Performance

Question 1

Green has contracted to purchase 100 cartons of “deluxe” quality stationery paper identified as U23 from ABC Paper. Green had considered buying stationery paper identified as U2, which is slightly below the quality of U23, from ABC. ABC, by mistake, ships 100 cartons of U2 stationery paper to Green. The cartons arrive. Green pays ABC the purchase price and starts using the stationery. Green, two days later, on inspection discovers the delivered stationery is slightly below quality. Which of the following is correct?

A. Payment by Green is in and of itself acceptance of the U2 stationery.

B. Possession and use of the stationery is acceptance of the U2 stationery.

C. Failure to inspect upon delivery is acceptance of the U2 stationery.

D. Failure of Green to reject after inspection would constitute acceptance.

Answer 1

D. Failure of Green to reject after inspection would constitute acceptance.

Failure of a buyer to reject after inspection of the goods and discovery of the nonconforming shipment is considered to be an acceptance of the goods.

Wrong answer

B. Possession and use of the stationery is acceptance of the U2 stationery.

Possession and use without knowledge of the nonconforming goods (only a slight difference between U23 and U2) is not an acceptance

Question 2

Rowe Corp. purchased goods from Stair Co. that were shipped C.O.D. (cash on delivery). Under the Sales Article of the UCC, which of the following rights does Rowe have?
A. The right to inspect the goods before paying.

B. The right to possession of the goods before paying.

C. The right to reject nonconforming goods.

D. The right to delay payment for a reasonable period of time.

Answer 2

C. The right to reject nonconforming goods.

A C.O.D. (cash on delivery) contract does not permit inspection before payment is made. However, if the goods turn out not be nonconforming, they may later be rejected by the buyer.

Wrong
A. The right to inspect the goods before paying.
A C.O.D. (cash on delivery) contract does not permit inspection before payment is made. However, if the goods turn out to be nonconforming, they may later be rejected by the buyer.