Quiz 2 Questions Flashcards
Curious Liquids signed a contract to sell Pemulis Auto its requirements of motor oil for the year, in monthly shipments at a price of $5 per quart. Pemulis Auto usually needed about 3,000 quarts per month. After fracking-related earthquakes shut down production of many wells, motor oil prices spiked. Pemulis Auto signed another contract to sell Josephson Jobber 100,000 quarts at $10 per quart. Pemulis Auto then informed Curious Liquids that the requirement for the next month would be 103,000 quarts. Is Curious Liquids obliged to deliver 103,000 quarts next month, which would be ruinous for it?
A = No. Pemulis Auto is entitled only to its good faith, actual requirement. Its demand is not good faith or its actual requirement.
On June 1, Pemulis Auto signed a contract to sell Redford a “2016 Model Excalibur Hardtop” automobile. A week later, Pemulis Auto received three 2016 Model Excalibur Hardtops from the manufacturer. Two days after that, Pemulis Auto placed a sticker on one of the three cars, designating it for delivery to Redford. On July 1, Redford tendered payment, Pemulis Auto signed the certificate of title and handed over the keys, and Redford drove away. When were goods identified to the contract?
A = When Pemulis Auto put a sticker on one of the cars.
Word got around that Pemulis Auto had some 2016 Model Excalibur Hardtops in stock. Pompeia soon made a contract with Pemulis Auto to buy one as her retirement present to herself. Pompeia wired the full payment, and Pemulis Auto parked one of the cars to deliver to her the next day. It was stolen overnight. Is Pompeia entitled to either get her payment back or a different car delivered?
A = Yes. The risk of loss would not pass to her until delivery, which did not occur.
Blackhorse Goods signed a contract to sell 100 washing machines to Otto Automats. The washing machines were stored in a warehouse. Blackhorse Goods negotiated the warehouse receipt to Otto Automats, who promised to pay the contract price in 30 days. Before that time, the warehouse was destroyed by a fire, through no fault of the warehouse operator. Is Otto Automats obliged to pay for washing machines that are now scrap?
A = Yes. The risk of loss of the goods passed to Otto Automats with the warehouse receipt.
Obergefell Furniture, in Boston, MA, entered into a contract with Unterwasser Healthcare, in Charleston, S.C., for the sale of medical devices, to be delivered by a trucking company. In which case would the risk of loss pass from the seller to the buyer when the goods were tendered to the carrier?
A = ALL THE ABOVE
- If the parties did not specifically address the issue in the contract.
- If they used the shipping term “C.I.F. Charleston.”
- If the used the shipping term “F.O.B. Boston.”
Bruce Banner gets a loan for his biotech business, putting up as collateral his precision scientific instruments. What category of collateral are the instruments?
A = Equipment
Seller, a fisherman, contracts to sell his entire catch for the coming season. Does identification occur on the making of the contract, on the catching of the fish, or on their packaging with a label indicating they belong to this particular buyer?
Answer = when they are marked/otherwise designated by the seller as goods to which the K refers aka the packing with label indicating belong to the buyer
Three Ring Circus contracted to sell the unborn calf of the circus’s elephant Nancy as soon as the calf was born; the contract was made when Nancy was two months pregnant. Does the identification occur on the date of contracting, on the calf’s birth, or when the calf is marked for shipment?
A = When the calf is marked for shipment because an elephant is pregnant for 18-22 months and therefore does not fit within paragraph 3 of 12 months
Farmer Carl agreed to sell to Breakfast Cereals, Inc. one-half of the grain he had stored in Rural Silo, where Farmer Carl’s grain was mixed with that of other farmers. Does identification occur on contracting or on segregation of the grain?
Answer = On contracting
Wonder Widgets contracted to sell 5,000 widgets to a buyer. Its warehouse contained 2 million widgets, all alike. Does identification occur on contracting or when the goods are picked out and marked as pertaining to this contract?
Answer = on contracting
Laputa agreed to sell its wrecked helicopter to Sheeta, and agreed to repair it extensively before delivery. After Sheeta paid the contract price but before Laputa did any repairs, Laputa filed bankruptcy. When would the helicopter be identified to the contract: at the time of contracting (meaning title would pass to Sheeta) or not until the helicopter was repaired (meaning
Answer = at time of contracting
