Performance & Breach

Question 1

Big Eggs, Inc. agrees to supply Omelet Express with five hundred eggs. Big Eggs cannot reasonably ask Omelet Express to pick up the eggs at

a. 1:00 P.M.
b. 2:00 P.M.
c. 3:00 P.M.
d. 4:30 A.M.

Answer 1

d. 4:30 A.M.

Question 2

Sparkling Gem Corporation agrees to sell Jewel Outlets, Inc. (JOI), fifty new diamonds, but the contract does not specify a place of delivery. JOI is expected to pick up the goods. The place of delivery is

a. Sparkling’s place of business.
b. JOI’s place of business.
c. the Annual Gems and Jewels Convention in New York City.
d. the U.S. Postal Service office nearest to JOI’s place of business.

Answer 2

a. Sparkling’s place of business.

Question 3

Clear Day Company, which is based in Delaware, agrees to sell fifty windows, currently stored in Florida, to Far Vu, Inc., which is based in Hawaii. Absent an agreement to the contrary, the place of deliv¬ery is in

a. California.
b. Delaware.
c. Florida.
d. Hawaii.

Answer 3

c. Florida.

Question 4

Elegant Carpets, Inc., and Fantastic Floors Stores enter into a contract for a sale of carpeting. Under a shipment 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 shipping them.
d. place the goods into the hands of a carrier.

Answer 4

d. place the goods into the hands of a carrier.

Question 5

Office Suppliers, Inc. and Little Office Shop enter into a contract for a sale of office supplies. Office Suppliers is the seller. Under a shipment contract, the Office Suppliers does not have to

a. obtain and promptly deliver or tender to the buyer any documents necessary to enable the buyer to obtain the goods.
b. deliver the goods to a particular destination.
c. put the goods in the hands of the carrier.
d. promptly notify the buyer when the shipment has been made.

Answer 5

b. deliver the goods to a particular destination.

Question 6

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.

Answer 6

b. deliver the goods to a particular destination.

Question 7

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.

Answer 7

c. exactly conform to the contract in every detail.

Question 8

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.

Answer 8

b. can reject the entire shipment.

Question 9

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.

Answer 9

c. exactly conform to the contract in every detail.

Question 10

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.

Answer 10

b. can reject the entire shipment.

Question 11

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.

Answer 11

a. does not apply.

Question 12

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 contain-ers, 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.

Answer 12

c. may reject delivery, and notice to Golden of Food’s intent to cure will give Food a reasonable time to replace the containers.

Question 13

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.

Answer 13

b. until January 15 to cure.

Question 14

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.

Answer 14

a. promptly notify Levi’s Toy Store of the intent to cure.

Question 15

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.

Answer 15

a. may ship the goods to Sally’s using another trucking company with refrigerated trucks.

Question 16

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.

Answer 16

b. is excused from the performance of its contracts.

Question 17

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.

Answer 17

b. does not apply.

Question 18

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.

Answer 18

c. unforeseen.

Question 19

19. 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.

Answer 19

a. demand assurances of performance from Massive.

Question 20

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.

Answer 20

c. may inspect the tires and accept the shipment with a reduction in price.

Question 21

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.

Answer 21

b. May 2.

Question 22

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.

Answer 22

a. anticipatory repudiation.

Question 23

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.

Answer 23

a. await performance, sue Sof’, or suspend its own performance.

Question 24

Loomis Weaving Company contracts to sell sweaters to Style Mart stores. Before the sweat¬ers 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.

Answer 24

a. either after finishing the job (and identifying the goods), or after stopping the job.

Question 25

Double D Ranch and Esau enter into a contract on August 1 for the sale of 200 cattle. Esau cancels the con¬tract ten days later. Double D is unable to sell the cattle to another buyer. Double D is enti¬tled 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.

Answer 25

b. keep the cattle and recover the contract price from Esau.

Question 26

Garden Field Farms and Haute Gourmet Restaurant, Inc., enter into a con-tract for a sale of lettuce before Haute Gourmet declares bankruptcy. Garden Field can stop delivery of the goods in transit

a. only if the quantity is at least a carload.
b. only if the quantity is at least a planeload.
c. only if the quantity is at least a truckload.
d. regardless of the quantity.

Answer 26

d. regardless of the quantity.

Question 27

Ramblin’ Country Stables contracts to buy 1,000 horseshoes from Blacksmith, Inc., for $1 per shoe. When the market price decreases to 50 cents per shoe, Ramblin’ refuses to go through with the deal. Blacksmith can recover

a. $1,500.
b. $1,000.
c. $500.
d. $0.

Answer 27

c. $500.

Question 28

Hi-Tech Company contracts to sell fiber optic cable to Internet Services, Inc. Hi-Tech may bring an action to recover the purchase price and inci-dental damages if Internet

a. accepts the cable and pays for it.
b. accepts the cable but does not pay for it.
c. rejects the cable.
d. revokes acceptance of the cable.

Answer 28

b. accepts the cable but does not pay for it.

Question 29

Text Publishers, Inc., contracts for a sale of textbooks to University Bookstores, Inc. Viable Shipping Corporation, the carrier, transports the books to Warehouse Storage Company. Text’s right to stop delivery is lost when University’s rights to the goods are acknowledged by

a. the appropriate government agency.
b. the students who opt to buy the books.
c. University Bookstores.
d. Warehouse Storage.

Answer 29

d. Warehouse Storage.

Question 30

Noni and Myra enter into a contract for a sale of clarinets and other wind instruments. Noni does not deliver. Myra can normally recover as damages the difference between

a. any loss avoided and any profit gained.
b. the actual price and the hoped-for price.
c. the contract price and the market price.
d. the current prices in the parties’ locations.

Answer 30

c. the contract price and the market price.

Question 31

Bayou Boats, Inc., contracts for the sale of seven swamp boats to Eventide Fishing Tours. Bayou repudiates the contract. Eventide’s recovery is measured at the time

a. Bayou advertised the goods.
b. Eventide ordered the goods.
c. Eventide learned of the breach.
d. Bayou knew that it would repudiate the contract.

Answer 31

c. Eventide learned of the breach.

Question 32

Leatherbound Stores, Inc., rejects a shipment of goods that does not conform to its contract with Cowhide Corporation, but is unable to obtain instructions from the seller. Leatherbound may

a. resell or return the goods only.
b. resell or store the goods only.
c. return or store the goods only.
d. resell, return, or store the goods.

Answer 32

d. resell, return, or store the goods.

Question 33

Natural Foods, Inc., orders “Grade A” oil from Olive Grove Farms to process and sell to Pic ‘N Pay Grocers. Olive Grove ships “Grade B” oil, which Natural Foods accepts. To recover damages for the nonconformity, Natural Foods must give notice of the breach within a reasonable time to

a. Olive Grove only.
b. Olive Grove, Pic ‘N Pay, and the appropriate government agency.
c. Pic ‘N Pay only.
d. the appropriate government agency only.

Answer 33

a. Olive Grove only.

Question 34

Summer Breeze, Inc., contracts for the sale of fifty ceiling fans to Island Décor store. If Summer Breeze fails to deliver the goods, Island Décor must commence a suit for breach of contract within

a. four years.
b. not more than one year.
c. not less than four years.
d. thirty days.

Answer 34

a. four years.

Question 35

BBQ, Inc., makes and sells grills to Grill Mart, a retailer, which sells one of the grills to Hope, a consumer. BBQ and Grill Mart include in their contracts a limitation on consequential damages for personal inju¬ries arising from a breach of warranty. This is prima facie un¬conscionable with respect to

a. all of these parties.
b. BBQ and Grill Mart, but not Hope.
c. Hope only.
d. none of these parties.

Answer 35

c. Hope only.