Question 1

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.

Accepted Answer

Natural Foods should give notice of the breach within a reasonable time to Olive Grove only, as they are the seller who failed to fulfill the terms of the contract by sending "Grade B" oil instead of "Grade A". However, if the "Grade B" oil poses a health hazard or violates any food safety regulations, Natural Foods may need to report it to the appropriate government agency as well. It is not necessary to notify Pic 'N Pay, as they are not directly involved in the contractual agreement between Natural Foods and Olive Grove.

Question 2

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?

Accepted Answer

The answer of Colby contracts in writing to sell his...

Question 3

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.

Accepted Answer

The answer of Text Publishers,Inc.,contracts for a sale of textbooks...

Question 4

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.

Accepted Answer

Specific performance is a remedy that is available when the subject matter of the contract is unique, such as a one-of-a-kind piece of artwork or a rare antique. In this case, since Harmonica is a dog and therefore unique, Phil can use specific performance as a remedy if Kelsey does not deliver the dog. None of the other options listed would be applicable in this situation.

Question 5

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.

Accepted Answer

Pablo can normally recover as damages the difference between the contract price and the market price, which represents the amount of loss he suffered due to Owen's breach of contract. The market price is the price that a willing buyer would pay and a willing seller would accept in the open market at the time of the breach. This measure of damages is intended to put Pablo in the same position he would have been in if the contract had been performed as agreed upon. Option A and B are not correct as these are not the relevant measures of damages in this scenario. Option D is also not correct as the current prices in the parties' locations have no bearing on the damages recoverable for breach of contract.

Question 6

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.

Accepted Answer

The answer of Hi-Tech Company contracts to sell fiber optic...

Question 7

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.

Accepted Answer

Replevin is the right to recover goods wrongfully withheld from the rightful owner. As Cheesy Pizza Company refuses to deliver the pizzas, Roller Rinks, Inc. has the right to recover them through replevin. Choice A, cover, refers to a buyer's right to purchase substitute goods when the seller breaches the contract. Choice B, cure, refers to a seller's right to remedy a nonconforming product before the contract's deadline. Choice D, specific performance, refers to a court order compelling a party to perform contractual obligations as agreed. These options are not applicable in this scenario.

Question 8

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.

Accepted Answer

Garden Field Farms can stop delivery of the goods in transit regardless of the quantity because in this scenario Haute Gourmet Restaurant, Inc. has declared bankruptcy. According to the UCC (Uniform Commercial Code), if one party declares bankruptcy before receiving the contracted goods, the other party may stop delivery of the goods in transit, regardless of the quantity.

Question 9

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.

Accepted Answer

The limitation on consequential damages for personal injuries arising from a breach of warranty is unconscionable only with respect to Hope, the consumer. This is because it is unfair for a manufacturer and a retailer to limit liability for personal injuries caused by a defective product, and the consumer may not have equal bargaining power or knowledge to negotiate the terms of the contract. However, it may not necessarily be unconscionable for BBQ and Grill Mart because they may have negotiated the terms of the contract and agreed to the limitation of liability.

Question 10

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.

Accepted Answer

The answer of Signal Sets Company contracts to deliver one...

Question 11

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.

Accepted Answer

Leather Products may choose to resell the goods, return the goods, or store them until they receive instructions from the seller. As the seller is not providing any instructions, Leather Products has the right to choose the course of action that is most beneficial for them.

Question 12

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.

Accepted Answer

The answer of Bayou Boats,Inc.,and Eventide Fishing Tours enter into...

Quiz 16: Performance Breach of Sales Lease Contracts

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

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

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

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

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

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

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

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

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

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