Question 1

Sally's Sweet Fruits contracts with Fruits to You, Inc. for a delivery of two hundred pounds of strawberries to be delivered by Keep Kool Trucking, a trucking company with refrigerated trucks. On the day of delivery, the refrigeration units on Keep Kool's trucks are not working. Fruits to You
A) may ship the goods to Sally's using another trucking company with refrigerated trucks.
B) must refund Sally's money and cancel the contract.
C) must wait to ship the strawberries until Keep Kool has fixed its trucks.
D) must ship the goods through a different carrier and pay Sally incidental damages.

Accepted Answer

Fruits to You can still fulfill the contract by using another trucking company with refrigerated trucks to deliver the strawberries to Sally's. This will fulfill the obligation of the contract while also ensuring the quality and safety of the product. Additionally, Fruits to You may be liable for any incidental damages that Sally's incurs as a result of the delayed delivery.

Question 2

Silas Paving Co. contracts to buy some construction machinery from Massive Earthmovers, Inc. Before either party performs, Massive sells its assets to Phoenix Equipment Corp. On learning of the sale, Silas is concerned about its contract with Massive. Silas should
A) demand assurances of performance from Massive.
B) consider the contract repudiated and sue Massive for breach.
C) buy the machinery from a different supplier and bill Massive for the price.
D) buy the machinery from a different supplier and bill Phoenix for the price.

Accepted Answer

Silas should contact Massive and demand assurances of performance given the contract they signed. The sale of Massive's assets does not automatically relieve them of their obligations under the contract. Silas should first gather information and seek a resolution with the new owner or Massive before considering legal action or alternative suppliers.

Question 3

Pine 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.

Accepted Answer

Under a destination contract, the seller is responsible for delivering the goods to a specific destination agreed upon by the parties. The seller must ensure that the goods are properly packaged and labelled, and delivered within a reasonable time frame to the destination specified in the contract. The risk of loss or damage to the goods during transportation rests with the seller until delivery is completed.

Question 4

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.

Accepted Answer

According to the perfect tender rule, the goods must exactly conform to the contract in every detail. Therefore, BRC must provide the ten hydraulic lifts that meet all of the requirements under the lease agreement with Cartage Trucking Company.

Question 5

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.

Accepted Answer

Food Packaging, Inc., has failed to meet the agreed quantity and size of the containers for the purchase order. Golden Dairy Company has the right to reject the delivery. However, the notice of intent to cure gives Food Packaging, Inc., a reasonable time to replace the containers. Therefore, option (C) may reject delivery, and notice to Golden of Food's intent to cure will give Food a reasonable time to replace the containers is the best choice.

Question 6

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.

Accepted Answer

Wander Trucking Company can reject the entire shipment because the vans delivered do not conform to the agreed-upon terms of the contract.

Question 7

Kim's Pony Rides orders ten saddles from Little Horse Saddles, Inc. The sales contract states that if the saddles are defective, Kim's will allow Little Horse Saddles to repair or replace them instead of rejecting the shipment. When the saddles arrive, they are defective. In this case, the perfect tender rule
A) does not apply.
B) applies to both parties.
C) applies only to Little Horse Saddles.
D) applies only to Kim's Pony Rides.

Accepted Answer

The answer of Kim's Pony Rides orders ten saddles from...

Question 8

Shane's Auto Parts orders twenty tires from Tough Tires, Inc. The truck delivering the tires to Shane's is in an accident and ten of the tires are damaged. Shane's Auto Parts
A) cannot reject the entire shipment.
B) must still pay for all twenty tires at the original contract price.
C) may inspect the tires and accept the shipment with a reduction in price.
D) must reject the entire shipment.

Accepted Answer

Shane's Auto Parts can inspect the tires and accept the shipment with a reduction in price. This is because the Uniform Commercial Code allows a buyer to accept a shipment with damages if the damages are minor and can be compensated with a reduction in price. Therefore, Shane's can still receive the 10 undamaged tires at the original price, but negotiate a lower price for the 10 damaged tires.

Question 9

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.

Accepted Answer

When a party is prevented from performing their contractual obligations due to an unforeseen event outside of their control, such as a government embargo, it is considered a force majeure event. This generally excuses the affected party from performance without liability for breach of contract. Therefore, option B is the best choice. The distributor is not obligated to supply tin or substitute materials, and they are not liable for breach of contract due to the force majeure event.

Question 10

Beef Burgers, Inc. contracts to buy five hundred steers from Fattening Feedlots. Before Fattening Feedlots can deliver the steers, there is an outbreak of disease in the feedlot, and all the cattle are quarantined. In this case the perfect tender rule
A) applies to both parties.
B) does not apply.
C) applies only to Beef Burgers.
D) applies only to Fattening Feedlots.

Accepted Answer

The perfect tender rule applies when the seller delivers goods that conform to the exact requirements of the contract. However, if circumstances beyond the control of either party, such as a quarantine, prevent the seller from delivering the goods, the rule does not apply. Therefore, in this case, the perfect tender rule does not apply.

Question 11

Julia orders twelve violins for her music shop from Notable Notes Instrument Manufacturers. The sale is made on credit. Julia orders the violins on May 1, Notable Notes ships the violins on May 2, and Julia receives the violins on May 4. Julia sells all the violins by June 15. Julia's credit period most likely began on
A) May 1.
B) May 2.
C) May 4.
D) June 15.

Accepted Answer

The credit period usually begins on the date the goods are shipped or delivered, which in this case is May 2nd when Notable Notes ships the violins. Therefore, Julia's credit period most likely began on May 2nd.

Question 12

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.

Accepted Answer

Esau cannot cancel the contract without Double D's agreement. As Double D is unable to sell the cattle to another buyer, it can keep the cattle and recover the contract price from Esau.

Question 13

Mitch and Nadine enter into a contract for a sale of seventy-six specially made motion detectors. When Nadine does not deliver within a reasonable time after the agreed delivery date, Mitch files a suit for breach. Nadine asserts the doctrine of commercial impracticability. This doctrine extends only to problems that are
A) foreseen.
B) preventable.
C) unforeseen.
D) ordinarily assumed by a seller or lessor.

Accepted Answer

The doctrine of commercial impracticability excuses a party's performance when an unforeseen event, such as a natural disaster or government regulation, makes performance commercially impracticable. Therefore, the correct choice is (C) unforeseen.

Question 14

Sof' Chair Company contracts to deliver 100 chairs to Stuffy Furnishings Store on May 1 for which Stuffy agrees to pay. Sof' tells Stuffy on April 15 that delivery will be delayed until June 1. Stuffy may
A) await performance, sue Sof', or suspend its own performance.
B) only await Sof's performance for a commercially reasonable time.
C) only sue Sof' for breach of contract.
D) only suspend its own performance.

Accepted Answer

Stuffy has several options in this situation: they can choose to wait for the delayed delivery, they can sue Sof' for breach of contract, or they can suspend their own performance (i.e. withhold payment) until they receive the chairs. Option A is the most comprehensive and allows Stuffy to choose the course of action that best suits their needs.

Question 15

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.

Accepted Answer

TV Stores can reject the entire shipment if the goods do not conform to the contract in essential details. This is because nonconformity in essential matters constitutes a breach of contract, entitling the buyer to reject the entire shipment. However, if the nonconformity is minor, TV Stores cannot reject the entire shipment and must accept the conforming portion of the goods.

Question 16

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.

Accepted Answer

Under the perfect tender rule, the seller is required to deliver goods that exactly conform to the contract in every detail. So, Genuine Seed Company must ship or tender seeds that exactly conform to the contract.

Question 17

Loomis Weaving Company contracts to sell sweaters to Style Mart stores. Before the sweaters are delivered, Style Mart indicates that it will not be able to pay. Loomis 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 Loomis immediately stops the job.
D) under no circumstances.

Accepted Answer

Loomis can resell the goods either after finishing the job and identifying the goods or after stopping the job. This is because the goods remain the property of Loomis until they are delivered to Style Mart, and Loomis has the right to sell them to someone else if Style Mart is unable to pay.

Question 18

Levi's Toy Store orders one hundred board games from Big Board Games Warehouse. When the games are delivered, they are all missing pieces. Levi's Toy Store rejects the shipment. Big Board Games wants to cure. Big Board Games must
A) promptly notify Levi's Toy Store of the intent to cure.
B) pay Levi's Toy store a cure fee.
C) send a truck to pick up the nonconforming goods before the end of the business day.
D) create a new contract with Levi's Toy Store.

Accepted Answer

Promptly notifying Levi's Toy Store of the intent to cure is the best option, as it allows Big Board Games to offer a solution to the problem and potentially avoid any further legal action. It is important for Big Board Games to communicate with Levi's Toy Store and address the issue in a timely and professional manner. Options B, C, and D are not necessary or applicable in this situation.

Question 19

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.

Accepted Answer

Craft's notification to Detail that it will not perform is an anticipatory repudiation, which is a breach of contract before the performance is due.

Question 20

On January 10, Winchester Pet Supplies orders fifty small dog collars from Quality Collars, Inc. to be delivered by January 15. On January 13, Quality Collars tenders fifty large dog collars. Winchester Pet Supplies rejects the shipment. Quality Collars has
A) no right to cure.
B) until January 15 to cure.
C) until the end of the business day on January 13 to cure.
D) unlimited time to cure.

Accepted Answer

The answer of On January 10, Winchester Pet Supplies orders...

Quiz 16: Performance and Breach of Sales Lease Contracts

Sally's Sweet Fruits contracts with Fruits to You, Inc. for a delivery of two hundred pounds of strawberries to be delivered by Keep Kool Trucking, a trucking company with refrigerated trucks. On the day of delivery, the refrigeration units on Keep Kool's trucks are not working. Fruits to You

Silas Paving Co. contracts to buy some construction machinery from Massive Earthmovers, Inc. Before either party performs, Massive sells its assets to Phoenix Equipment Corp. On learning of the sale, Silas is concerned about its contract with Massive. Silas should

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

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

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

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

Shane's Auto Parts orders twenty tires from Tough Tires, Inc. The truck delivering the tires to Shane's is in an accident and ten of the tires are damaged. Shane's Auto Parts

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

Beef Burgers, Inc. contracts to buy five hundred steers from Fattening Feedlots. Before Fattening Feedlots can deliver the steers, there is an outbreak of disease in the feedlot, and all the cattle are quarantined. In this case the perfect tender rule

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

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

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

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

Loomis Weaving Company contracts to sell sweaters to Style Mart stores. Before the sweaters are delivered, Style Mart indicates that it will not be able to pay. Loomis can resell the goods

Levi's Toy Store orders one hundred board games from Big Board Games Warehouse. When the games are delivered, they are all missing pieces. Levi's Toy Store rejects the shipment. Big Board Games wants to cure. Big Board Games must

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

On January 10, Winchester Pet Supplies orders fifty small dog collars from Quality Collars, Inc. to be delivered by January 15. On January 13, Quality Collars tenders fifty large dog collars. Winchester Pet Supplies rejects the shipment. Quality Collars has