Deck 14: Performance Breach of Sales Lease Contracts

Question 1

In contracts involving a carrier,a seller can complete performance only through a shipment contract.

Answer 1

False

Question 2

Under the UCC,a seller's tender of goods that do not conform in every way to a contract is not a valid tender.

Answer 2

True

Question 3

An installment contract is breached if a buyer accepts any nonconforming goods.

Answer 3

False

Question 4

If goods fail to conform to a contract in any way,the buyer or lessee must reject them.

Question 5

A buyer has no right to accept goods that fail in any respect to conform to the terms of a contract in every detail.

Question 6

A lessee's breach of a contract will usually give the lessor the right to cancel the contract.

Question 7

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

Question 8

If a contract specifies a certain carrier,a substitution of a different carrier for any reason breaches the contract.

Question 9

If a nonconforming installment substantially impairs the value of a whole contract,the buyer can treat the entire contract as having been breached.

Question 10

Tender must occur at a reasonable hour and in a reasonable manner.

Question 11

In contracts involving a carrier,a seller can complete performance only through a destination contract.

Question 12

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.

Question 13

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

Question 14

Until the time for performance under a contract expires,the seller has a right to cure.

Question 15

A seller can terminate a contract on the basis of commercial impracticability if increases in the seller's costs threaten to undercut its profits.

Question 16

Unless the parties agree otherwise,the buyer must make payment at the time and place that the goods are received.

Question 17

In general,a buyer's duty to pay for tendered goods becomes absolute before the buyer has had an opportunity to inspect the goods.

Question 18

An installment contract is breached if a seller tenders any nonconforming goods.

Question 19

Under a destination contract,a seller must deliver the goods via a carrier.

Question 20

The doctrine of commercial impracticability only extends to problems that could have been foreseen.

Question 21

If the parties to a sales contract state that a certain remedy is exclusive,then it is the sole remedy.

Question 22

An unpaid seller can bring an action to recover the purchase price,on the buyer's breach of a contract,only if the goods are first disposed of.

Question 23

Elegant Carpets,Inc. ,and Fantastic Floors Stores enter into a contract for a sale of carpeting.Under a shipment contract,the seller must

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 24

If a buyer repudiates a contract,the seller cannot recover damages.

Question 25

A buyer who rightfully rejects nonconforming goods can resell the goods and keep the proceeds.

Question 26

A buyer who obtains substitute goods to replace goods that a seller did not deliver can also recover damages from the seller.

Question 27

On a lessee's insolvency,the lessor can stop delivery of the goods.

Question 28

If a buyer wrongfully refuses to accept goods that conform to a contract,the seller may recover damages.

Question 29

If a buyer breaches a contract while the seller is still in possession of the goods,the seller can resell the goods and hold the buyer liable for any loss.

Question 30

A buyer may reject a seller's goods under any circumstances.

Question 31

If a lessee wrongfully refuses to accept goods that conform to a contract,the lessor must tender substitute goods.

Question 32

If a buyer wrongfully refuses to accept goods that conform to a contract,the seller can maintain an action to recover the damages sustained.

Question 33

International Gem Corporation agrees to sell Jewel Outlets,Inc.(JOI),fifty new diamonds,but the contract does not specify a place of delivery.JOI is expected to pick up the goods.The place of delivery is

A)International's place of business.
B)JOI's place of business.
C)the Annual Gems and Jewels Convention.
D)the U.S.Postal Service office nearest to JOI's place of business.

Question 34

Clear Day Company,which is based in Delaware,agrees to sell fifty windows,currently stored in Florida,to Great Vu,Inc. ,which is based in Hawaii.Absent an agreement to the contrary,the place of delivery is in

A)California.
B)Delaware.
C)Florida.
D)Hawaii.

Question 35

If a buyer breaches a contract and the seller resells the goods to another party,the seller cannot recover any loss from the breaching buyer.

Question 36

A buyer's breach of a contract will not usually give the seller the right to cancel the contract.

Question 37

If a lessor's tender of delivery fails to conform to a contract in any way,the lessee can reject the goods.

Question 38

Screen Perfect,Inc. ,and TV Stores enter into a contract for a sale of high-definition television sets.Screen Perfect ships goods that do not exactly conform to the contract in some details.TV Stores

A)cannot reject the entire shipment.
B)can reject the entire shipment.
C)must accept the entire shipment.
D)must reject the entire shipment.

Question 39

A buyer who accepts nonconforming goods cannot revoke the acceptance.

Question 40

Business Rental Corporation (BRC)and Cartage Trucking Company enter into a contract for a lease of ten hydraulic lifts.Under the perfect tender rule,BRC must ship or tender goods to the lessee that

A)approximately conform to all of the details of the contract.
B)entirely conform to the contract except in one or two details.
C)exactly conform to the contract in every detail.
D)substantially conform to the contract in most details.

Question 41

Summit Supply Company contracts for a sale of medical equipment to Valley Immediate Care Corporation.Summit can enforce its right to payment

A)only after Valley has actually inspected the goods.
B)only after Valley has had an opportunity to inspect the goods.
C)only before Valley has inspected the goods.
D)whether or not Valley has had the chance to inspect the goods.

Question 42

Food Packaging,Inc. ,agrees to sell 50,000 6-ounce yogurt containers to Golden Dairy Company.Food can obtain only 20,000 of the 6-ounce containers,but also ships 30,000 more expensive 8-ounce containers for the same price.Under these circumstances,Golden

A)cannot reject delivery,and Food cannot later replace the containers.
B)cannot reject delivery,but Food can later replace the containers.
C)may reject delivery,and notice to Golden of Food's intent to cure will give Food a reasonable time to replace the containers.
D)may reject delivery,but Food cannot later replace the containers.

Question 43

Ramblin' Country Stables contracts to buy 1,000 horseshoes from Blacksmith,Inc. ,for $1 per shoe.When the market price decreases to 50 cents per shoe,Ramblin' refuses to go through with the deal.Blacksmith can recover

A)$1,500.
B)$1,000.
C)$500.
D)$0.

Question 44

According to the court in Case 14.1,Maple Farms,Inc.v.City School District of Elmira,the defense of commercial impracticability will not excuse the performance of a contractual obligation when there is an increase in the seller's costs while the contract is in force

A)unless the increase in the seller's costs is substantial.
B)under any circumstances.
C)unless the increase in the seller's costs makes it impossible for the seller to perform without losing money.
D)unless the increase in the seller's costs was not foreseeable at the time the contract was formed.

Question 45

Primo Pools Company and Aquatic Recreation,Inc. ,enter into a contract for a sale of prefabricated swimming pools.Under either a shipment contract or a destination contract,the seller must

A)allow the buyer to reject the goods for any reason.
B)deliver the goods to a particular destination.
C)place the goods into the hands of a carrier.
D)provide the buyer with any necessary documents of title.

Question 46

Citrus Groves contracts with four food companies to sell its entire crop of oranges.When half of the crop is lost to an unexpected insect infestation,Citrus must

A)apportion its surviving crop fairly among its customers.
B)breach some of its contracts.
C)buy elsewhere as many oranges as needed to satisfy its contracts.
D)substitute other fruit for the oranges.

Question 47

Pep Paints agrees to sell to Quality Painters Grade A-1 latex outdoor paint to be delivered May 8.On May 7,Pep tenders Grade B-2 paint.Quality rejects the Grade B-2 paint.Two days later,Pep tenders Grade C-3 paint with an offer of a price allowance.Pep has

A)additional,unlimited time to cure.
B)a reasonable,additional time to cure.
C)one more day to cure.
D)no more time to cure.

Question 48

Relax Chair Company contracts to deliver 100 chairs to Stuffy Furnishings Store on May 1 for which Stuffy agrees to pay.Relax tells Stuffy on April 15 that delivery will be delayed until June 1.Stuffy may

A)await performance,sue Relax,or suspend its own performance.
B)only await Relax's performance for a commercially reasonable time.
C)only sue Relax for breach of contract.
D)only suspend its own performance.

Question 49

Double D Ranch and Esau enter into a contract on August 1 for the sale of 200 cattle.Esau cancels the contract ten days later.Double D is unable to sell the cattle to another buyer.Double D is entitled to

A)force Esau to accept the cattle and recover the contract price.
B)keep the cattle and recover the contract price from Esau.
C)keep the cattle only.
D)recover the contract price from Esau but must destroy the cattle.

Question 50

Loni and Myra enter into a contract for a sale of clarinets and other wind instruments.Loni delivers,but Myra does not pay.Loni can normally recover as damages the difference between

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 51

Fact Pattern 14-1
Internet Cafes, Inc., contracts to buy all of its requirements for coffee, at a minimum of 1 million pounds per year, from Java Corporation for six years. After three years, Internet tells Java that it plans to sell its company to Kwik Eateries, Inc. Kwik refuses to assure Java that it will continue Internet’s contract.

-Refer to Fact Pattern 14-1.Java can

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

Question 52

On May 1,City Auto & Truck Sales agrees to sell a car to Dino.Five days later,Dino refuses delivery and cancels the contract.City is entitled to

A)force Dino to accept the car.
B)recover any damages from Dino but not resell the car.
C)resell the car and recover any damages from Dino.
D)resell the car but not recover any damages from Dino.

Question 53

Vehicle Leasing Agency (VLA)and Wander Trucking Company enter into a contract for a lease of eight cargo vans.VLA delivers eight vans,but they are not cargo-sized.Wander

A)cannot reject the entire shipment.
B)can reject the entire shipment.
C)must accept the entire shipment.
D)must reject the entire shipment.

Question 54

Craft Engineering,Inc. ,contracts for a sale of technical instruments to Detail Design Company.Before the date on which performance is due,Craft notifies Detail that it will not perform.This is

A)anticipatory repudiation.
B)perfect tender.
C)rejection of performance.
D)revocation of acceptance.

Question 55

Mineral Resource Company contracts to provide several manufacturers with tin.When a cartel of tin-producing countries suddenly embargoes future shipments of tin to Mineral Resource so that it cannot fulfill its contracts,the distributor

A)can substitute some other material for the tin.
B)is excused from the performance of its contracts.
C)is liable for breach of contract.
D)must still supply the tin needs of its customers.

Question 56

Fact Pattern 14-1
Internet Cafes, Inc., contracts to buy all of its requirements for coffee, at a minimum of 1 million pounds per year, from Java Corporation for six years. After three years, Internet tells Java that it plans to sell its company to Kwik Eateries, Inc. Kwik refuses to assure Java that it will continue Internet’s contract.

-Refer to Fact Pattern 14-1.Kwik's refusal constitutes

A)a justified response based on Kwik's relation to the contract.
B)an assignment of Internet's rights under the contract.
C)a reasonable suspension of performance under the contract.
D)a repudiation of the contract.

Question 57

Sid and Tony enter a contract for a sale of Sid's collection of electric guitars.Before the time for performance,Sid tells Tony that he does not want to deliver the guitars.Anticipatory repudiation is

A)a breach of contract.
B)a compromise between two parties who are unable to perform.
C)a remedy available only to a breaching party.
D)a remedy available only to a nonbreaching party.

Question 58

Regal Manufacturing Company contracts to sell sweaters to Superb Styles Store.Before the sweaters are delivered,Superb indicates that it will not be able to pay.Regal can resell the goods

A)either after finishing the job (and identifying the goods),or after stopping the job.
B)only after finishing the job and identifying the goods.
C)only if Regal immediately stops the job.
D)under no circumstances.

Question 59

Timber Mills Corporation and Ur-Choice Lumberyards enter into a contract for a sale of plywood.Under a destination contract,the seller must

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 60

Genuine Seed Company and Hillside Farmers Cooperative enter into a contract for a sale of hybrid seeds.Under the perfect tender rule,Genuine Seed must ship or tender seeds to Hillside that

A)approximately conform to all of the details of the contract.
B)entirely conform to the contract except in one or two details.
C)exactly conform to the contract in every detail.
D)substantially conform to the contract in most details.

Question 61

Phil and Kelsey enter into a contract for a sale of Harmonica,a dog.Phil pays the price,but Kelsey does not deliver.Phil can use specific performance as a remedy if

A)Kelsey is lawfully withholding delivery of Harmonica.
B)Phil cannot effectively cure the defect.
C)Harmonica is unique.
D)Harmonica has not been identified to the contract.

Question 62

Bayou Boats,Inc. ,and Eventide Fishing Tours enter into a contract for a sale of seven swamp boats.Eventide pays for the goods,but Bayou does not deliver.Eventide can use replevin as a remedy if

A)Bayou is lawfully withholding the goods.
B)Eventide cannot effectively cure the defect.
C)Eventide is unable to cover for the goods.
D)the goods have not been identified to the contract.

Question 63

Signal Sets Company contracts to deliver one hundred 52-inch plasma high-definition television sets to a new retail customer,Tuner TV Store,on May 1,with payment to be made on delivery.Signal tenders delivery in its own truck.Tuner's manager notices that some of the cartons have scrape marks.Tuner's owner phones Signal's office and asks whether the sets might have been damaged as they were being loaded.Signal assures Tuner that the sets are in perfect condition.Tuner tenders Signal a check,which Signal refuses,claiming that the first delivery to new customers is always for cash.Tuner promises to pay the cash within two days.Signal leaves the sets with Tuner,which stores them in its warehouse pending its "Grand Opening Sale" on May 15.Two days later,Tuner's stocker opens some of the cartons and discovers that a number of the sets are damaged beyond ordinary repair.Signal claims Tuner has accepted the sets and is in breach by not paying on delivery.Will Signal succeed on these claims? Explain.

Question 64

Colby contracts in writing to sell his 2005 Dodge-brand pick-up truck to Efrem for $10,500.Colby agrees to deliver the truck on Friday,and Efrem promises to pay the $10,500 on the following Monday.On Thursday,Efrem tells Colby that he changed his mind and will not buy the truck.Over the weekend,Efrem changes his mind again and tenders $10,500 to Colby on Monday.Colby has not sold the truck to another party but refuses the tender and refuses to deliver.Efrem claims that Colby has breached their contract.Colby contends that Efrem's repudiation released him from his duty to perform under the contract.Who is correct,and why?

Question 65

Natural Foods,Inc. ,orders "Grade A" oil from Olive Grove Farms to process and sell to Pic 'N Pay Grocers.Olive Grove ships "Grade B" oil,which Natural Foods accepts.To recover damages for the nonconformity,Natural Foods must give notice of the breach within a reasonable time to

A)Olive Grove only.
B)Olive Grove,Pic 'N Pay,and the appropriate government agency.
C)Pic 'N Pay only.
D)the appropriate government agency only.

Question 66

Leather Products Stores,Inc. ,rejects a shipment of goods that does not conform to its contract with Manufactured Cowhide Corporation,but is unable to obtain instructions from the seller.Leather Products may

A)resell or return the goods only.
B)resell or store the goods only.
C)return or store the goods only.
D)resell,return,or store the goods.

Question 67

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

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 68

Text Publishers,Inc. ,contracts for a sale of textbooks to University Bookstores,Inc.Vital Shipping Corporation,the carrier,transports the books to Warehouse Storage Company.Text's right to stop delivery is lost when University's rights to the goods are acknowledged by

A)the appropriate government agency only.
B)Vital Shipping only.
C)Vital Shipping or Warehouse Storage.
D)Warehouse Storage only.

Question 69

BBQ,Inc. ,makes and sells grills to Grill Mart,a retailer,which sells one of the grills to Hope,a consumer.BBQ and Grill Mart include in their contracts a limitation on consequential damages for personal injuries arising from a breach of warranty.This is prima facie unconscionable with respect to

A)all of these parties.
B)BBQ and Grill Mart,but not Hope.
C)Hope only.
D)none of these parties.

Question 70

Hi-Tech Company contracts to sell fiber optic cable to Internet Services,Inc.Hi-Tech may bring an action to recover the purchase price and incidental damages if Internet

A)accepts the cable and pays for it.
B)accepts the cable but does not pay for it.
C)rejects the cable.
D)revokes acceptance of the cable.

Question 71

Garden Field Farms and Haute Gourmet Restaurant,Inc. ,enter into a contract for a sale of lettuce before Haute Gourmet declares bankruptcy.Garden Field can stop delivery of the goods in transit

A)only if the quantity is at least a carload.
B)only if the quantity is at least a planeload.
C)only if the quantity is at least a truckload.
D)regardless of the quantity.

Question 72

Cheesy Pizza Company contracts to sell 1,000 cases of frozen pizzas to Roller Rinks,Inc. ,but refuses to deliver.Due to a spice shortage,Roller Rinks cannot obtain pizza elsewhere.Roller Rinks's right to recover the goods from Cheesy is the right of

A)cover.
B)cure.
C)replevin.
D)specific performance.