that Penny would not have objected to the tender of the correct item at the time it was tendered.
C) The seller correctly acted to remedy the problem because he had up to 10 days under the UCC to fix any problem.
D) The seller correctly acted to remedy the problem because he had up to 20 days under the UCC to fix any problem.
E) The seller could not act to remedy the problem because he did not have assurance from Penny in writing that she would allow additional time in which to cure.

Question 55

"Baseball Trophies." To recognize baseball players on his team, Bobby ordered from Bruce 10 trophies showing a baseball player swinging a bat. The trophies were to be delivered on May 1st for an award dinner to be held on May 20th. Bruce was unable to obtain trophies showing a baseball player swinging a bat, but by May 13th, he did locate some trophies with a baseball player holding a bat. The difference did not substantially impair the value of the trophies, and thinking that the trophies would be acceptable, Bruce delivered them on May 14th. Bobby glanced at the trophies, paid for them with a check, and said nothing. On May 16th Bobby looked at the trophies more closely and decided that he did not like them. He canceled payment on Bruce's check, and Bruce sued him for payment.

-Considering only the issue involving the time set for delivery, what is the likely effect of Bobby delivering the trophies after the agreed upon time?

A) Bruce has the right to rely on the failure of Bobby to deliver the trophies in a timely manner and will likely prevail.
B) Bruce's payment for the trophies without inspection and after the time called for by the contract likely waived the performance provisions of the contract regarding the time for delivery.
C) Bruce did not waive the performance provisions of the contract regarding the time for delivery because he paid by check.
D) Bruce did not waive the performance provisions of the contract regarding the time for delivery only because he canceled the check before it was cashed by Bobby.
E) Bruce cannot rely upon the performance provisions of the contract regarding the time for delivery because he did not object within 24 hours of the delivery of the trophies and, therefore, did not meet the UCC 24-hour rule.

Question 56

Which of the following is true under the UCC regarding the right of a seller or lessor to presume acceptance?

A) Sellers and lessors do not have the right to presume acceptance.
B) The seller may presume acceptance if the buyer fails to reject goods within 48 hours, but the lessor may not presume acceptance.
C) The lessor may presume acceptance if the lessee fails to reject goods within 48 hours, but the seller may not presume acceptance.
D) Both lessors and sellers may presume acceptance if buyers or lessees fail to reject good within 48 hours.
E) Both lessors and sellers may presume acceptance if buyers or lessees fail to reject good within a reasonable period of time.

Question 57

Unless the parties agree otherwise, the buyer or lessee typically inspects goods ______ paying.

A) Before
B) Immediately after
C) Within 24 hours after
D) Within 48 hours after
E) Within 7 days after

Question 58

Which of the following is true regarding whether a buyer and lessee may make a partial acceptance?

A) Buyers and lessees may make partial acceptances at any time.
B) The buyer may make a partial acceptance when goods are nonconforming and the seller has failed to cure the defects, but a lessee may not make a partial acceptance.
C) The lessee may make a partial acceptance when goods are nonconforming and the lessor has failed to cure the defects, but a buyer may not make a partial acceptance.
D) The buyer or lessee may make a partial acceptance when goods are nonconforming and the seller or lessor has failed to cure the defects.
E) Neither buyers nor lessees may make partial acceptances because either the whole must be accepted or rejected.

Question 59

"New Furniture." Penny purchased $3,000 worth of furniture from Good Wood Furniture. Through an arrangement with Good Wood, Penny financed the purchase through a financing company called Let Us Help You. Twenty-nine days after the goods were delivered to her, Penny had a disagreement with Let Us Help You regarding the amount of interest she would be required to pay. She notified Good Wood on that day that she was rejecting the goods. Good Wood claimed that she did not properly reject the furniture and also that she failed to act in good faith, an obligation imposed equally on all parties to a transaction. Penny says that she properly rejected; that, although the UCC imposes no duty of good faith, she acted in good faith; and that, in any event, she had an absolute right to return the goods.

-Which of the following is true regarding the claim of Good Wood that Penny failed to properly reject the goods?

A) Good Wood is incorrect because under the UCC Penny had 30 days in which to reject the goods.
B) Good Wood is incorrect only if Penny can establish that Let Us Help You miscalculated the amount of interest she owed.
C) Good Wood is incorrect only if Penny can show that the goods were overpriced.
D) Good Wood is correct only if Good Wood can show that the goods were priced at reasonable market value.
E) Good Wood is correct.

Question 60

Sally contracted with Ben, who operates a farm in Guatemala, for the importation of some great coffee beans for her coffee shop. The contract provided that Ben would be sure the coffee arrived by September 1^st, in time for an open house Sally had planned. Sally was not worried because Ben had always delivered on a timely basis in the past. Ben was busy and was late getting the beans in transit. The beans did not arrive until September 2^nd. Sally shipped them back and refused to pay. Ben sued. What is Sally's best defense?

A) That Ben failed to substantially perform.
B) That Ben failed to materially perform.
C) That Ben violated the perfect tender rule.
D) That Ben's beans were not that good and that she decided to go with another brand.
E) She has no defense because he was only one day late, and she should pay.

Question 61

Should the perfect tender rule be rejected as a matter of law and replaced with the concept of substantial performance?

Question 62

Set forth what the UCC requires in the way of good faith and the duty imposed on both nonmerchants and merchants.

Question 63

Define "course of performance," and discuss its relationship to decisions regarding whether goods conform to contract specifications.

Question 64

What is the Uniform Computer Information Transactions Act; and what is an important way, discussed in the text, by which the act protects software vendors?

Question 65

Sally, who has a candy shop, agreed to sell Ricky, a teacher, all the chocolate candy bears in her shop for treats for his class. Unfortunately, through no fault of hers, Sally's air conditioner went out and the bears partially melted. What are the rights and duties of the parties in relation to the contract?