Deck 22: Performance Breach of Sales Lease Contracts

Question 1

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

Answer 1

True

Question 2

Under the UCC, an innocent party under a breached sales or lease contract is limited to one exclusive remedy.

Answer 2

False

Question 3

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

Answer 3

False

Question 4

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

Question 5

Unless the parties agree otherwise, a buyer or lessee must pay for goods at the time and place of their receipt.

Question 6

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

Question 7

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

Question 8

Under a destination contract, a seller must deliver the goods to a carrier, after which the risk of loss passes to the buyer.

Question 9

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

Question 10

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

Question 11

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

Question 12

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

Question 13

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

Question 14

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

Question 15

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

Question 16

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

Question 17

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

Question 18

A seller can terminate a contract on the basis of commercial impractica?bility if in?creases in the seller's costs threaten to undercut its profits.

Question 19

Under the UCC, an innocent party to a breached sales or lease contract is not limited to one exclusive remedy.

Question 20

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

Question 21

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

Question 22

A buyer who accepts conforming goods cannot revoke the acceptance.

Question 23

A lessor's failure to make proper delivery of unique goods under a con?tract will not usu?ally give the lessee the right to specific performance.

Question 24

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

Question 25

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

Question 26

A buyer may reject a seller's goods only if they fail to conform to a mate?rial term of the contract.

Question 27

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

Question 28

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 29

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

Question 30

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

Question 31

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

Question 32

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 33

If a buyer repudiates a contract, the seller cannot re?cover damages.

Question 34

A buyer who accepts nonconforming goods cannot revoke the acceptance.

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

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

Question 37

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 38

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

Question 39

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

Question 40

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 41

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 42

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 43

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 re?jects 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 44

International Gem Corporation agrees to sell Jewelry 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 45

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 46

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 47

Design Architects, Inc., and Excel Supply Company contract for a sale of office furniture. Design Architects, which is insolvent, breaches the contract. Excel 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 48

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 contain?ers, 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 49

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 50

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 enti?tled 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 51

According the court in Case 22.1, 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 52

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 53

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 deliv?ery is in

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

Question 54

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 55

Price-Cut Discount Stores are open to consumers. The UCC requirement of good faith imposes

A) a higher duty on consumers than Price-Cut.
B) a higher duty on Price-Cut than on consumers.
C) no duty on either Price-Cut or consumers.
D) the same duty on Price-Cut and consumers.

Question 56

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 57

Fact Pattern 22-A1
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 22-A1. 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 58

Rocky and Slim enter into a contract for a sale of five rowboats. Circumstance make it difficult for Rocky to perform, and the contract is breached. Slim looks for remedies. Unlike the common law, under the UCC, remedies are

A) cumulative.
B) exclusive.
C) limited.
D) unlimited.

Question 59

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 60

Super Resources, Inc., sells unprocessed minerals to commercial proc?essors in Texas. With regard to the UCC's good faith requirement, Super can

A) avoid it only by a conspicuous written disclaimer.
B) avoid it only by oral disclaimer.
C) avoid it with or without a disclaimer.
D) not disclaim it.

Question 61

Quincy buys a car under a warranty from Ride Motors. Quincy soon discovers that the car has a defect that significantly affects its value and use. In all states and the District of Columbia, Quincy may have remedies under

A) a lemon law.
B) Article 74 of the CISG.
C) a transit law.
D) the Automobile Dealers' Day in Court Act.

Question 62

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.

Question 63

Fact Pattern 22-B1
First State Bank issues a letter of credit in favor of Oboe Company, an American firm, to facilitate an international sales contract to buy resources from Lapland Mining, Ltd., a Finnish company.
Refer to Fact Pattern 22-B1. First State Bank

A) is responsible for making sure that the parties perform the contract.
B) will make payment once the transaction has been completed.
C) will make payment when Lapland presents the proper documents.
D) none of the above.

Question 64

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 inci?dental 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 65

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 66

Fact Pattern 22-A1
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 22-A1. 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 67

Fact Pattern 22-B1
First State Bank issues a letter of credit in favor of Oboe Company, an American firm, to facilitate an international sales contract to buy resources from Lapland Mining, Ltd., a Finnish company.
Refer to Fact Pattern 22-B1. First State Bank must pay Lapland when Lapland

A) enters into the contract with Oboe.
B) verifies that Oboe has the money to pay for the purchase.
C) complies with the terms and conditions of the letter of credit.
D) none of the above.

Question 68

Fact Pattern 22-B1
First State Bank issues a letter of credit in favor of Oboe Company, an American firm, to facilitate an international sales contract to buy resources from Lapland Mining, Ltd., a Finnish company.
Refer to Fact Pattern 22-B1. In a letter of credit, the ben?eficiary is

A) Lapland.
B) Oboe.
C) First State Bank.
D) none of the above.

Question 69

Ghangzhou, Ltd., in China and Hot Togs, Inc., in the United States enter into a contract for a sale of casual clothing. Under the United Nations Convention on Contracts for the International Sale of Goods (CISG), on a breach of the contract, the nonbreaching party 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' two countries.

Question 70

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 inju?ries arising from a breach of warranty. This is prima facie un?conscionable 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 71

Double D Ranch and Esau enter into a contract on August 1 for the sale of 200 cattle. Esau cancels the con?tract ten days later. Double D is unable to sell the cattle to another buyer. Double D is enti?tled 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 72

Amble 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, Amble refuses to go through with the deal. Blacksmith can recover

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

Question 73

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 74

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

A) Delta 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 75

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 76

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 77

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 78

Regal Manufacturing Company contracts to sell sweaters to Superb Styles Store. Before the sweat?ers 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 79

Fact Pattern 22-B1
First State Bank issues a letter of credit in favor of Oboe Company, an American firm, to facilitate an international sales contract to buy resources from Lapland Mining, Ltd., a Finnish company.
Refer to Fact Pattern 22-B1. To obtain payment, Lapland must comply with all of the requirements of the letter of credit

A) strictly.
B) substantially.
C) reasonably.
D) materially.

Question 80

Field Gardens and Gourmet Restaurant, Inc., enter into a con?tract for a sale of lettuce before Gourmet declares bankruptcy. 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.