Deck 15: Performance and Cure in Sales Contracts

Question 1

Merchants have the duty to act in a commercially reasonable manner with respect to any sales contract.

Answer 1

True

Question 2

Merchants have the duty to act in a commercially strict manner.

Answer 2

False

Question 3

Usage of trade refers to any general practice or method of performance that is specific to a particular trade or industry used to define expectations of the parties engaged in specific transactions that are common in the industry.

Answer 3

True

Question 4

Course of performance refers to how the parties acted in past contracts instead of the specific contract in question.

Question 5

Absent any specific agreement between the parties to the contrary, the UCC uses a general reasonableness requirement to govern the delivery process.

Question 6

The perfect tender rule states that a seller must tender the goods in a manner that matches the contract terms in every respect.

Question 7

If the seller has delivered goods and the buyer rejects them under the perfect tender rule, the seller has the right to repair or replace the rejected goods so long as the time period for performance has not started.

Question 8

Some UCC rules are different for performance of sales contracts compared with contracts formed under __________ law.

A) private
B) criminal
C) common
D) business

Question 9

The UCC provides the parties with __________ flexibility in how they carry out their obligations.

A) minimum
B) minor
C) material
D) maximum

Question 10

Both industry standards and how the parties have performed in past dealings play an important role in determining the:

A) buyer's obligations and rights
B) seller's obligations and rights
C) parties' obligations and rights
D) None of the choices are correct.

Question 11

Good faith is defined in the UCC as "honesty in __________ in the conduct or transaction concerned."

A) fact
B) law
C) theory
D) dealing

Question 12

__________ have a greater duty to act in a commercially reasonable manner.

A) Shop owners
B) Laypersons
C) Merchants
D) New CEOs

Question 13

In Sons of Thunder v. Borden, the New Jersey Supreme Court held that a buyer breached the duty of good faith by:

A) getting the highest price possible for goods without violating the law.
B) charging a fair price for goods and not taking advantage of others in the industry.
C) willfully trying to circumvent its contractual obligations to a seller that made a significant investment to carry out its obligations.
D) observing industry standards and practices that are generally accepted throughout various industries as proper business practices.

Question 14

Terminology used by the parties in commercial transactions may have more than one meaning that varies from industry to industry or __________.

A) county to county
B) business to business
C) state to state
D) region to region

Question 15

The course of performance is a method to show what the __________ intended through their own actions in performing the specific contract in question.

A) buyers only
B) parties
C) third parties
D) business owners

Question 16

What may be a method to show what the parties intended through their own actions in performing the specific contract in question?

A) course of performance
B) course of dealing
C) usage of trade
D) none of the above

Question 17

Usage of trade means:

A) getting the highest price possible for goods without violating the law.
B) charging a fair price for goods and not taking advantage of others in the industry.
C) observing industry standards and practices that may be unique to the particular industry.
D) observing industry standards and practices that are generally accepted throughout various industries as proper business practices.

Question 18

__________ refers to any general practice or method of performance that is specific to a particular trade or industry

A) Course of dealings
B) Course of performance
C) Usage of trade
D) Usage of dealings

Question 19

Trade usage, course of performance, and course of dealing may be used to supplement the express terms of a contract although not admissible to

A) contradict the implied terms of the contract
B) contradict the express terms of the contract
C) dispute the implied terms of the contract
D) dispute the express terms of the contract

Question 20

__________ is similar to course of performance in that both refer to patterns of performance by the parties.

A) Usage of trade
B) Course of dealing
C) Industry standards
D) None of the choices are correct.

Question 21

In a contract for the sale of goods, the goods must correspond with:

A) The expectations of the third party
B) The description given by a third party
C) That recognized in the trade world wide
D) That understood to be the description from a course of dealings with the seller

Question 22

If a contract for the sale of goods is analyzed based on the parties' course of dealing, the goods must be

A) Of a satisfactory size and shape
B) Satisfactory to the buyer currently
C) Satisfactory to all involved in its sale
D) Of the same quality as found in past contracts

Question 23

Conforming goods simply means the goods __________ in an agreement.

A) at the highest price
B) for free
C) bargained for
D) at the lowest price

Question 24

Under the doctrine referred to as __________, the UCC obligates the seller to have or tender the goods, give the buyer appropriate notice of the tender, and take any actions necessary to allow the buyer to take delivery.

A) tender of notice
B) tender of shipment
C) tender of delivery
D) All of the choices are correct.

Question 25

Under the perfect tender rule:

A) the goods must be somewhat conforming.
B) the goods must be presented to the parties.
C) the goods must match the contract terms in every respect.
D) the goods must match the contract terms at least in part.

Question 26

If the seller fails to achieve perfect tender, the buyer may:

A) reject entire shipment
B) accept entire shipment
C) accept any number of units and reject the remainder of a shipment
D) All of the choices are correct.

Question 27

In Furlong v. Alpha Chi Omega Sorority et al, 73 Ohio Misc.2d 26 (1993), Furlong (the seller).

A) breached the implied warranty and the contract by delivering semi-conforming goods.
B) breached the implied warranty and the contract by delivering nonconforming goods.
C) breached the express warranty and the contract by delivering nonconforming goods.
D) breached the express warranty and the contract by delivering semi-conforming goods.

Question 28

If the seller has delivered goods and the buyer rejects them under the perfect tender rule, the seller has the right to repair or replace the rejected goods so long as:

A) the goods were conforming.
B) the time period for performance has not expired.
C) the parties had a prior understanding.
D) None of the choices are correct.

Question 29

Once the time contemplated for performance has expired, the seller's right to __________ also expires.

A) repair
B) fix
C) cure
D) resend

Question 30

If the time for the seller's performance has not expired, the seller may cure by:

A) giving notice of her intent to cure
B) tendering conforming goods in replacement of the rejected goods
C) communicating with the buyer
D) All of the choices are correct.

Question 31

The right to cure may exist __________ the time period for performance has come due.

A) before
B) when
C) after
D) None of the choices are correct.

Question 32

The UCC provides that if the seller reasonably believes that the nonconforming goods will be acceptable to the buyer __________ a money allowance, then the seller gets additional time to cure after the time under the contract has passed.

A) in lieu of
B) with or without
C) absent
D) in addition to

Question 33

Jackie, an orange supplier, contracted with Jimmy's Sushi for the delivery of 50 crates of grade B oranges. Every three months, Jackie regularly sends Jimmy's Sushi 50 crates of grade B oranges. Due to an oversight, Jackie sent Jimmy's Sushi 50 crates of grade A oranges. In this case,

A) Jimmy's Sushi may reject the goods
B) Jimmy's Sushi must reject the goods
C) Jimmy's Sushi may accept the goods
D) Jimmy's Sushi must accept the goods

Question 34

In Car Transportation Brokerage Company v. Blue Bird Body Co., the court held in favor of:

A) the buyer
B) the seller
C) the buyer and the seller
D) the third party vendor

Question 35

The UCC applies the commercial impracticability rule when the delivery or nondelivery of goods has been made impracticable by the occurrence of __________ and said event directly affects a basic assumption of the contract.

A) an anticipated event
B) an unanticipated event
C) a foreseeable event
D) an unforeseeable event

Question 36

Commercial impracticability is a __________ doctrine.

A) good faith
B) remedial
C) open ended
D) narrow

Question 37

The buyer's primary obligation is triggered when the seller __________ delivery.

A) begins
B) initiates
C) tenders
D) contemplates

Question 38

Once the buyer has accepted the goods, the buyer must __________ for them in accordance with the contract.

A) pay
B) negotiate
C) All of the choices are correct.
D) None of the choices are correct.

Question 39

If the seller has shipped conforming goods as agreed, the buyer has the duty to accept them and become the owner of the goods in accordance with concepts of __________.

A) execution
B) discharge
C) possession
D) title

Question 40

FoodCo and SupplyCo contracted for FoodCo to purchase a particular amount of silverware per month. SupplyCo purchased specialty silverware from Spain to fulfill the contract and took out a significant loan to finance the purchase. Soon thereafter, FoodCo changed management and concluded that the contract was not profitable. As a result, FoodCo began to buy only 25% of its silverware from SupplyCo, which significantly reduced the revenue produced by SupplyCo and the Spanish silverware maker. If SupplyCo sues for breach of contract, what would a judge or jury likely do? Why?

Question 41

Jenny contracted with Joey's Doughnuts to cater dessert for her wedding. Jenny wanted a "doughnut wall" full of a variety of her favorite doughnuts for her guests. Of the 40 high quality doughnuts Joey's baked, Jenny wanted a variety of 5 doughnuts. Upon delivery of the doughnuts, Jenny was shocked to find that only 4 of the 5 varieties were baked and on display. The 5^th type of doughnut was mistakenly sold to another customer the day of the wedding. Two of the five doughnuts were her childhood favorites. Although Jenny was happy with the 4, she sued for breach of contract over the 5^th missing doughnut variety. Does Jenny have a viable suit? Why or why not?

Question 42

Jenny contracted with Joey's Doughnuts to cater dessert for her wedding. Jenny wanted a "doughnut wall" full of a variety of her favorite doughnuts for her guests. Of the 40 high quality doughnuts Joey's baked, Jenny wanted a variety of 5 doughnuts. Upon delivery of the doughnuts, Jenny was shocked to find that only 4 of the 5 varieties were baked and on display. The 5^th type of doughnut was mistakenly sold to another customer the day of the wedding. Two of the five doughnuts were her childhood favorites. Although Jenny was happy with the 4, she sued for breach of contract over the 5^th missing doughnut variety. Does Joey's have a viable defense? Why or why not?

Question 43

Aubrey's Apples agrees to purchase 1,000 Grade-B apples from SupplyCo for $10 per bushel to be delivered by October 1. On September 30, FarmCo realizes it has only 800 Grade-B apples. FarmCo gives Aubrey's Apples seasonable notice and ships 800 Grade-B and 200 Grade-A apples as substitute goods. Grade-A apples are worth 20 percent more than Grade-B apples. Aubrey's Apples rejects the Grade-A apples on October 1 and sues. Who prevails? Why?