Warranties

Question 1

True/False: A buyer has an absolute right to reject goods as long as the rejection is timely.

Answer 1

False

Question 2

True/False: Tender means to physically deliver the goods to the buyer.

Answer 2

False

Question 3

True/False: Under the “perfect tender rule” the buyer may reject the goods if they fail in any respect to conform to the contract.

Answer 3

True

Question 4

True/False: The common law requirement that the seller make a tender of delivery that conforms in all respects to the contract requirements was retained by drafters of the UCC, although the Code includes sections that limit the rule’s effect.

Answer 4

True

Question 5

True/False: A seller may not make minor necessary repairs or adjustments that will bring the goods into conformity in order to “cure” nonconforming goods.

Answer 5

False

Question 6

True/False: Wimble ordered $800 worth of pro-quality luminescent orange tennis balls from Sports Unlimited. On June 1, Sports Unlimited shipped standard white tennis balls that were rejected by Wimble. Wimble bought the same number of pro-quality luminescent orange balls from another supplier the same day for $550. In a suit against Sports Unlimited, Wimble may recover $800.

Answer 6

False

Question 7

True/False: In some industries it is routine practice to draft contracts permitting imperfection in the seller’s goods, thereby limiting the effect of the perfect tender rule by the parties’ agreement.

Answer 7

True

Question 8

True/False: “Course of dealing” refers to prior commercial transactions between the same parties.

Answer 8

True

Question 9

True/False: A homeowner has a contract with a firewood supplier to bring a rick of hardwood at the beginning of each month from October through March. If, for the first three deliveries, the supplier has brought a mixture of hard and soft woods, the homeowner cannot reject a delivery in January because it includes some soft wood.

Answer 9

True

Question 10

True/False: A buyer who accepts nonconforming goods may revoke the acceptance under limited circumstances.

Answer 10

True

Question 11

True/False: In the Zion Temple First Pentecostal Church of Cincinnati, Ohio, Inc. v. Brighter Day Bookstore & Gifts case, the court found that, because of an error in the catalog, there was no right to cure a nonconformity with the sleeves of the robes.

Answer 11

False

Question 12

True/False: Liquidated damages are never permitted under the UCC.

Answer 12

False

Question 13

True/False: If Chuck buys cheese from Cheese Inc., then fails to inspect the cheese within a reasonable amount of time and does not reject the shipment, Chuck has accepted the shipment even if there is non-conformity.

Answer 13

True

Question 14

True/False: A buyer’s material breach gives the seller the right to refuse to deliver the goods.

Answer 14

True

Question 15

True/False: Matson agrees to purchase 500 wooden chairs from Woodcarvers, Inc. After Woodcarvers sets the chairs aside in its warehouse, but before the risk of loss passes to Matson, the chairs are destroyed in a fire, which was not the fault of Woodcarvers. The contract between Matson and Woodcarvers is void.

Answer 15

True

Question 16

The duties of the buyer include all of the following except:

Answer 16

delivery of the documents of title to the seller as a tender of goods.

Question 17

Under the UCC, the seller’s right to correct a shipment of non-conforming goods is called:

Answer 17

cure.

Question 18

Bryson Hardware accepted delivery of the 50 door handles it ordered. If it later finds the handles do not conform to the contract specifications, it may return the goods only if:

Answer 18

it shows that the defects substantially impair their value.

Question 19

If a buyer does not receive goods by the contract deadline, remedies available include:

Answer 19

All of the above.

Question 20

Meister Bros. shipped 250 radiator belts to fill Braybon’s order. Quality control measures had been in place in Meister’s factory when the belts were manufactured. When Braybon received the order one day before it was due, it notified Meister that it rejected the belts because of a variation from the contract specifications. Meister, although it believed the original belts met the contract specifications, notified Braybon that it would supply conforming goods within one week. When the conforming goods arrive in one week:

Answer 20

Braybon should accept them because Meister Bros. has a right to cure even after the contract deadline under these circumstances.

Question 21

A buyer who accepts goods but notifies the seller the goods are non-conforming:

Answer 21

can recover the difference between the goods as promised and as delivered, plus incidental and consequential damages.

Question 22

A baseball team ordered 500 wooden baseball bats from Bats, Inc., for delivery on June 1. On May 15, the ball team received 500 aluminum bats on the contract. As of May 16, Bats:

Answer 22

may cure before June 1.

Question 23

Family Time Restaurant has a contract with Prime Meats for Prime to deliver 100 pounds of ground sirloin twice a week for the next three months. If, on one delivery, Prime brings 95 pounds of ground chuck instead of 100 pounds of ground sirloin:

Answer 23

Family Time may reject the non-conforming installment only if it substantially impairs the value of that installment and cannot be cured.

Question 24

The UCC “perfect tender” provision provides:

Answer 24

the buyer can reject the entire shipment if any portion of the goods are nonconforming.

Question 25

A buyer who properly rejects goods:

Answer 25

must notify the seller of the rejection within a reasonable time.

Question 26

Precision had a contract to supply Higgins, Co. with 500 medical instruments for delivery in three months. Several weeks later Higgins reads in the Wall Street Journal that Precision has been sued for selling defective instruments. Higgins could:

Answer 26

require written assurances from Precision.

Question 27

A buyer who is unable to obtain cover:

Answer 27

may be allowed the remedy of specific performance.

Question 28

If a contract does not provide for a time for inspection, the UCC allows inspection:

Answer 28

in a reasonable time.

Question 29

If a seller cures within a reasonable amount of time, the contract:

Answer 29

has been performed.

Question 30

Neon orders one thousand 25-foot nylon ropes from Hang’em High Co. Upon inspection of the delivery, Neon learns that Hang’em sent five hundred 25-foot ropes and five hundred 20-foot ropes. Neon may:

Answer 30

accept the 500 conforming ropes and reject the 500 nonconforming ropes.

Question 31

A buyer may revoke an acceptance of goods if:

Answer 31

the buyer had a legitimate reason for the initial acceptance.

Question 32

When a party to a contract notifies the other party that it will not perform the contract as agreed, this conduct is referred to as:

Answer 32

repudiation.

Question 33

Which of the following statements is not true regarding the buyer’s right to cover?

Answer 33

The buyer must cover.

Question 34

Master Glue Hairspray, Inc. contracts to purchase 100 umbrellas with its logo and slogan, “A spray a day keeps the rain and wind away!” specially printed on the umbrellas and its 1-800 telephone number on the umbrella handle. After the seller completes the order, Master Glue refuses to accept or pay for the umbrellas. Because of the special logo and telephone number, the seller has been unable to find a new buyer. If the seller sues Master Glue, what is the proper measure of the seller’s damages?

Answer 34

Contract price.

Question 35

Under the doctrine of commercial impracticability, which situation would not excuse the seller’s performance?

Answer 35

The seller forgot to include the cost of freight in a C&F contract.

Question 36

Assume that Sherrie’s Cherries contracts with Dessert World to sell and ship 600 pounds of cherries in three equal installments of 200 pounds each. If the first installment arrives with 5 pounds of spoilage, then Dessert World may:

Answer 36

not reject the installment if those in the food industry expect a small percentage of spoilage with fresh fruits or vegetables.

Question 37

Reba orders a pair of custom-made cowboy boots, C.O.D. from Home on the Range Western Wear. When the boots arrive, Reba pays the carrier for the boots, then opens the package, only to discover that the boots are the wrong snake skin color and three sizes too big. At this point:

Answer 37

she is entitled to inspect the goods after payment (due to the C.O.D. terms) and she can reject the boots because they are nonconforming.

Question 38

The Code’s requirement of good faith in the performance and enforcement of every contract imposes:

Answer 38

a greater duty on merchants than consumers.

Question 39

Buyer Bob breaches his contract for the sale of goods with Seller Suzie. Suzie still has possession of the goods at the time of the breach. Suzie can refuse to deliver the goods and:

Answer 39

resell the goods and sue for any loss on the sale plus incidental damages less expenses saved.

Question 40

Turtle World orders 200 small sea turtles from Reptile World. After the sea turtles had been identified to the contract but before the risk of loss had passed to Turtle World, the turtles were released into the ocean by a militant animal rights group who broke into Reptile World to set the animals free. Under this scenario:

Answer 40

Turtle World cannot successfully sue because the contract is void.