Deck 20: Performance

Question 1

In most sales, the buyer has the right to inspect the goods before he pays.

Answer 1

True

Question 2

Where goods are in the possession of a bailee and are to be delivered without being moved, in most instances the seller may either tender to the buyer a document of title or obtain an acknowledgment by the bailee of the buyer's right to possess the goods.

Answer 2

True

Question 3

After passage of a week, the buyer of six crates of strawberries will be deemed to have accepted the goods.

Answer 3

True

Question 4

On April 18, Marco bought a sailboat from a local marina. The boat was defective and did not turn about properly. Marco used the boat extensively all summer and the boat was no longer in the same condition as when it was bought. By September 30, Marco had waived his right to revoke acceptance.

Question 5

In the absence of agreement, payment is due at the time and place the buyer is to receive the goods, even though the place of shipment is the place of delivery.

Question 6

Revocation and rejection give the buyer the same rights and duties with respect to the goods.

Question 7

The buyer's rejection of nonconforming goods or tender is rightful under the perfect tender rule.

Question 8

The Code does not excuse performance based upon commercial impracticability.

Question 9

A merchant buyer of goods receives nonconforming goods. The merchant buyer rightfully rejects and appropriately notifies the seller, but the seller has no agent in the buyer's city. The goods are perishable and threaten to decline in value speedily. The merchant buyer has no further duty to the seller other than to await the seller's instructions.

Question 10

Tender can be made any time of the day or night, when it is most convenient for the seller to deliver the goods.

Question 11

Under the CISG, a party may suspend performance of his obligations if, after the conclusion of the contract, it becomes apparent that the other party will not perform a substantial part of his obligations.

Question 12

Rejection is ineffective unless the buyer notifies the seller.

Question 13

If no place of tender is indicated by the contract, delivery is presumed to be made at seller's place of business.

Question 14

A buyer is obliged to accept conforming goods and to pay for them according to the contract terms.

Question 15

The delivery terms "ex-ship" and "no arrival, no sale" indicate that the contract is a shipment contract.

Question 16

A buyer's or lessee's right to reject nonconforming goods depends on the size or extent of the breach of the seller's or lessor's duty to tender conforming goods.

Question 17

In an installment contract, if the contract is silent about payment, the Code provides that the seller may demand the price, if it can be apportioned, for each lot.

Question 18

Whitley ordered 800 Christmas trees from North Pines Tree Farm to be delivered on November 24. When the trees arrive, the North Pines must accept tender of payment by any means or in any manner current, such as a check, in the ordinary course of business unless North Pines demands cash and allows Whitley a reasonable time within which to obtain it..

Question 19

In a sale of goods, the seller's tender of performance does not have to conform to the Code's perfect tender rule.

Question 20

Payment of a C.O.D. shipment constitutes an acceptance of the goods.

Question 21

Ryan is interested in purchasing two dozen L.E.D. signs from Superior Sign Co. If the signs are damaged:

A) and destroyed before Ryan's offer to buy them is accepted, Superior must create new signs to replace the ones Ryan wanted.
B) after the contract of sale is formed and after the risk of loss passed to Ryan, then Ryan has no option but must pay the entire contract price of the signs.
C) without fault of either party before the risk of loss passes to Ryan and the goods were identified when the contract was made, the contract is avoided whether the signs are totally or partially destroyed.
D) All of these.

Question 22

Increased production costs will allow the seller to avoid a contract based upon commercial impracticability.

Question 23

If an anticipatory repudiation substantially impairs the value of the contract, the aggrieved party may:

A) await performance for a commercially reasonable time.
B) resort to any appropriate remedy for breach.
C) Both are correct.
D) None of these.

Question 24

Revocation of acceptance requires notice to the seller, whereas rejection does not.

Question 25

Acceptance of goods, which disallows any later rejection of them, is accomplished only through express words.

Question 26

Revocation of acceptance must be done as soon as the buyer discovers the grounds for the revocation.

Question 27

In the case of partial destruction of identified goods before risk of loss passes to the buyer, the buyer has the option to avoid the contract or to accept the goods with due allowance from the contract price for the deterioration or deficiency.

Question 28

The court in Furlong v. Alpha Chi Omega Sorority held that:

A) the UCC did not apply to this situation.
B) the design specifications were part of the basis of the bargain and as such became an express warranty.
C) rejection of the goods was not rightful even though the sorority seasonably notified the seller within a reasonable time since notice was by phone.
D) the law required the sorority to accept Furlong's offer of compromise.

Question 29

Tender of delivery requires:

A) only that the seller put and hold goods that conform to the contract at the buyer's disposition.
B) that the goods be made available to the buyer for at least one week if they are not perishable.
C) that the seller give the buyer reasonable notice of the tender.
D) that tender occur during the buyer's normal business hours.

Question 30

Which of the following illustrates a shipment contract?

A) Ex-ship.
B) F.O.B. place of shipment.
C) No arrival, no sale.
D) All of these are shipment contracts.

Question 31

A buyer who sells rejected goods on behalf of the seller is entitled to reasonable expenses and a reasonable selling commission not to exceed ten percent of the gross proceeds.

Question 32

The CISG:

A) does not follow the perfect tender rule.
B) provides that the seller must, in all cases, deliver the goods within a reasonable time after the conclusion of the contract.
C) provides that in most instances the buyer must pay the contract price before examining the goods.
D) provides no right of "cure."

Question 33

Revocation of acceptance is effective without notice to the seller.

Question 34

A buyer in Atlanta enters into a sales contract with a seller in Chicago. If the contract does not mention the place for delivery of the goods, the place of delivery will be:

A) at the seller's business or residence in Chicago.
B) as stated in all destination contracts.
C) at the buyer's business or residence in Atlanta.
D) irrelevant since the contract is void.

Question 35

A carpenter ordered 500 sheets of 1/2-inch plywood from her supplier, but received 498 sheets of 1/4-inch plywood. If she rejects these goods, she has no further obligation to her supplier regarding these nonconforming goods.

Question 36

If the goods or the tender of delivery fail in any respect to conform to the contract, the buyer may:

A) reject the whole.
B) accept the whole.
C) accept any unit(s) and reject the rest.
D) Any of these.

Question 37

Which of the following terms would indicate a destination contract?

A) F.O.B. city of buyer.
B) F.O.B. city of seller.
C) C.I.F.
D) F.A.S. seller's port.

Question 38

In their contract for the sale of window shades, Lela Window Treatments, Inc. and Shane agree that Lela will have the right to replace any defective goods that are delivered to Shane. This contractual provision will not have any effect because the perfect tender rule of the UCC will control in a sale of goods transaction.

Question 39

Les contracts to the sell and deliver to Chan 300 rolls of insulation. Unless the parties agree otherwise, Les must tender all 300 rolls in a single delivery, and Chan's payment is due at the time of the tender.

Question 40

A "commercial unit" is a unit of goods that by commercial usage is a single unit and that, if divided, would be materially impaired in character or value.

Question 41

The perfect tender rule requires that the seller's tender of performance must conform exactly to the contract subject to:

A) installment contracts.
B) cure by the seller.
C) Both of these.
D) Neither of these.

Question 42

Sam agrees to sell Bill one 18-cubic-foot, yellow refrigerator for $700. It is to be delivered to Bill's home on July 7. Under the perfect tender rule, which one of the following cases would permit Bill to rightfully reject the goods?

A) Sam delivered an 18-cubic-foot, silver refrigerator on July 7, and Bill calls Sam to complain.
B) Sam sent an 18-cubic-foot, yellow refrigerator with a small dent in it on July 7. Bill refuses delivery but never bothers to call Sam.
C) Sam sent his truck to Bill's home with the 18-cubic-foot, yellow refrigerator on July 7, but Bill was not home.
D) Sam sent 18-cubic-foot, yellow refrigerator without ice cube trays on July 5 and notifies Bill of the defect.

Question 43

Whitaker has reasonable grounds for believing Crosslin will not perform his obligations under their contract. Discuss what Whitaker might do if their contract is governed by: (a) the UCC and (b) the CISG.

Question 44

On June 1, Supertread Tire Company entered into a contract to provide 100 tires per month to ZYX Cycle Company at $30 per tire for the next two years. The October shipment consisted of 100 badly defective tires. ZYX Cycle Company:

A) can treat the whole contract as breached.
B) can reject the October shipment if it cannot be cured in a timely manner by Supertread.
C) cannot reject the October shipment since it is part of the installment series.
D) must pay for the defective tires, but Supertread must provide 200 tires in November.

Question 45

Goods are to be sent from Buffalo, NY to Raleigh, NC by UPS using the delivery terms F.O.B. Buffalo, NY. Where does tender occur?

A) Where the goods are identified.
B) Where the goods are shipped.
C) Where the goods are delivered and picked up by the buyer.
D) Where the goods are taken by the buyer.

Question 46

In which of the following situations does the seller have the right to cure?

A) Where the time for performance under the contract has not yet expired.
B) After the time for performance has expired if the seller had reasonable grounds for believing the buyer would accept a nonconforming tender with or without monetary adjustment.
C) Where the buyer has revoked acceptance.
D) Two of these are correct but not all three.

Question 47

Speedy Stop sells necessities to neighborhood shoppers until 1 a.m. every day. Dairyland delivered its order of milk products as usual around 6 a.m. while Mary, the shopkeeper, was busy with the early coffee and donut crowd. The Dairyland driver left 12 crates in the refrigerator compartment and went on to the rest of his route. At 7:30 a.m., Mary started to shelve the milk products and discovered that all 12 crates contained buttermilk rather than the usual mix of containers of whole milk, 2%, skim milk, and cream she had ordered. What is her obligation with regard to the goods?

Question 48

A manifestation by the buyer of his unwillingness to become the owner of the goods is:

A) cure.
B) revocation.
C) rejection.
D) tender.

Question 49

If Mary allows the seller, Sellmart Co., four weeks to repair the defects in her kitchen set and they have tried but have not done a good job at it, she may revoke her acceptance if she:

A) notifies Sellmart of revocation.
B) does not use the table and chairs.
C) could not discover the defects easily.
D) inspected the goods herself.

Question 50

A buyer's cancellation of a contract based on the seller's anticipatory repudiation is effective:

A) only if the buyer expressly notifies the seller of the cancellation.
B) if the cancellation precedes the seller's attempt to retract her repudiation.
C) only if bond has been obtained.
D) All of these are correct.

Question 51

Vernon is an accountant for a major accounting firm. One day at work, he is discussing his collection of rare coins with one of his co-workers. Vernon tells his co-worker that he keeps his collection at home and that he has recently purchased several Chinese gold Panda coins at an exceptional price. The co-worker expresses an interest in buying two of the coins at a price of $250, and a contract is duly formed. If no place for delivery is expressed, where are the coins to be delivered?

A) At the office of the major accounting firm where the parties to the contract work.
B) At Vernon's home.
C) At the co-worker's home.
D) In the parking lot of the major accounting firm.

Question 52

a. What are the obligations of the seller under a shipment contract?
b. What are the obligations of the seller under a destination contract?

Question 53

J & J Co. offers a "subscription" for baby toys to be delivered every two months from the birth of a child. Payment must be made within two weeks of delivery. The Markham family accepted the J & J plan when their son, Timmy, was born. When Timmy was four months old, one J & J toy arrived smashed to pieces. Markham:

A) can treat the whole contract as breached and refuse to pay for past installments as well as future installments.
B) can reject the installment and cancel the contract immediately.
C) can reject the installment and refuse to pay for it if J & J cannot cure it.
D) cannot reject the installment since it is part of a series.

Question 54

The Elm Street Accounting Partnership has ordered two maroon office chairs for its waiting room from the Quality Office Supply Company. Quality sends two burgundy-red office chairs that the Elm Street partnership rejects. What, if any, rights does Quality have under the circumstances? Explain.

Question 55

Bill orders a custom-made suit from Rooks to be delivered by Friday at 5 p.m. When the suit is delivered to his office on Friday afternoon, he is in conference with a client. He accepts delivery and hangs the suit in his closet. When Bill tries on the suit Saturday evening, he discovers that the pants are cuffed. He had ordered cuffless trousers. What can he do?

A) He cannot revoke acceptance since the cuffs are not difficult to discover.
B) He can revoke acceptance if the cuffs substantially impair the value of the goods to him and Rooks will not remove the cuffs.
C) He can reject the goods since he had not yet accepted them prior to inspection.
D) He cannot reject the goods because the cuffs are curable.

Question 56

The concept of the "right to cooperation" includes that:

A) where one party's required cooperation is not timely, the other party is excused from any resulting delay in her own performance.
B) where one party's required cooperation is untimely, the other party is required to tender performance as if the first party had tendered in a timely manner.
C) where neither party is at fault and the agreed manner of delivery becomes impracticable, both parties are required to negotiate a new price.
D) None of these.

Question 57

Under the __________, a buyer may reject goods for even the slightest defect.

A) revocation of acceptance rule
B) perfect tender rule
C) rules for inspection
D) excuses for nonperformance

Question 58

a. Distinguish between a rejection of goods and a revocation of acceptance of goods.
b. What is the effect of a rejection? What is the effect of a revocation?
c. Does the buyer have any obligations to the seller once she has rejected the goods?

Question 59

When is a buyer deemed to have accepted goods that are delivered pursuant to a contract?

A) If he fails to reject the goods after he has had a reasonable opportunity to inspect them.
B) Immediately upon delivery.
C) Only when he pays for them.
D) Only after an express acceptance.

Question 60

Which of the following is correct with respect to the Code's approach to impossibility of performance?

A) A significant drop in demand for the goods will excuse the buyer's performance.
B) Increased production costs will excuse performance by the seller.
C) Performance will be excused when it is impractical as a result of one or more unforeseen supervening events that are more than mere hardship or increased cost of performance.
D) All of these are correct.

Question 61

Seller, through no fault of its own, is unable to deliver the goods to buyer because the agreed type of carrier is unavailable. Explain what the Code requires.