Question 1

Steel Buildings, Inc., agrees to sell four air compressors to Truck Service Center. Five days later, the buyer refuses delivery and cancels the contract. The seller is entitled to

Accepted Answer

A)  force the buyer to accept the air compressors . 
B)  recover any damages from the buyer but not resell the air compressors . 
C)  resell the air compressors and recover any damages from the buyer. 
D)  resell the air compressors but not recover any damages from the buyer.

Question 2

When a buyer recovers damages for a seller's breach, the correct calculation is the difference between the contract amount and the market value of the goods at the location of the delivery at the time the buyer learned of the breach.

Accepted Answer

A) True 
 B)False

Question 3

The perfect tender rule requires that goods conform exactly to a contract's terms or the buyer is in breach.

Accepted Answer

A) True 
 B)False

Question 4

If one party to a contract has "reasonable grounds" to believe that the other party will not perform as contracted, he or she can demand in writing assurance of performance from the other party.

Accepted Answer

A) True 
 B)False

Question 5

Pavers Inc. contracts to sell some heavy equipment to Earthmovers, Inc. Before either party performs, Pavers, Inc. sees an article in a local paper about a possible Earthmovers bankruptcy. On learning this, Pavers is concerned about its contract with Earthmovers. Pavers should

Accepted Answer

A)  demand assurances of performance from Earthmovers, Inc. 
B)  consider the contract repudiated and sue Earthmovers for breach. 
C)  sell the equipment to a different firm but bill Earthmovers for any lost profit. 
D)  sell the equipment to a different firm and notify Earthmovers that the contract is canceled.

Question 6

Field Farms and Gourmet Restaurant enter into a contract for a sale of lettuce. After Field Farms ships the lettuce but before the restaurant receives it, Gourmet goes out of business and sends notice to Field that it won't be paying for the lettuce. Field

Accepted Answer

A)  can stop the shipment. 
B)  cannot stop the shipment but can sue Gourmet for damages. 
C)  can stop the shipment only if Gourmet pays for half of the shipping price. 
D)  cannot stop the shipment or sue Gourmet for damages until the lettuce is proven to be in good condition on arrival.

Question 7

River Gear Company and Scenic Trips, Inc., enter into a contract on August 1 for the sale of fifty inflatable river rafts. Scenic cancels the contract ten days later. River Gear is unable to sell the rafts to another buyer. River Gear can

Accepted Answer

A)  force the buyer to accept the rafts and pay for them. 
B)  recover the full contract price but must hold the rafts for the buyer. 
C)  recover the full contract price and resell the rafts to a new buyer. 
D)  recover the contract price but must destroy the rafts.

Question 8

The basic obligation of commercial reasonableness underlies every contract under the Uniform Commercial Code.

Accepted Answer

A) True 
 B)False

Question 9

Revocation of acceptance is not allowed if a buyer accepted nonconforming goods based on a reasonable assumption that the seller would cure the defect.

Accepted Answer

A) True 
 B)False

Question 10

Owen and Pablo enter into a contract for a sale of fifty Western saddles. Owen delivers, but Pablo does not pay. Owen can normally recover as damages the difference between

Accepted Answer

A)  any loss avoided and any profit gained. 
B)  the actual price and the hoped-for price based on the location of last signature to the contract . 
C)  the contract price and the market price at the time and place of tender . 
D)  the current prices in the parties' locations as of the date of the breach.

Question 11

In carrier cases, the seller can fulfill the obligation to deliver the goods only through a shipment contract.

Accepted Answer

A) True 
 B)False

Question 12

Open-Air Markets, Inc., rejects a shipment of turkey that does not conform to its contract with Poultry Processing Corporation, but is unable to obtain instructions from the seller. Open-Air Markets can

Accepted Answer

A)  destroy the goods. 
B)  cure the goods to make them conform to the contract. 
C)  retain the goods without paying for them. 
D)  reship or store the goods for the seller.

Exam 19: Performance and Breach

Steel Buildings, Inc., agrees to sell four air compressors to Truck Service Center. Five days later, the buyer refuses delivery and cancels the contract. The seller is entitled to

When a buyer recovers damages for a seller's breach, the correct calculation is the difference between the contract amount and the market value of the goods at the location of the delivery at the time the buyer learned of the breach.

The perfect tender rule requires that goods conform exactly to a contract's terms or the buyer is in breach.

If one party to a contract has "reasonable grounds" to believe that the other party will not perform as contracted, he or she can demand in writing assurance of performance from the other party.

Pavers Inc. contracts to sell some heavy equipment to Earthmovers, Inc. Before either party performs, Pavers, Inc. sees an article in a local paper about a possible Earthmovers bankruptcy. On learning this, Pavers is concerned about its contract with Earthmovers. Pavers should

Field Farms and Gourmet Restaurant enter into a contract for a sale of lettuce. After Field Farms ships the lettuce but before the restaurant receives it, Gourmet goes out of business and sends notice to Field that it won't be paying for the lettuce. Field

River Gear Company and Scenic Trips, Inc., enter into a contract on August 1 for the sale of fifty inflatable river rafts. Scenic cancels the contract ten days later. River Gear is unable to sell the rafts to another buyer. River Gear can

The basic obligation of commercial reasonableness underlies every contract under the Uniform Commercial Code.

Revocation of acceptance is not allowed if a buyer accepted nonconforming goods based on a reasonable assumption that the seller would cure the defect.

Owen and Pablo enter into a contract for a sale of fifty Western saddles. Owen delivers, but Pablo does not pay. Owen can normally recover as damages the difference between

In carrier cases, the seller can fulfill the obligation to deliver the goods only through a shipment contract.

Open-Air Markets, Inc., rejects a shipment of turkey that does not conform to its contract with Poultry Processing Corporation, but is unable to obtain instructions from the seller. Open-Air Markets can