Question 1

Under the UCC, if a contract does not designate the place of delivery for the goods, the place of delivery is a location halfway between the seller's place of business and the buyer's place of business.

Accepted Answer

A) True 
 B)False

Question 2

The term cure refers to the right of the buyer to reject, adjust, or replace nonconforming goods.

Accepted Answer

A) True 
 B)False

Question 3

Precious Stones, Inc., and Sparkling Jewelry stores enter into a contract for a sale of gemstones. Precious Stones does not deliver. The buyer 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. 
C)  ​the contract price and the market price. 
D)  ​the current prices in the parties' locations.

Question 4

Fact Pattern 22-1​
Daily Bread Bakeries, Inc., contracts to buy all of its ingredient requirements for bread making, at a certain minimum per year, from Enriched Flour & Grain Corporation for six years. After three years, Daily Bread tells Enriched that it plans to sell its assets to Flat Bread Shops, Inc. Flat Bread refuses to assure Enriched that it will continue Daily Bread's contract.
-Refer to Fact Pattern 22-1. Enriched can​

Accepted Answer

A)  ​assign its rights under the contract but cannot terminate it. 
B)  ​terminate the contract and seek damages. 
C)  ​suspend performance under the contract until Enriched is fully paid. 
D)  ​do nothing.

Question 5

Okay 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. Okay 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.

Question 6

Field Farms and Gourmet Restaurant enter into a contract for a sale of produce. After Field Farms ships the lettuce but before the restaurant receives it, the buyer declares bankruptcy. The seller can stop delivery of the goods in transit

Accepted Answer

A)  ​only if the quantity is at least 50 percent of the contract amount. 
B)  ​only if the quantity is in a single "unit." 
C)  ​only if the quantity is at least a truckload. 
D)  ​regardless of the quantity.

Question 7

With an installment contract, a buyer or lessee can reject a single installment on any pretext.

Accepted Answer

A) True 
 B)False

Question 8

Pine Mills Inc. and Quality Lumber Company enter into a contract for a sale of plywood to be delivered under a destination contract. This contract requires Pine Mills, the seller, to

Accepted Answer

A)  ​allow the buyer to reject the goods for any reason. 
B)  ​deliver the goods to a particular destination. 
C)  ​inspect the goods before tendering their delivery. 
D)  ​place the goods into the hands of a carrier.

Question 9

Elegant Carpets, Inc., and Fantastic Floors Stores enter into a contract for a sale of carpeting to be delivered under a shipment contract. This contract requires Elegant Carpets, the seller, to

Accepted Answer

A)  ​allow the buyer to reject the goods for any reason. 
B)  ​deliver the goods to a particular destination. 
C)  ​inspect the goods before shipping them. 
D)  place the goods into the hands of a carrier.​

Question 10

The doctrine of commercial impracticability only extends to problems that are unforeseen.​

Accepted Answer

A) True 
 B)False

Question 11

Bayou Boats, Inc., contracts for the sale of seven swamp boats to Eventide Fishing Tours. Bayou repudiates the contract. Eventide's recovery is measured at the time

Accepted Answer

A)  ​Bayou advertised the goods. 
B)  ​Eventide ordered the goods. 
C)  ​Eventide learned of the breach. 
D)  ​Bayou knew that it would repudiate the contract.

Question 12

Tarts & Pies Bakery contracts with Sweet Fruits for strawberries to be delivered by Refrigerated Trucking Company. On the day of delivery, the refrigeration on the trucks is not working. Sweet Fruits

Accepted Answer

A)  ​may ship the strawberries to the buyer using a different carrier. 
B)  ​must cancel the contract. 
C)  ​must wait to ship the strawberries until the carrier fixes its trucks. 
D)  ​must ship the goods through a different carrier and pay damages.

Question 13

If goods identified to a contract are destroyed through no fault of either party, both parties are excused from performance.

Accepted Answer

A) True 
 B)False

Question 14

The seller's or lessor's major obligation under a sales contract is to tender conforming goods to the buyer or lessee.

Accepted Answer

A) True 
 B)False

Question 15

Unless the parties agree otherwise, the buyer or lessee has an absolute right to inspect the goods before making payment.

Accepted Answer

A) True 
 B)False

Question 16

If, before the time for performance, a buyer communicates an intent not to perform, the seller can consider the buyer in breach and pursue a remedy.​

Accepted Answer

A) True 
 B)False

Question 17

If a buyer repudiates a contract, the seller can bring an action to recover damages.​

Accepted Answer

A) True 
 B)False

Question 18

H2O Company contracts to sell pumps, tanks, and water storage systems to In-Flo Irrigation, Inc. Before the goods are delivered, In-Flo indicates that it will not be able to pay. H2O can

Accepted Answer

A)  ​force the buyer to accept and pay for the goods. 
B)  ​require the buyer to find a buyer for the goods. 
C)  ​resell the goods and recover any damages from the buyer. 
D)  ​do nothing.

Question 19

If goods in every respect conform to a contract, the buyer or lessee does not have a right to reject the goods.

Accepted Answer

A) True 
 B)False

Question 20

Fuel Connector Products, Inc., agrees to sell Go-Flo, Inc., a certain quantity of hose couplings and fittings, but the contract does not specify a place of delivery. Go-Flo is expected to pick up the goods. The place of delivery is

Accepted Answer

A)  ​Fuel Connector's place of business. 
B)  ​Go-Flo's place of business. 
C)  ​the current location of the hose couplings and fittings. 
D)  ​the U.S. Postal Service office nearest to Go-Flo's place of business.

Exam 22: Performance and Breach of Sales and Lease Contracts

Under the UCC, if a contract does not designate the place of delivery for the goods, the place of delivery is a location halfway between the seller's place of business and the buyer's place of business.

The term cure refers to the right of the buyer to reject, adjust, or replace nonconforming goods.

Precious Stones, Inc., and Sparkling Jewelry stores enter into a contract for a sale of gemstones. Precious Stones does not deliver. The buyer can normally recover as damages the difference between

Okay 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. Okay Markets can

Field Farms and Gourmet Restaurant enter into a contract for a sale of produce. After Field Farms ships the lettuce but before the restaurant receives it, the buyer declares bankruptcy. The seller can stop delivery of the goods in transit

With an installment contract, a buyer or lessee can reject a single installment on any pretext.

Pine Mills Inc. and Quality Lumber Company enter into a contract for a sale of plywood to be delivered under a destination contract. This contract requires Pine Mills, the seller, to

Elegant Carpets, Inc., and Fantastic Floors Stores enter into a contract for a sale of carpeting to be delivered under a shipment contract. This contract requires Elegant Carpets, the seller, to

The doctrine of commercial impracticability only extends to problems that are unforeseen.​

Bayou Boats, Inc., contracts for the sale of seven swamp boats to Eventide Fishing Tours. Bayou repudiates the contract. Eventide's recovery is measured at the time

Tarts & Pies Bakery contracts with Sweet Fruits for strawberries to be delivered by Refrigerated Trucking Company. On the day of delivery, the refrigeration on the trucks is not working. Sweet Fruits

If goods identified to a contract are destroyed through no fault of either party, both parties are excused from performance.

The seller's or lessor's major obligation under a sales contract is to tender conforming goods to the buyer or lessee.

Unless the parties agree otherwise, the buyer or lessee has an absolute right to inspect the goods before making payment.

If, before the time for performance, a buyer communicates an intent not to perform, the seller can consider the buyer in breach and pursue a remedy.​

If a buyer repudiates a contract, the seller can bring an action to recover damages.​

H2O Company contracts to sell pumps, tanks, and water storage systems to In-Flo Irrigation, Inc. Before the goods are delivered, In-Flo indicates that it will not be able to pay. H2O can

If goods in every respect conform to a contract, the buyer or lessee does not have a right to reject the goods.

Fuel Connector Products, Inc., agrees to sell Go-Flo, Inc., a certain quantity of hose couplings and fittings, but the contract does not specify a place of delivery. Go-Flo is expected to pick up the goods. The place of delivery is

The doctrine of commercial impracticability only extends to problems that are unforeseen.

If, before the time for performance, a buyer communicates an intent not to perform, the seller can consider the buyer in breach and pursue a remedy.

If a buyer repudiates a contract, the seller can bring an action to recover damages.