Deck 21: Performance of Sales Contracts

Question 1

In a conflict between the express terms of the contract and trade usage:

A)trade usage prevails.
B)express terms prevail.
C)the contract is invalid.
D)implied terms prevail.

Answer 1

B
Explanation: If there is a conflict between the express terms of the contract and trade usage,the express terms prevail.In many kinds of businesses,there are customs and practices of the trade that are known by people in the business.These customs and practices are usually assumed by parties to a contract for goods of that type.Under the Code,these trade customs and practices can be used in interpreting a contract.

Question 2

A party who has waived rights to a portion of the contract not yet performed may retract the waiver.

Answer 2

True

Question 3

If the goods required for the performance of a contract are destroyed without fault of either party prior to the time the risk of loss passed to the buyer,then the contract is voided.

Answer 3

True

Question 4

Once a party has waived rights to a portion of a contract that has not yet been performed,that party:

A)may not retract the waiver later.
B)may retract the waiver unconditionally.
C)may retract the waiver by giving reasonable notice.
D)may retract the waiver within 24 hours.

Question 5

By accepting goods,the buyer forfeits remedies against the seller for any nonconformities in the goods.

Question 6

The basic duty of the seller is to deliver the goods called for by the contract.

Question 7

Under the UCC,the duties of either the buyer or the seller generally may be delegated to someone else.

Question 8

A contract calls for a farmer to send apples growing at his farm to the fruit market every Monday and he promptly sends them fresh stock of apples every Monday as per the contract.If the fruit market does not pay cash but rather sends a check the following week then:

A)the farmer can object if he may want to rely on the late payment for canceling the contract,but can do this only after six months of the contract period.
B)the farmer cannot object under any circumstances.
C)the farmer must object if he may want to rely on the late payment as grounds for later canceling the contract.
D)the farmer can object only if he has not been paid for the apples he delivered.

Question 9

If there is no agreement between the parties for delivery to happen in installments,then all the goods:

A)should be delivered in "reasonably spaced" intervals.
B)must be delivered to the buyer in a single delivery.
C)may be delivered in installments as the seller dictates.
D)must be delivered as the buyer dictates.

Question 10

If a buyer has a basis for rejecting a delivery of goods,the buyer must act within a reasonable time,but does not need to give the seller notice of rejection.

Question 11

ABC Builders and XYZ Lumber had a contract,calling for XYZ Lumber to deliver a certain quantity of bricks to ABC's place of business on the first of every month for one year.The contract also said that any modifications had to be made in writing.XYZ delivered the bricks one week late for the first six months but ABC did not object.When XYZ delivered the bricks late in the seventh month,ABC attempted to cancel the contract.What is the result?

A)There has been an assignment of the contract.
B)The contract has been modified.
C)XYZ is not in breach because delivery should have been made at XYZ's place of business.
D)ABC has waived its right to cancel the contract.

Question 12

In a COD contract,the buyer may fully inspect the goods before accepting them.

Question 13

When the express terms of a contract and the past course of dealings are in conflict,the express terms will prevail.

Question 14

If the buyer wrongfully rejects goods,he is liable to the seller for breach of the sales contract.

Question 15

A buyer can accept only part of a commercial unit,without accepting the whole unit.

Question 16

Goods may be delivered in installments,even if not stated so in the contract.

Question 17

Under the UCC,only the buyer can demand assurance from the seller that the contract will be performed.If such assurances are not given within 30 days,then the seller is considered to have repudiated the contract.

Question 18

Once made,anticipatory repudiation can never be withdrawn.

Question 19

A buyer has the right to retain goods,even if the bank refuses to pay the buyer's check.

Question 20

If the buyer does not have a place of business,delivery is to be made to the buyer's home.

Question 21

The "right to cure" refers to:

A)the seller's right to reship conforming goods in circumstances where the seller had some reason to believe the buyer would accept nonconforming goods.
B)the seller's opportunity to reship conforming goods only within the time of delivery.
C)the exclusive right,granted by state permit,of certain businesses to reship certain types of items.
D)the seller's right to sell nonconforming goods and not replace,when the past shipments were not objected for substitution.

Question 22

Which of the following is a basic obligation or right of the buyer and seller concerning the payment for goods?

A)The price of the goods must be paid only in money,else the seller can consider the goods to be rejected by the buyer.
B)If there is no agreement for extending credit to the buyer,the buyer must pay for them on delivery.
C)If all or part of the price of goods is payable in real property,then both the transfer of goods and real property are covered by the law of sales of goods.
D)The buyer has the right to inspect the goods before payment under all circumstances. The buyer and seller may agree in their contract that the price of the goods is to be paid in money or in other goods,services,or real property.If all or part of the price of goods is payable in real property,then only the transfer of goods is covered by the law of sales of goods.The transfer of the real property is covered by the law of real property.The buyer can usually inspect the goods before payment except when they are shipped COD.

Question 23

When a buyer has a right to inspect the goods,the right usually must be exercised:

A)before the goods are shipped.
B)after paying for them.
C)before accepting the goods.
D)within 15 days after accepting the goods.

Question 24

Which of the following is true about acceptance of goods by a buyer?

A)He must indicate that he/she will take them.
B)Failure to reject cannot be assumed as an acceptance.
C)He must pay for the goods without inspecting them.
D)He must assume the seller to be the owner of the good.

Question 25

When a payment is tendered by check,the payment is:

A)final.
B)conditional.
C)unenforceable.
D)realized only after the goods are inspected.

Question 26

Under a contract that does not require the seller to deliver the goods to the buyer's place of business but merely to ship the goods to the buyer,the seller:

A)is required to put the goods into the possession of a carrier such as a trucking company or a railroad.
B)is not required to notify the buyer of the shipment,as it is the duty of the carrier to bear for any material delay or loss in the process.
C)is required to deliver the goods personally to the buyer's place of business.
D)is not required to make a contract with the carrier,as the seller's duty ends after he delivers the goods safely to the carrier.

Question 27

When goods are shipped COD:

A)the buyer must pay for them before inspecting them.
B)the buyer must inspect them before paying for them.
C)the buyer may inspect them before paying for them.
D)the buyer may reject the goods immediately after inspection.

Question 28

Which of the following is one of the options of a buyer when the goods delivered do not conform to the contract?

A)The buyer can pay for the units accepted at a price lower to the price per unit provided in the contract.
B)The buyer can accept only part of a commercial unit and reject the rest.
C)The buyer can reject an installment delivery even if the nonconformity can be corrected by the seller.
D)The buyer can accept all of the goods,or accept any commercial unit,and reject the rest.

Question 29

Which of the following implies that the seller must make the goods available to the buyer during reasonable hours and for a reasonable period of time so that the buyer can take possession of the goods?

A)Tender of payment
B)Notification
C)Acceptance
D)Tender of delivery

Question 30

Jay,the owner of a cosmetic store,orders 20 bottles of face cream and 30 bottles of face cleansing cream.After the consignment is delivered,he discovers that he has received 10 bottles of face wash and 10 bottles of face cleansing cream.Jay:

A)can accept and avoid payment for the face cleansing cream.
B)cannot accept nonconforming goods.
C)can reject or accept the entire consignment.
D)can avoid payment for the face wash which he had not ordered but has accepted.

Question 31

Alice purchased a new computer from Compu-Best,a local computer store.She used the computer for a week when the computer began to malfunction.She returned it to the store,where the store manager assured her that he could repair what he called a "minor problem" in the computer.Two months had passed and Alice had already returned the computer five times for repair.Alice finally gave up and demanded her money back.Under these circumstances:

A)Alice is not entitled to revoke her acceptance of the goods because she did not reject the goods when she first discovered the defect.
B)Alice should be entitled to revoke her acceptance because she accepted the goods because of assurances by the seller that the nonconformity would be cured.
C)Alice cannot revoke her acceptance because the value of the computer is impaired by the defect which causes it to malfunction.
D)Alice cannot revoke her acceptance but she is entitled to damages for breach of warranty under the UCC.

Question 32

"COD" stands for:

A)cash on delivery.
B)cargo on date.
C)certificate of deposit.
D)cash on details.

Question 33

To reject goods,the buyer must:

A)notify the seller of the rejection.
B)specify the nonconformity after treating the good as his own.
C)desist from paying the seller in full.
D)never specify the defect to the seller.

Question 34

If a buyer and seller do not agree on where the goods are to be delivered,where would the goods be delivered to?

A)The seller's place of business
B)The seller's house,even if the seller has a place of business
C)The distributor
D)The buyer has to collect it from the seller's place of business

Question 35

Buyer,who owns a grocery store,orders bananas from a fruit wholesaler.The bananas arrive,but they are much too ripe to sell in the grocery.Buyer rejects the bananas and promptly notifies the fruit wholesaler of his rejection.What are Buyer's responsibilities regarding the rejection of the spoilt goods?

A)Buyer must follow any reasonable instructions the seller gives concerning the disposition of the bananas.
B)Buyer must make a reasonable effort to sell them on the seller's behalf,but must not expect a reimbursement from the seller.
C)Buyer need not state any reasons for the rejection to the seller.
D)Buyer must give sufficient notice to the seller and the seller must personally come and collect the goods rejected by the buyer.

Question 36

This occurs when a buyer,after having reasonable opportunity to inspect the goods,either indicates that he will take them or fails to reject them.

A)Tender of delivery
B)Notification
C)Acceptance
D)Reasonable contract

Question 37

A commercial unit is:

A)comprised of any unit of goods,even set of articles that is treated by commercial usage as a single whole.
B)comprised only of single articles treated by commercial usage as a single whole.
C)comprised only of set of articles contained in a commercially recognized measurement (such as a bushel,ton,or truckload).
D)comprised of units of articles which can also be accepted as one single article.

Question 38

Which of the following holds true of revocation of acceptance by the buyer?

A)He/she can revoke acceptance when the nonconformity substantially impairs the value of the goods.
B)He/she cannot revoke if the buyer accepted the goods because of assurances by the seller.
C)He/she can revoke acceptance even after accepting goods with the knowledge of the nonconformity.
D)He/she after revoking acceptance will not have the same rights and duties with regard to goods involved as they had rejected them.

Question 39

The seller has the right to cure:

A)anytime after the buyer accepts delivery but before the buyer repudiates.
B)only once the original time for delivery has expired.
C)even if the buyer accepts nonconforming goods.
D)if he notifies the buyer about the willingness to cure the improper delivery or tender.

Question 40

Farmer Tom entered into a contract with Jerry's Pickle Company wherein Tom agreed to sell Jerry 500 pounds of cucumbers suitable for processing into pickles.The terms of the sale were cash on delivery.When Jerry received the cucumbers,it was obvious to him without inspection that the cucumbers were too large for processing into pickles.Under these circumstances:

A)Jerry may reject the cucumbers,but Jerry must notify Tom of the rejection and follow any reasonable instructions from Tom concerning disposal of the cucumbers.
B)Tom may not reject the cucumbers because the terms of the sale were cash on delivery.
C)Tom must accept the cucumbers and pay for them,but he may be entitled to reduction in the purchase price as damages for breach of contract.
D)even if Tom had some reason to believe Jerry would accept the cucumbers,he cannot cure the breach by reshipping conforming cucumbers to Jerry within a reasonable time.

Question 41

Peds,a wholesale shoe distributor,ordered a quantity of shoes from Ma Industries.When Peds received the shipment,it discovered that all of the shoes were cracked and peeling.Peds contacted Ma and stated that it was rejecting the shipment because the shoes were defective.Peds wanted to ship the shoes back to Ma but received no communication from Ma regarding what was to be done with the shipment.Peds did not pay the remainder owed for the shipment and stopped payment on the check that had been initially issued for the order.Subsequently,Peds had the shoes refinished by another company and distributed and sold the shoes.Ma sued for the value of the shipment.Did Peds accept the shipment of shoes and owe Ma for the goods?

Question 42

Can a buyer reject goods for nonconformity in contracts that call for delivery of the goods in separate installments? If yes,under what circumstances can he reject such goods?

Question 43

The doctrine that permits a party to suspend its performance under a contract when the other party repudiates the contract is known as:

A)anticipatory repudiation.
B)revocation.
C)voidance.
D)breach.

Question 44

When the seller does not give the buyer instructions concerning the disposal of the goods upon rejection and whether the goods are not perishable,the buyer:

A)can resell the goods for the seller,but cannot keep a commission on the sale.
B)cannot reship them to the seller without the seller's instructions.
C)can resell them for the buyer's benefit.
D)can give reasonable time for the seller to reclaim the goods.

Question 45

Spudz,an Iowa corporation,agreed to sell Bob two carloads of potatoes at "$5 per sack,FOB Iowa shipping point." Spudz had the potatoes put aboard the railroad cars; however,it did not have floor racks used in the cars under the potatoes as is customary during winter months.As a result,there was no warm air circulating and the potatoes were frozen while in transit.Spudz claims that its obligations ended with the delivery to the carrier and that the risk of loss was on Bob.What argument would you make for Bob?F.O.B.basis,the seller,in the absence of instructions from the buyer,is responsible for using reasonable care and judgment in making shipping arrangements.The failure to use floor racks was a breach of this duty to use reasonable care in making shipping arrangements.Therefore,the seller is in breach and is liable for the damages sustained.

Question 46

If a buyer becomes concerned that the seller may not be able to perform required contract obligations:

A)he may not assign his contract rights under the contract.
B)he may demand assurance from the other party that the contract will be performed.
C)he may refuse to perform the contract under the doctrine of commercial impracticability.
D)he may be excused from performance under the doctrine of impossibility.

Question 47

What does it mean to require parties to act in "good faith" in the performance of a sales contract? Explain and provide an example.

Question 48

The Code rule that determines when,a person is excused from performing,uses the test of:

A)impossibility.
B)commercial impracticability.
C)proximate causes.
D)concurrent causes.

Question 49

PC Corp.entered into a contract with Easy University to supply the school with 500 PCs for use in its new computer facility.A week before the PCs were to be delivered,Easy University called PC Corp.and said that it would not go through with the purchase.Is PC Corp.obligated to deliver the PCs as required by the contract? Why or why not?

Question 50

Campus Bus Service entered into a contract with Smith Bus Company to purchase 10 buses.One week before Campus Bus was scheduled to receive the buses,a fire destroyed Smith's warehouse and the buses inside.As a result,Campus Bus had to purchase its buses at a higher cost from another manufacturer.If Campus Bus sues Smith Bus for damages for breach of contract under these circumstances,what defense,if any,does Smith Bus have? Assume Campus Bus did not bear the risk of loss of the goods under the contract.

A)Smith Bus should not be excused from performance because it should be ready with contingency plans or options for all unforeseeable events.
B)Smith Bus should not be excused because it did not act in good faith.
C)Smith Bus should be excused from performance under the doctrine of commercial impracticability because the fire was an unforeseen event that made it impossible for Smith to perform its contractual obligations.
D)Smith Bus is guilty of anticipatory repudiation.