Q&A Hero

Q: List a few scenarios under which sellers may be excused from performing contractual obligations.

Q: General contract law uses the test of _____ for determining when a person is excused from performing contractual obligations. A. commercial impracticability B. superior knowledge C. frustration of purpose D. impossibility

Q: In most situations, the UCC uses the test of _____ for determining when a person is excused from performing contractual obligations. A. commercial impracticability B. superior knowledge C. frustration of purpose D. impossibility

Q: The goods required for the performance of a contract are destroyed without fault of either party prior to the time that the risk of loss passed to the buyer. In this case, A. the contract cannot be cancelled. B. the contract is voided. C. the seller will not be excused. D. the seller has to make good for the loss.

Q: If unforeseen conditions cause a partial inability to make delivery of the goods and thus make performance impracticable, then: A. the seller is readily excused from making delivery. B. the seller can unilaterally annul the contract. C. the seller must allocate production in any fair and reasonable manner among his customers. D. the buyer is required to fully take the risk of loss.

Q: Explain the term usage of trade. What happens if there is a conflict between the express terms of the contract and trade usage?

Q: A buyer who is not a merchant rejects nonconforming goods that are not perishable. He: A. may destroy the goods. B. must sell the goods for the seller. C. must hold the goods till the seller is willing to take them back. D. need not return the goods to the seller.

Q: Under the UCC section 2-612 what may the seller offer to do if the goods shipped were rejected due to nonconformity? A. Replace the defective goods B. Seek commercial arbitration of the dispute C. Charge the buyer for the shipping and cost of remaking the goods D. Refuse to take the defective goods back

Q: After entering into a contract, a buyer becomes concerned that the other party may not be able to perform his contract obligations. The buyer demands assurance from the other party that the contract will be performed. What is the maximum time period that the buyer would have to wait before considering the other party has repudiated the contract? A. 90 days B. 10 days C. 30 days D. 365 days

Q: If the party who repudiated the contract changes his mind, the repudiation can be withdrawn: A. before the other party has cancelled the contract. B. after the other party has materially changed position. C. at any point in time. D. even if the contract has been cancelled.

Q: If one party has concerns about another party and seeks assurances under the UCC to the sales contract, how long does the other have to respond before the contract is considered repudiated? A. 180 days B. 14 days C. 30 days D. 90 days

Q: Which of the following should a buyer who is a merchant do if the rejected goods are perishable? A. The buyer must make a reasonable effort to sell the goods. B. The buyer should store the goods for the seller. C. The buyer should reship them to the seller. D. The buyer should immediately make the payment.

Q: A buyer who is not a merchant rejects nonconforming goods. He: A. must return the goods to the seller. B. must sell the goods for the seller. C. must hold the goods for the seller for a reasonable time. D. may destroy the goods.

Q: If a buyer has a basis for rejecting a delivery of goods, the buyer: A. should not ask the seller to reship conforming goods. B. will still be liable to the seller for breach of the sales contract. C. need not give the seller notice of the rejection. D. must act within a reasonable time after delivery.

Q: Where the goods are to be delivered in installments, an installment delivery may be rejected only if the nonconformity substantially affects the value of that delivery and: A. if payment is to be made as per the contract price. B. if the nonconformity cannot be corrected by the seller. C. if the buyer accepted the goods with full knowledge of the nonconformity. D. if payment has already been made.

Q: In which of the following situations can a buyer revoke acceptance of nonconforming goods? A. The buyer accepted them with the knowledge of the nonconformity, because they were the only option available in the market. B. The buyer accepted the goods because of the seller's assurances that it would cure the defect. C. The price of the goods fell in the general market. D. The buyer accepted the nonconforming goods because the seller couldn't cure the defect.

Q: In which of the following situations can a buyer revoke acceptance of nonconforming goods? A. The buyer accepted them without knowledge of the nonconformity because of the difficulty of discovering the nonconformity. B. The buyer accepted them with the knowledge of the nonconformity, because they were the only option available in the market. C. The price of the goods fell in the general market. D. The buyer accepted the nonconforming goods because the seller couldn't cure the defect.

Q: Which of the following is not an option for the buyer if the goods delivered by the seller do not conform to the contract? A. Reject all of the goods B. Accept all of them C. Accept only part of a commercial unit and reject the rest D. Accept any commercial units and reject the rest

Q: Which of the following can a buyer do if the goods delivered by the seller do not conform to the contract? A. Accept only part of a commercial unit and reject the rest B. Accept all of them but not make the payment C. Accept a commercial unit and withhold payment for the accepted portion D. Accept any commercial units and reject the rest

Q: Bobby goes to buy a CD player from Sammy's Electronics. In testing one model, Bobby notices that the "scan" function does not allow scanning once a selection from a CD is playing. Bobby purchases the model despite this without mentioning the defect to Sammy. Bobby takes the CD player to his office where he uses it for three months before deciding that he wants to return it. Under these circumstances: A. Bobby has rejected the CD player. B. Bobby has accepted the CD player. C. if Bobby informs Sammy of the defect now, he can reject the CD player. D. a court will not consider Bobby to have accepted the CD player because it is defective.

Q: Section 2-608 of the UCC governs gives the buyer what right in sales contracts? A. The right to revoke a sales contract within a reasonable period for nonconformity B. The right to accept fewer units from the seller in order to make the agreement profitable C. The right to place sales agreement on hold till new credit can be obtained D. The right to pay less that agreed upon price if the agreement is not profitable

Q: Bob contracts to sell Ben 15 bales of hay. A bale is the accepted commercial unit in hay transactions. Ben accepts only 9 1/5 of the 20 bales. Under the UCC, Ben is considered to have accepted: A. all 20 bales. B. 10 bales. C. 9 bales. D. nothing.

Q: Bob contracts to sell Ben 15 bales of hay at $10 per bale. A bale is the accepted commercial unit in hay transactions. Ben accepts only 9 1/5 of the 20 bales. Ben will have to pay _____. A. $100 B. $95 C. $150 D. $15

Q: In which of the following situations can a buyer revoke acceptance of nonconforming goods? A. The buyer accepted them with the knowledge of the nonconformity, because they were the only option available in the market. B. The buyer accepted the nonconforming goods because the seller couldn't cure the defect. C. The price of the goods fell in the general market. D. The nonconformity substantially impaired the value of the goods.

Q: UCC section 2-301 outlines what basic duty of the buyer? A. To pay a price on the goods that gives seller a profit B. To designate an agent in each state the buyer operates C. To accept and pay for goods shipped by the seller D. To be honest to creditors regarding the sales contract

Q: Which of the following occurs when a buyer, after having a reasonable opportunity to inspect them, either indicates that he will take them or fails to reject them? A. Rejection of goods B. Assignment of goods C. Revocation of rights D. Acceptance of goods

Q: Which instrument enables the seller's bank to just act as an agent for collection of the due amount from the buyer? A. Confirmed letter of credit B. Advised letter of credit C. Negotiable bill of lading D. Draft

Q: Under a(n) _____, the seller's bank agrees to assume liability on the letter of credit. A. confirmed letter of credit B. advised letter of credit C. negotiable bill of lading D. revocable letter of credit

Q: A buyer makes payment for goods accepted using a check. If the bank refuses to pay the check, the buyer: A. has still satisfied the duty to pay for the goods. B. must give the goods back to the seller. C. has the right to retain the goods. D. can be excused from the obligation.

Q: If the goods are covered by a negotiable warehouse receipt, then the: A. seller must notify the bailee about the buyer. B. seller must endorse the receipt and give it to the buyer. C. seller must obtain bailee's consent before selling his goods. D. seller must release the goods to the buyer.

Q: If the shipping terms are cash on delivery (COD), then the buyer: A. need not pay for the goods if inspection is not allowed. B. must pay for the goods if it is obvious without inspection that the goods do not conform to the contract. C. must pay the expenses of inspection if the goods do not conform to the contract. D. must pay for the goods before inspecting them unless they are marked "Inspection Allowed."

Q: If all or part of the price of goods is payable in real property, then: A. only the transfer of goods is covered by the law of sales of goods. B. both the transfer of goods and the real property is covered by the law of real property. C. both the transfer of goods and the real property is covered by the law of sales of goods. D. only the transfer of the real property is covered by the law of real property.

Q: The buyer usually can inspect goods before payment except: A. where payment is made by check. B. when the goods are perishable. C. where the goods are shipped COD. D. when the buyer pays in a foreign currency.

Q: If no agreement is made on the place where the goods will be delivered, then the goods are to be delivered at: A. a neutral location. B. the buyer's place of business. C. the buyer's warehouse. D. the seller's place of business.

Q: Pam enters into a contract with Jack to sell him 300 bales of hay. The bushels are kept in her warehouse, which is about 100 miles away from her place of business. The contract makes no express mention of the place of delivery. The place of delivery in such cases is: A. Pam's place of business. B. Pam's house. C. Pam's warehouse. D. Jack's house.

Q: What does tender of delivery mean? A. The seller must make the goods available to the buyer. B. The buyer must accept and pay for the goods if they conform to the contract. C. Where delivery is to be made in lots, the seller can demand the price of each lot upon delivery. D. The goods are to be delivered at the buyer's place of business.

Q: Is it possible for a party that has waived rights to a portion of the contract not yet performed to retract the waiver? Why? A. Yes. The party will be able to immediately assert the late payments as grounds for later canceling the contract. B. Yes. The party can give reasonable notice to the other party that strict performance will be required. C. No. Once a party has waived rights to a portion of the contract, it will not be able to assert this as grounds for later canceling the contract. D. Yes. The contract is assumed to be made in good faith.

Q: Which of the following observations is true under the UCC? A. Consideration is not required to support a modification of a contract for the sale of goods. B. If there is a conflict between the express terms of the contract and trade usage, the trade usage will prevail. C. The buyer or the seller cannot delegate their duties to someone else under any circumstance. D. The UCC does not alter the basic contract law when applied to performance of contracts.

Q: UCC section 1-203 makes what form of requirement on the buyer and seller? A. Both must act in good faith B. Both must have signed the sales agreement C. Both buyer and seller must be residents of same state D. Both must have placed a security interest down on the contract

Q: Pete contracts to sell Jill 100 widgets. The 100 widgets are located at Pete's business. The contract does not state a place of delivery. The place of delivery is: A. Jill's place of business. B. Jill's home. C. Pete's place of business. D. Pete's home, if this is different from his place of business.

Q: If there is a conflict between the express terms of the contract and the past course of dealing between the parties, the: A. past course of dealing between the parties will prevail. B. express terms of the contract prevail. C. contract is voided. D. seller is excused.

Q: Customs and practices of the business that are known by people in the business and that are usually assumed by parties to a contract for goods of that type are known as _____. A. usage of trade B. warranties C. courses of action D. fair norms

Q: If there is a conflict between the express terms of the contract and trade usage, the: A. past course of dealing between the parties will prevail. B. seller is excused. C. contract is voided. D. express terms of the contract prevail.

Q: Sam agrees to make partial deliveries of goods over three months to Winston. The first delivery was late by two weeks. Why should Winston object to this late delivery? A. Winston may be required to pay in advance for future deliveries. B. Winston may waive his rights to cancel the contract if other deliveries are late. C. Sam may cancel the contract. D. Sam may be excused from performing all his contractual obligations.

Q: Johnny LaRue sells men's jackets to men's clothing stores, including Melonville Man. Melonville Man orders a selection of men's jackets from LaRue's catalog, asking that LaRue select an assortment of goods for the buyer. LaRue takes advantage of this opportunity to get rid of the odd-sized jackets and those in pastel colors that are no longer popular. LaRue: A. has stuck to the express terms of the sales contract. B. has violated the good faith requirement under sales contracts. C. has followed the usual trade practice. D. has properly modified the contract.

Q: If the goods required for the performance of a contract are destroyed without fault of either party prior to the time that the risk of loss passed to the buyer, the contract is voided.

Q: Which of the following is defined to mean "honesty in fact" in performing the duties assumed in the contract or in carrying out the transaction? A. Course of dealing B. Usage of trade C. Caveat emptor D. Good faith

Q: In the case of a merchant, _____ means honesty in fact as well as the observance of reasonable commercial standards of fair dealing in the trade. A. course of dealing B. usage of trade C. good faith D. caveat emptor

Q: If the buyer is not a merchant, then her obligation after rejection is limited to returning the goods to the seller.

Q: If a buyer has a basis for rejecting a delivery of goods then the buyer can act whenever the buyer wishes to reject the goods after the delivery.

Q: A party can withdraw repudiation before the other party has cancelled the contract or has materially changed position by clearly indicating that the person intends to perform his obligations.

Q: Anticipatory repudiation is disallowed under the UCC.

Q: Generally, the UCC uses the test of impossibility to determine if a person can be excused from performing his contractual obligations.

Q: If a buyer treats goods shipped to him/her as though he owns them then the UCC considers the buyer to have accepted the goods.

Q: Acceptance of shipped goods happens according to the UCC before the buyer inspects the commercial goods.

Q: If the goods delivered by the seller do not conform to the contract, the buyer need not pay for the units accepted at the price per unit provided in the contract.

Q: The buyer may reject an installment delivery only if the nonconformity substantially affects the value of that delivery and cannot be corrected by the seller in a timely fashion.

Q: If the seller demands cash, the seller must give the buyer a reasonable amount of time to obtain it.

Q: If no agreement is made between a buyer and seller on inspection then the UCC indicates that a buyer may inspect the goods at any time the buyer choses as long as it is reasonable.

Q: If a buyer accepts a part of a commercial unit of goods, he is considered to have accepted only that part of the unit.

Q: Once a buyer has accepted goods, he cannot later reject them unless at the time they were accepted, the buyer had reason to believe that the nonconformity would be cured.

Q: If there is a conflict between the express terms of the contract and the past course of dealing between the parties, the express terms of the contract prevail.

Q: Under the Code, consideration is required to support a modification or rescission of a contract for the sale of goods.

Q: The UCC defines good faith in commercial transactions as observance of reasonable standards for fair dealing.

Q: If no agreement is made regarding the place of delivery, then the goods are to be delivered at the seller's place of business.

Q: If the seller does not make a reasonable contract for delivery or notify the buyer and a material delay or loss results, the buyer has the right to reject the shipment.

Q: A statement in an advertisement can sometimes be considered an "express warranty."

Q: Jones purchased a second hand car from Ralph with an assurance of no problems in the car. Jones will succeed in his claim under express warranty.

Q: In order to be liable under the implied warranty of merchantability, a seller must be a merchant.

Q: An implied warranty is created rather than stated by the parties or written in a contract.

Q: The Uniform Commercial Code gives the contracting parties very little flexibility in deciding between themselves how they will perform a contract.

Q: Delbert Cars sells Jim a nice new model. Unfortunately for Jim, a defect in the car's brakes causes them to fail; in turn causing an accident that totals the car and puts Jim in the hospital. Jim sues (among others) Delbert, arguing that Delbert was negligent in failing to inspect the brakes for defects. All Delbert did was to drive the car around the block to see if it ran as it should. Under what conditions might Delbert be liable here? Under what conditions will it escape liability?

Q: Toyota Automobiles launches a new model of SUV. The design of the car was such that the vehicle had a very broad rear. This posed a problem of parking the vehicle in the regular parking space. Adams, the owner of the SUV, had parked his car on one side of the road. Since the vehicle's rear was protruding onto the road, it was hit by a truck and was damaged. Under these circumstances, can Adams sue Toyota for defective design? Are there any remedies for him to recover?

Q: Joe buys a bottle of Coca-Cola. When Joe spots a needle inside the bottle, his buddies dare him to drink the coke. After doing so, Joe suffers physical injury as the needle sticks in his throat. Joe sues Coke under section 402A; Coke defends by arguing assumption of risk on Joe's part. Transylvania, however, has eliminated assumption of risk as a separate defense in product liability cases. Instead, it has a comparative fault statute just like the statute in the Jimenez case in the text. Under that statute, what is the result of Joe's lawsuit and why? Assume that Coke would be liable under section 402A.

Q: A description that gives rise to an express warranty under which the goods must be as described, amounts to an express warranty regarding quality or duration of the goods' future performance.

Q: The owner of Caf Coffee Day declaring that his restaurant makes the world's best cup of coffee is an example of an express warranty.

Q: In January 2003, Evan sold a television set that he stated was "HDTV ready" to Zora. Three months later, Zora learned that the television set was not "HDTV ready." For each of the three major views on the "part of the basis-of-the-bargain" requirement for express warranty liability under UCC Section 2-313, explain what the court will need to know before making a decision.

Q: _____ is the plaintiff's voluntary consent to a known danger. A. Contributory negligence B. Product misuse C. No privity D. Assumption of risk

Q: Steve weighs 465 pounds and looks like it. Steve goes to a store and says that he would like to buy a hammock suitable for someone like himself to sleep in. He makes it clear that it is up to the salesman to select a suitable hammock. The salesman selects a hammock that is perfectly suitable for a normally-sized person but that cannot support someone of Steve's weight. Relying on the salesman's recommendation, Steve buys the hammock. After he is injured when the hammock collapses because it cannot bear his weight, Steve sues the store. Can Steve recover under the implied warranty of merchantability? Assume that the store is a merchant with respect to hammocks.

Q: Which of the following theories of recovery is likely to be most effective against a disclaimer of liability? A. Express warranty B. Implied warranty of merchantability C. Implied warranty of fitness D. Section 402A