Chapter 18: "Performance and Breach of Sales and Lease Contracts"

Question 1

The perfect tender rule of the UCC generally requires that the seller:

a. deliver or hold at the buyer's disposal goods that conform to the contract's terms in every respect.	
b. be a good faith dealer when negotiating a sale of goods and performing delivery.	
c. reclaim the goods at any time before payment.

Answer 1

a. deliver or hold at the buyer’s disposal goods that conform to the contract’s terms in every respect.

Question 2

Sonja visits Maurice’s Rare Plants store, selects five bonsai trees, and agrees to buy them. While Maurice is in the process of packing the trees for delivery, lightening strikes the greenhouse and destroys them. With respect to the contract,

a. Maurice and Sonja must share the loss.	
b. Maurice and Sonja are excused from performance.	
c. Maurice must replace the lost bonsai trees that Sonja agreed to purchase.

Answer 2

Maurice and Sonja are excused from performance.

Question 3

Denise agrees to buy a large armchair from Diego’s store. Diego offers free delivery, but Denise fails to tell him when to deliver. For three months Diego asks when he can deliver, but receives no response. Diego finally leaves the armchair on Denise’s front porch. Unbeknownst to Diego, Denise is away on vacation, and a rainstorm ruins the armchair. Diego is:

a. liable because the tender was not conforming.	
b. not liable, because Denise breached the good faith duty of cooperation.	
c. not liable, because Diego created an adhesion contract.

Answer 3

b. not liable, because Denise breached the good faith duty of cooperation.

Question 4

In the absence of any specific agreements, the buyer must make payment at the time and place the contract is signed.

a. True
b. False

Answer 4

b. False

Question 5

An anticipatory repudiation occurs when:

a. the buyer breaches after tender of full payment.	
b. the seller breaches after a nonconforming tender.	
c. one party communicates to the other an intention not to perform.	
d. the seller breaches after a conforming tender of the entire sale.

Answer 5

c. one party communicates to the other an intention not to perform.

Question 6

Under what circumstances can there be NO retraction of anticipatory repudiation?

a. When the other party has sent an e-mail indicating that any delay is acceptable.	
b. When, since the time of repudiation, the other party has materially changed position.	
c. When the other party has not reacted.	 Hide Feedback

Answer 6

b. When, since the time of repudiation, the other party has materially changed position.

Question 7

Camille asks Geraldo to deliver four rose bushes from his nursery to her house. He does so and she plants them. After several weeks she still has not paid for them, Camille has:

a. made a partial rejection of the rose bushes.	
b. exceeded the statute of limitations.	
c. accepted the rose bushes.	
d. made a full rejection of the rose bushes.

Answer 7

Camille has accepted the rose bushes. After several weeks, she could have rejected all or part of the tender if she was not satisfied. If a buyer has an opportunity to inspect goods and has failed to reject them within a reasonable time, acceptance is presumed.

Question 8

Letter of credit

Answer 8

A written instrument, usually issued by a bank on behalf of a customer or other person, in which the issuer promises to honor drafts or other demands for payment by third persons in accordance with the terms of the instrument.

Question 9

Replevin

Answer 9

An action to recover specific goods in the hands of a party who is wrongfully withholding them from the other party.

Question 10

When the goods delivered are not as promised, the measure of damages equals:

a. the difference between the value of the goods as advertised and the value of the goods available from a competitor.	
b. the difference between the value of the goods as accepted and their value in the future.	
c. the difference between the value of the goods as accepted and their value if they had been delivered as warranted.

Answer 10

c. the difference between the value of the goods as accepted and their value if they had been delivered as warranted.

Question 11

An action for a breach of contract under the UCC must be commenced within ** years after the cause of action accrues.

Answer 11

4

Question 12

The measure of damages under the Convention on Contracts for the International Sale of Goods (CISG) normally is:

a. the difference between the contract price and the market price.	
b. the cost of specific determination.	
c. lost profits, plus ten percent.

Answer 12

a. the difference between the contract price and the market price.