Deck 22: Performance

Question 1

If a buyer accepts part of a shipment and rejects part of a shipment,he must pay for the items he keeps at the contract rate.

Answer 1

True

Question 2

On April 1,Marco bought a sailboat from a local marina.Though the boat was defective and did not turn about properly,Marco used it extensively all summer and it was no longer in the same condition as when it was bought.By the end of the summer,Marco had waived his right to revoke acceptance.

Answer 2

True

Question 3

A merchant buyer who has rightfully rejected goods must follow reasonable instructions from the seller regarding disposition of the goods if the seller has no agent at the place of rejection.

Answer 3

True

Question 4

Parties may not contractually agree to limit the operation of the perfect tender rule.

Question 5

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

Question 6

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

Question 7

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

Question 8

A contract that is FOB Dallas where the seller is in Chicago and the buyer is in Dallas is a destination contract.

Question 9

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 10

The buyer's payment or tender of payment,unless otherwise agreed,is a condition to the seller's duty to tender and to complete delivery.

Question 11

Rejection is ineffective unless the buyer notifies the seller.

Question 12

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

Question 13

Rightful rejection must be made within a reasonable time after the goods have been tendered or delivered.

Question 14

Tender can be made any time of the day or night when the seller feels like delivering the goods.

Question 15

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

Question 16

In an installment contract,the buyer may reject any nonconforming installment if the nonconformity substantially impairs the value of that installment and cannot be cured.

Question 17

The seller's tender of performance does not have to conform to the Code's perfect tender rule.

Question 18

The Code does not excuse performance based upon commercial impracticability.

Question 19

John entered into a contract with Miriam to build her a walnut dining room table for $1,000.A few days later,the price of walnut lumber increased 200%,which will result in John's incurring a $300 loss on the table.Due to the price increase,John is automatically excused from performance under the contract.

Question 20

Unless otherwise agreed,the buyer has the right to inspect the goods before making payment.

Question 21

If no definite time for delivery is fixed by the terms of the contract,delivery:

A) will not take place.
B) must begin within 10 days of the contract.
C) must be immediate.
D) and acceptance must happen within a reasonable amount of time.

Question 22

Revocation following an acceptance of the goods gives the buyer fewer rights than he would have had if he had at first rejected the goods.

Question 23

Amanco is to deliver to D & R Wholesalers 50 dozen wire-rim glasses frames by October 15.On October 2,Amanco delivers 30 dozen wire-rim frames and 20 dozen plastic frames.If D & R rejects the frames:

A) Amanco has until October 15 to cure the defect if it notifies D & R of its intention to do so.
B) D & R need not notify Amanco of its rejection of the nonconforming goods in order for the rejection to be effective since Amanco should know the goods did not meet the contract specifications.
C) the contract is automatically voided since the goods were nonconforming.
D) Amanco has no opportunity to cure the defect since it exhibited bad faith in not sending goods specified in the original contract.

Question 24

The CISG follows the perfect tender rule,as does the Code.

Question 25

Knecht contracts to sell $20,000 of goods to Morales.Later,Morales hears from another supplier that Knecht is having financial trouble,and Morales is concerned that Knecht will not be able to fill his order.If Morales has reasonable grounds for insecurity about Knecht's contractual performance:

A) Morales has no recourse except to wait for the contractual delivery date and,if Knecht fails to deliver,Morales can then sue for breach of contract.
B) Morales may demand written assurance of performance from Knecht before the contract delivery date,and Knecht must provide adequate assurance within a reasonable time not exceeding 30 days.
C) Morales may demand assurance of performance from Knecht,and Knecht must provide adequate assurance within ten days or the contract is repudiated.
D) the statement by the other supplier creates an anticipatory repudiation which allows Morales to avoid the contract.

Question 26

Under the CISG,if prior to the date for performance of the sales contract it is clear that one of the parties will commit a fundamental breach,the other party may declare the contract avoided.

Question 27

When the nonconformity or default substantially impairs the value of the installment but not the value of the entire contract,the buyer can reject the installment,even if the seller gives adequate assurance of the installment's cure.

Question 28

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

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

Question 29

Watkins has furniture,some of which it has sold to Home Interiors,stored in Central Warehouse.It is to be delivered without being moved.In order to fulfill its obligations to tender delivery,Watkins may either tender to Home Interiors a document of title or obtain an acknowledgment by the warehouse of Home Interiors' right to possess the furniture.

Question 30

Acceptance of any part of a commercial unit is acceptance of the entire unit.

Question 31

In a "no arrival,no sale" contract,the seller is responsible to the buyer for the goods' failure to arrive.

Question 32

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 commercial unit(s)and reject the rest.
D) Any of these.

Question 33

A buyer who sells rejected goods on behalf of the seller is entitled to reasonable expenses not to exceed five percent of the gross proceeds.

Question 34

The Code provides that where neither party is at fault and the agreed manner of delivering the goods becomes commercially impracticable,a substituted manner of performance,if commercially reasonable,must be tendered and accepted.

Question 35

A commercial unit may be a group of items,such as a dozen pairs of socks.

Question 36

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 37

If a lease contract does not sufficiently cover the particulars of performance,Article 2A provides many gap-filler provisions.

Question 38

Unless the contract specifies otherwise,goods may be tendered in installments.

Question 39

Parker agrees to sell to Thompson 500 bushels of soybeans at $9.50 per bushel.Without the fault of Parker or Thompson,200 bushels are destroyed.Thompson must take the remaining 300 bushels and pay Parker $2,850.

Question 40

In a contract that provides that the sale is F.O.B.Chicago,the seller must at his own expense and risk transport the goods to Chicago and there tender delivery to the buyer.

Question 41

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

Question 42

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 if J & J cannot cure it.
D) cannot reject the installment since it is part of a series.

Question 43

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

A) Ordinarily,a strike by employees of the seller will excuse performance by the seller.
B) Increased production costs alone will excuse performance by the seller.
C) Performance will be excused when it is commercially 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 44

Sam agrees to sell Jaden one 18-cubic-foot,yellow refrigerator for $1200.It is to be delivered to Jaden's home on July 7.Under the perfect tender rule,which one of the following cases would be a rightful rejection of the goods?

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

Question 45

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 46

Goods are to be sent F.O.B.Buffalo,NY to Raleigh,NC by UPS.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 47

Which of the following terms indicates a shipment contract?

A) F.A.S.seller's port
B) C.I.F.
C) C.& F.
D) All of these are shipment contracts.

Question 48

Drapery Makers has signed a contract to make and sell to Hyer curtains for 20 windows by March 31.Hyer,however,delays in giving Drapery Makers the dimensions it needs to know in order to do the work.In this case,Drapery Makers:

A) may proceed to do the work when it receives the information if it performs reasonably.
B) will get paid for their availability to perform even if they never make the curtains.
C) has no remedies under the Code.
D) can charge Hyer a per-day penalty for each day of the delay.

Question 49

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 sell the defective tires for whatever they can get for them and sue Supertread for the difference.

Question 50

Mary purchased a dining room table and chairs from Baymore Co.It was defective and Baymore has tried unsuccessfully for the past four weeks to repair the defects.Mary may revoke her acceptance as long as she:

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

Question 51

Which of the following is correct with respect to the buyer's obligation of payment?

A) In the absence of agreement,payment is due at the time and place the buyer is to receive the goods.
B) Payment by check is sufficient unless the seller demands currency and allows the buyer a reasonable time in which to obtain it.
C) If the buyer so agrees,he must pay for the goods in advance of delivery.
D) All of these are correct.

Question 52

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 53

Pedro ordered a custom-made suit from Rooks & Sons to be delivered by Friday at 5 p.m.When it is delivered to his office on Friday afternoon,he is in conference with a client.His secretary hangs the suit in the office closet.When Pedro tries on the suit Saturday evening,he discovers that the pants are cuffed.He had ordered cuffless trousers,so he called Rooks & Sons on Monday and informed them that he was returning the suit.What can he do?

A) He cannot revoke acceptance since the cuffs are not difficult to discover.
B) He can revoke acceptance because the cuffs substantially impair the value of the goods to him.
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 54

If destruction or casualty to goods,total or partial,occurs after risk of loss has passed to the buyer,who is responsible for losses?

A) The seller
B) The buyer,who must pay the entire contract price of the goods
C) The buyer if the loss is partial;both parties share the loss if it is total
D) The carrier delivering the goods

Question 55

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 didn't have any conforming items to tender
C) Where the buyer has revoked acceptance
D) All of these.

Question 56

Under the CISG:

A) the seller has no right to cure a defective delivery.
B) if the seller does not perform on time,the buyer may fix an additional,reasonable period of time for performance.
C) the seller has a limited right to cure a defective performance,but only before the date for delivery specified in the contract.
D) the seller may,even after the date for delivery,cure a defective performance if it can be done without unreasonable delay.The buyer cannot claim damages for delay as long as the cure was within a reasonable time.

Question 57

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

A) Through a failure to reject after he has had a reasonable opportunity to inspect them
B) Immediately upon delivery
C) Only by conduct that shows the buyer's willingness to become owner of the goods
D) Only after an express acceptance

Question 58

Edna orders a set of china from Northwestern Catalog.Northwestern sends the dishes by UPS.The contract does not specify when payment is to be made.Edna must pay when:

A) she orders the goods from Northwestern.
B) she gets the goods from UPS.
C) Northwestern takes the goods to UPS.
D) she receives notification that the goods have been shipped..

Question 59

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 60

Willingness by the buyer to become the owner of the goods tendered or delivered to him by the seller is:

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

Question 61

Burnside Roofing contracts to sell asphalt and metal shingles to Faubush Contractors.Burnside,through no fault of its own,is unable to deliver the shingles to Faubush by rail as agreed because that type of carrier is unavailable.Explain what the UCC requires.