CONTRACTS 09

Question 1

Obligation

Answer 1

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

Question 2

Breach

Answer 2

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

Question 3

Tender of Delivery

Answer 3

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

Question 4

Shipment Contract

Answer 4

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

Question 5

Destination Contract

Answer 5

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

Question 6

Perfect Tender Rule

Answer 6

A rule that says if the good or tender of a delivery fail in any respect to conform to the contract, the buyer may opt either 1. to reject the whole shipment, to accept the whole shipment, or to reject part and accept part of the shipment.

Question 7

Cure

Answer 7

An opportunity to repair or replace defective or nonconforming goods.

Question 8

Installment Contract

Answer 8

A contract that requires or authorizes good to be delivered and accepted in separarte lots.

Question 9

C.O.D. shipment

Answer 9

A type of shipment contract in which the buyer agrees to pay the shipper cash upon the delivery of the goods.

Question 10

Acceptance

Answer 10

An act that occurs when a buyer or lessee takes any of the following actions after a reasonable opportunity to inspect the goods: signifies to the seller or lessor in words of 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 if a buyer acts inconsistently with the seller’s ownership rights in the goods.

Question 11

Revocation of Acceptance

Answer 11

Reversal of acceptance.

Question 12

Right to Withhold Delivery

Answer 12

A seller’s or lessor’s right 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 13

Right to Stop Delivery of Goods in Transit

Answer 13

The right of the seller or lessor to stop delivery of goods in transit if 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 14

Right to Reclaim Goods

Answer 14

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

Question 15

Right to Dispose of Goods

Answer 15

The right to dispose of good 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 16

Incidental Damages

Answer 16

Reasonable expenses incurred in stopping delivery, transportation charges, sales commissions and so on.

Question 17

Right to Recover the Purchase Price or Rent

Answer 17

A seller’s or lessor’s right 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

Right to Recover Damages for Breach of Contract

Answer 18

A seller’s or lessor’s right to recover damages measured as the difference between the contract price (or rent) and the market price (or rent) at the time and place the goods were to be delivered, plus incidental damages, from a buyer or lessee who repudiates the contract or wrongfully rejects tendered goods.

Question 19

Seller’s of Lessor’s Cancellation

Answer 19

A seller or lessor has the right to cancel a sales or lease contract if the buyer or lessee rejects or revokes acceptance of the goods, fails to pay for the goods, or repudiates the contract in part or in whole.

Question 20

Right to reject nonconforming goods or Improperly tendered goods

Answer 20

A situation in which a buyer or lessee rejects goods that do not conform to the contract. If the goods or the seller’s or lessor’s tender of delivery failes 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

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 recover the goods from a seller or lessor who becomes insolvent within 10 days after recieveing the first payment; the buyer or lessee must tender the remaining purchase price or rent due under the contract.

Question 22

Specific Performance

Answer 22

A decree of the court that orders a seller or lessor to perform his or her obligations under the contract; usually occurs when the goods in question are unique, such as art or antiques.

Question 23

Right to Cover

Answer 23

The right of a buyer or lessee to purchase or lese 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 24

Replevin

Answer 24

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

Question 25

Buyer’s or Lessee’s Cancellation

Answer 25

A buyer or lessee has the 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 26

Damages

Answer 26

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

Question 27

Adequate Assurance of Performance

Answer 27

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

Question 28

Anticipatory Repudiation

Answer 28

The repudiation of a sales or lease contract by one of the parties prior to the date set for performance.

Question 29

UCC Statute of Limitations

Answer 29

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

Question 30

Liquidated Damages

Answer 30

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