Question 1

Where the seller fails to make delivery, the buyer can cancel the contract, but he must give the seller notice of his cancellation.

Accepted Answer

In contract law, when a seller fails to deliver goods, the buyer typically has the right to cancel the contract, but must notify the seller of the cancellation to make it effective.

Question 2

Vandehal Company's total liabilities are $520,000 and its total assets are $460,000, and the company is unable to pay debts as they become due. Vandehal's situation falls within the bankruptcy meaning, but not the Code's definition, of insolvency.

Accepted Answer

The answer of Vandehal Company's total liabilities are $520,000 and...

Question 3

A contractual remedy is optional unless the parties expressly agree that it is to be exclusive.

Accepted Answer

A contractual remedy is generally optional unless the contract specifies that it is the exclusive remedy, meaning the parties have agreed that no other remedies are available.

Question 4

The contract between the buyer and the seller may expressly limit or exclude consequential damages so long as the contract is not unconscionable.

Accepted Answer

Contracts can limit or exclude consequential damages if the terms are not deemed unconscionable, meaning they are not excessively unfair or oppressive to one party.

Question 5

Specific performance is an equitable remedy which seeks to compel the party in breach to perform the contract according to its terms.

Accepted Answer

Specific performance is an equitable remedy used in contract law to require the breaching party to fulfill their obligations as outlined in the contract, rather than simply paying damages.

Question 6

The contract between the buyer and the seller cannot provide for any additional remedies other than those specified in the Code.

Accepted Answer

The contract between the buyer and the seller can provide for additional remedies beyond those specified in the Uniform Commercial Code (UCC), as long as they do not violate any laws or public policy.

Question 7

The availability of some buyer's remedies depends on the buyer's actions.

Accepted Answer

The availability of certain remedies for buyers can depend on their actions, such as notifying the seller of a breach or rejecting non-conforming goods within a reasonable time.

Question 8

On the seller's breach, if the buyer makes substitute purchases in good faith and without unreasonable delay, she may recover, as damages, the difference between the cost of cover and the contract price, plus incidental damages but minus any expenses she saved because of the seller's breach.

Accepted Answer

This statement accurately reflects the remedy of "cover" under the Uniform Commercial Code (UCC) for a buyer when a seller breaches a contract. The buyer can recover the difference between the cost of cover and the contract price, plus any incidental damages, minus any expenses saved due to the breach.

Question 9

Which of the following is not a remedy of the buyer?

Accepted Answer

The right to stop delivery of the goods is typically a remedy available to the seller, not the buyer. The buyer's remedies generally include cover, specific performance, and recovery of damages.

Question 10

When the buyer breaches a sales contract, if the difference between the contract price and the market price will not place the seller in as good a position as performance would have, then the seller may recover the lost profit.

Accepted Answer

If the standard measure of damages (difference between contract price and market price) is inadequate to make the seller whole, the seller may be entitled to recover lost profits to be placed in the position they would have been if the contract was performed.

Question 11

If the seller has failed to comply with Code requirements in making a resale of goods that were wrongfully rejected, a good faith purchaser at the resale takes the goods subject to rights of the original buyer.

Accepted Answer

The answer of If the seller has failed to comply...

Question 12

On July 30 Christina, in Knoxville, agrees to sell machine-stitched quilts to Deanna, in Los Angeles for $2,500 C.O.D., with delivery by October 1. When Christina fails to deliver the quilts, Deanna suffers incidental damages of $400 and consequential damages of $300. Deanna may recover:

Accepted Answer

Deanna can recover the difference between the market price on the delivery date and the contract price, plus incidental and consequential damages, minus any expenses saved due to the breach.

Question 13

When existing goods are identified to the contract of sale, the buyer acquires a special property interest in the goods.

Accepted Answer

In a contract of sale, once goods are identified, the buyer gains a special property interest, giving them certain rights and responsibilities regarding the goods.

Question 14

The right of the buyer to recover from an insolvent seller the goods in which he has a special property interest and for which he has paid, existed at common law before being included in the Code.

Accepted Answer

The answer of The right of the buyer to recover...

Question 15

A seller's remedies upon the buyer's default:

Accepted Answer

The seller's remedies upon the buyer's default can be goods oriented (e.g., withholding delivery), money oriented (e.g., suing for the price), or obligation oriented (e.g., canceling the contract).

Question 16

A buyer's incidental damages include reasonable expenses or commissions in effecting cover.

Accepted Answer

Incidental damages for a buyer include reasonable expenses incurred in obtaining substitute goods, known as "cover," after a seller's breach.

Question 17

Massey Fabrications sells some equipment to Keiser Co., warranting its suitability for Keiser's purpose. The equipment, which is not suitable for Keiser's purpose, causes $5,000 in damage to Keiser's property and $12,000 in personal injuries. Keiser can recover $17,000 in consequential damages.

Accepted Answer

Keiser can recover consequential damages because the equipment was warranted to be suitable for their purpose, and the failure of the equipment to meet this warranty directly caused property damage and personal injuries.

Question 18

An aggrieved seller who resells wrongfully rejected goods is accountable to the original buyer for any profit made on the resale.

Accepted Answer

An aggrieved seller who resells wrongfully rejected goods is not accountable to the original buyer for any profit made on the resale, as the resale is a remedy for the seller to mitigate losses.

Question 19

If the breach by the seller concerns the whole contract, the buyer may cancel the entire contract.

Accepted Answer

If a breach by the seller affects the entire contract, the buyer is typically entitled to cancel the whole contract under contract law principles.

Question 20

Article 2A authorizes liquidated damages payable by either party for default or any other act or omission.

Accepted Answer

Article 2A authorizes liquidated damages payable by either party for default or any other act or omission.

Quiz 23: Sales Remedies

Where the seller fails to make delivery, the buyer can cancel the contract, but he must give the seller notice of his cancellation.

Vandehal Company's total liabilities are $520,000 and its total assets are $460,000, and the company is unable to pay debts as they become due. Vandehal's situation falls within the bankruptcy meaning, but not the Code's definition, of insolvency.

A contractual remedy is optional unless the parties expressly agree that it is to be exclusive.

The contract between the buyer and the seller may expressly limit or exclude consequential damages so long as the contract is not unconscionable.

Specific performance is an equitable remedy which seeks to compel the party in breach to perform the contract according to its terms.

The contract between the buyer and the seller cannot provide for any additional remedies other than those specified in the Code.

The availability of some buyer's remedies depends on the buyer's actions.

On the seller's breach, if the buyer makes substitute purchases in good faith and without unreasonable delay, she may recover, as damages, the difference between the cost of cover and the contract price, plus incidental damages but minus any expenses she saved because of the seller's breach.

Which of the following is not a remedy of the buyer?

When the buyer breaches a sales contract, if the difference between the contract price and the market price will not place the seller in as good a position as performance would have, then the seller may recover the lost profit.

If the seller has failed to comply with Code requirements in making a resale of goods that were wrongfully rejected, a good faith purchaser at the resale takes the goods subject to rights of the original buyer.

On July 30 Christina, in Knoxville, agrees to sell machine-stitched quilts to Deanna, in Los Angeles for $2,500 C.O.D., with delivery by October 1. When Christina fails to deliver the quilts, Deanna suffers incidental damages of $400 and consequential damages of $300. Deanna may recover:

When existing goods are identified to the contract of sale, the buyer acquires a special property interest in the goods.

The right of the buyer to recover from an insolvent seller the goods in which he has a special property interest and for which he has paid, existed at common law before being included in the Code.

A seller's remedies upon the buyer's default:

A buyer's incidental damages include reasonable expenses or commissions in effecting cover.

Massey Fabrications sells some equipment to Keiser Co., warranting its suitability for Keiser's purpose. The equipment, which is not suitable for Keiser's purpose, causes $5,000 in damage to Keiser's property and $12,000 in personal injuries. Keiser can recover $17,000 in consequential damages.

An aggrieved seller who resells wrongfully rejected goods is accountable to the original buyer for any profit made on the resale.

If the breach by the seller concerns the whole contract, the buyer may cancel the entire contract.

Article 2A authorizes liquidated damages payable by either party for default or any other act or omission.