Chap. 20

Question 0

What is a breach?

Answer 0

Failure of a party to perform an obligation in a sales or lease contract.

Question 1

What is an obligation?

Answer 1

An action a party to a sales or lease contract is required by law to carry out.

Question 2

What is the tender of delivery?

Answer 2

The obligation of a seller to transfer and deliver goods to the buyer or lessee in accordance with a sales or lease contract.

Question 3

What is a shipment contract?

Answer 3

A sales contract that requires the seller to send the goods to be buyer but not to a specifically named destination.

Question 4

What is destination contract?

Answer 4

A sales contract that requires the seller to deliver the goods to the buyer’s place of business or another specified destination.

Question 5

What is the perfect tender rule?

Answer 5

A rule that says if the goods or tender of a delivery fall in any respect to conform to the contract, the buyer may opt to reject the whole shipment, to accept the shipment, or to reject part and accept part of the shipment.

Question 6

What is the right to cure?

Answer 6

An opportunity to repair or replace defective or nonconforming goods.

Question 7

What is an installment contract?

Answer 7

A contract that requires or authorizes goods to be delivered and accepted in separate lots.

Question 8

What is good faith?

Answer 8

Every contract or duty within this Act imposes an obligation of good faith in its performance or enforcement.

Question 9

What is reasonableness?

Answer 9

A term used throughout the UCC to establish the duties of performance by the parties to sales and lease contracts.

Question 10

What is commercial reasonableness?

Answer 10

The term that establishes certain duties of merchants under the UCC.

Question 11

What is acceptance?

Answer 11

An act that occurs when a buyer or lessee takes either of the following actions after a reasonable opportunity to inspect the goods that are the subject of a contract: signifies to the seller or lessor in words or by conduct that the goods are conforming or that the buyer or lessee will take or retain the goods despite their nonconformity or fails to effectively reject the goods within a reasonable time after their delivery or tender by the seller or lessor. Acceptance also occurs of a buyer acts inconsistently witht he seller’s ownership rights in the goods.

Question 12

What is revocation of acceptance?

Answer 12

Reversal of acceptance.

Question 13

What is the right to withhold delivery?

Answer 13

The right of a seller or lessor to refuse to deliver goods to a buyer or lessee upon breach of a sales or lease contract by the buyer or lessee or the insolvency of the buyer or lessee.

Question 14

What is the right to stop delivery of goods in transit?

Answer 14

The right of a seller or lessor to stop delivery of goods in transit if he or she learns of the buyer’s or lessee’s insolvency or if the buyer or lessee repudiates the contract, fails to make payment when due, or gives the seller or lessor some other right to withhold the goods.

Question 15

What is the right to reclaim goods?

Answer 15

The right of a seller or lessor to demand the return of goods from the buyer or lessee under specified situations.

Question 16

What is the right to dispose of goods?

Answer 16

The right of a seller or lessor to dispose of goods in a good faith and commercially reasonable manner. A seller or lessor who is in possession of goods at the time the buyer or lessee breaches or repudiates a contract may in good faith resell, release, or otherwise dispose of the goods in a commercially reasonable manner and recover damages, including incidental damages, from the buyer or lessee.

Question 17

What is the right to recover the purchase price or rent?

Answer 17

The right of a seller or lessor to recover the contracted-for purchase price or rent from the buyer or lessee if the buyer or lessee fails to pay for accepted goods, if the buyer or lessee breaches the contract and the seller or lessor cannot dispose of the goods, or if the goods are damaged or lost after the risk of loss passes to the buyer or lessee.

Question 18

What is the right to recover damages for breach of contract?

Answer 18

The right of a seller or lessor to recover damages measured as the difference between the contract price or rent and the market p[rice at the time and place the goods were to be delivered, plus incidental damages, form a buyer or lessee who repudiates the contract or wrongfully rejects tendered goods.

Question 19

What is a lost volume seller?

Answer 19

A seller who can recover lost profits from defaulting buyer even though the seller sold the item to another buyer, where the seller has other similar items and would have made to sale had the original buyer not defaulted.

Question 20

What is the right to reject nonconforming goods or improperly tendered goods?

Answer 20

The right of a buyer or lessee to reject goods that do not conform to a contract. if the goods to the seller’s or lessor’s tender of delivery fails to conform to the contract, the buyer or lessee may reject the whole, accept the whole, or accept any commercial unit and reject the rest.

Question 21

What is the right to recover goods from an insolvent seller or lessor?

Answer 21

The right of a buyer or lessee who has wholly or partially paid for goods before they are received to recover the goods from a seller or lessor who becomes insolvent within ten days after receiving the first payment; the buyer or lessee must tender the remaining purchase price or rent due under the contract.

Question 22

What is the right to cover?

Answer 22

The right of a buyer or lessee to purchase or lease substitute goods if a seller or lessor fails to make delivery of the goods or repudiates the contract or if the buyer or lessee rightfully rejects the goods or justifiably revokes their acceptance.

Question 23

What is replevin?

Answer 23

An action by a buyer or lessor to recover scarce goods wrongfully withheld by a seller or lessor.

Question 24

What is a buyer’s or lessee’s cancellation?

Answer 24

A buyer’s or lessee’s right to cancel a sales or lease contract if the seller or lessor fails to deliver conforming goods or repudiates the contract or if the buyer or lessee rightfully rejects the goods or justifiably revokes acceptance of the goods.

Question 25

What are damages?

Answer 25

Damages a buyer or lessee recovers from a seller or lessor who fails to deliver the goods or repudiates a contract. Damages are measured as the difference between the contract price (or original rent) and the market price or rent at the same time the buyer or lessee learned of the breach.

Question 26

What is adequate assurance of performance?

Answer 26

Adequate assurance of performance from the other party if there is an indication that a contract will be breached by that party.

Question 27

What is UCC statute of limitations?

Answer 27

A rule which provides that an action for breach of any written or oral sales or lease contract must commence within four years after the cause of action accrues. The parties may agree to reduce the limitations period to one year.

Question 28

What is the UCC statute of limitations?

Answer 28

A rule which provides that an action for breach of any written or oral sales or lease contract must commence within four years after the cause of action accrues. The parties may agree to reduce the limitations period to one year.

Question 29

What is liquidated damages?

Answer 29

Damages that will be paid upon a breach of contract that are established in advance.