Question 1

In the text case, Detroit Radiant Products Company v. BSH Home Appliances Corporation, the plaintiff, a seller of gas-fired infrared heaters, sought to recover lost profits based on the defendant's breach of contract. Which of the following was the result on appeal?

Accepted Answer

A)   The court awarded the plaintiff lost profits based on the fact that lost profits are the default measure of damages under Article 2 of the UCC.
B)   The court awarded the plaintiff the difference between the contract price less the market price plus incidental damages based on the fact that such damages were the default measure of damages under Article 2 of the UCC.
C)   The court awarded the plaintiff lost profits in addition to the difference between the contract price less the market price plus incidental damages based on the fact that all such damages were the default measure of damages under Article 2 of the UCC.
D)   The court awarded the plaintiff the value of the unsellable inventory it had due to the defendant's breach and also lost profits because the default measure (the difference between the contract price less the market price plus incidental damages)  did not make the plaintiff whole.
E)   The court awarded the plaintiff lost profits and also the value of the unsellable inventory it had due to the defendant's breach because the default measure (lost profits)  did not make the plaintiff whole.F) C) and E)
G) B) and D)

Question 2

[Missed Payments] Blake, who loved water sports and relaxing in hot tubs, purchased a hot tub on an installment plan and was to pay the seller monthly. Her last payment was made on January 2, 2011. After several failed attempts at collection, the seller brought a lawsuit against Blake for sums remaining on the account on January 3, 2016. Blake defended on the basis that the statute of limitations had expired on the claim. The seller argued, however, that adequate time remained because the UCC applies a flexible statute of limitations; and, at any rate, sellers have at least five years in which to sue. Blake also arranged to purchase a personal watercraft. According to the terms of his contract with the seller, Blake was to pay an initial deposit within 10 days of the sale, at which point she could take possession of the watercraft and make monthly payments thereafter. A couple of days after purchasing the personal watercraft, Blake realized that a personal watercraft would not allow her to invite all her friends on lake trips and purchased a pontoon boat instead. Because the seller of the pontoon boat demanded cash, Blake paid the total sales price prior to delivery. Unfortunately, when the pontoon boat was delivered, Blake found that it had a less powerful motor than the seller represented. Blake notified the seller of the problem, but the seller claimed to have no obligation to remedy the problem. Although she knew that she paid too much for it, Blake decided that since lake season was underway, she would keep the pontoon boat. Because Blake paid full price for the pontoon boat, she was unable to pay within 10 days the deposit on the personal watercraft. The seller refused to deliver the watercraft, and sold it to another customer. Blake informed the seller that the refusal to deliver the watercraft was wrongful and that she was going to exercise her right to cover.
-Which of the following is true regarding the hot tub seller's right to recover funds from Blake?

Accepted Answer

A)   The seller will likely be able to proceed because the UCC has a flexible statute of limitations that takes into account whether the seller attempted to collect or lulled the plaintiff into believing collection efforts would not be made.
B)   The seller will be able to proceed because the UCC statute of limitations in this case would not expire for five years once a cause of action accrued.
C)   The seller will not be able to proceed because the UCC statute of limitations in this case expired three years after the cause of action accrued.
D)   The seller will not be able to proceed because the UCC statute of limitations in this case expired four years after the cause of action accrued.
E)   The seller will not be able to proceed because the UCC statute of limitations in this case expired two years after the cause of action accrued.F) C) and D)
G) B) and E)

Question 3

Which of the following statements is true regarding revocation of accepted nonconforming goods?

Accepted Answer

A)   Once goods have been accepted, they may not be rejected.
B)   A buyer has an absolute right within 10 days after delivery in which to revoke acceptance of nonconforming goods.
C)   A buyer has an absolute right within 48 hours after delivery in which to revoke acceptance of nonconforming goods.
D)   A buyer has an absolute right within 30 days after delivery in which to revoke acceptance of nonconforming goods.
E)   While there is no set time limit, the UCC sometimes allows a buyer to revoke acceptance of nonconforming goods.F) None of the above
G) A) and B)

Question 4

Greg is seeking a remedy as a buyer of a defective car that CarsGarlore sold him. What remedy does he have?

Accepted Answer

A)   Lemon laws
B)   Lender laws
C)   Clunker laws
D)   Roadside laws
E)   Protector lawsF) A) and E)
G) A) and D)

Question 5

The ruling in the text case, Hill v. Gateway, stated that in order for a contract to be effective, it must be verbally read to any consumer purchasing a computer over the telephone.

Accepted Answer

A) True 
 B)False

Question 6

What was the result on appeal in Figgie International Inc., v. Destileria Serralles Inc., the case in the text involving a dispute over bottle-labeling equipment that did not perform as expected and whether usage of trade limited the buyer's remedy to repair, replacement, or return?

Accepted Answer

A)   The court ruled that the remedy of repair, replacement, or a refund failed of its essential purpose and that the buyer was therefore not limited to that remedy.
B)   The court ruled that the remedy of repair, replacement, or a refund did not fail of its essential purpose, and the remedy was enforced.
C)   The remedy of repair, replacement, or a refund was found unconscionable and not enforced.
D)   The remedy of repair, replacement, or a refund was found unconscionable but enforced anyway.
E)   The remedy of repair, replacement, or a refund was not enforced because usage of trade may not supplement a contract.F) C) and E)
G) B) and D)

Question 7

If the buyer is in breach, the UCC does not allow a seller to cancel a contract.

Accepted Answer

A) True 
 B)False

Question 8

[Refused Furniture] Maya arranged to sell furniture from her furniture store to Luke for $3,000. Luke was required to give Maya a $500 deposit on February 1 and pay the remainder in monthly installments. Maya was to deliver the furniture by February 7. Luke did not pay Maya the deposit as promised on February 1. He asked her to wait until March 1, but she refused. She told him that the contract was canceled, and she refused to deliver the furniture at all. Due to a downturn in the economy, Maya was able to sell the furniture for only $2,500. Luke told Maya that she had no right to withhold or sell his furniture to another buyer, and that he was going to file suit. Maya also incurred $100 in additional advertising costs to advertise the furniture that Luke initially purchased. Maya saved $40 in delivery costs because she did not have to deliver the furniture to Luke and the subsequent purchaser picked up her own furniture.
-Which of the following statements is true regarding any deduction in damages to which Luke is entitled?

Accepted Answer

A)   Luke is not entitled to any deduction because he was the breaching party.
B)   Luke is entitled to a deduction for the delivery expenses only if he can show that Maya agreed in writing to deduct those expenses in the event of a breach.
C)   Luke is entitled to a deduction for the delivery expenses only if he can establish that Maya either knew or should have known that he would be unable to pay for the furniture.
D)   Luke is entitled to a deduction for the delivery expenses because that was a savings to Maya.
E)   Luke is entitled to a deduction for the delivery expenses because Maya breached the contract by not delivering the furniture to him and then pursuing an action for damages.F) D) and E)
G) A) and D)

Question 9

When a lessee in possession of the goods is in breach, when may a lessor reclaim goods according to UCC 2A-525(2) ?

Accepted Answer

A)   When the lessor discovers the lessee is insolvent
B)   When the lessee fails to make payments according to the lease terms
C)   When the lessee has received at least 10 days prior notification of reclamation
D)   When the lessor discovers a significant reduction in the lessee's credit score
E)   When the lessor can establish a valid contract for actual purchase of the goodsF) A) and E)
G) C) and E)

Question 10

Fred's Fireplaces enters into a contract with Miguel's Patio Supply in which Miguel's agrees to purchase 20 fireplaces. Miguel fails to pay and Fred's Fireplaces cancels the contract. Fred's does not notify Miguel. Did Fred's Fireplaces act appropriately?

Accepted Answer

A)   No because cancelling a contract is never appropriate.
B)   No because filing a lawsuit is required before cancelling a contract.
C)   No because a contract can be cancelled in the event of breach only if the contract is for at least 50 units of goods.
D)   No, because the UCC requires sellers to notify buyers of a cancellation if the seller cancels the contract due to a breach.
E)   Yes, because a seller always has a right to cancel a contract before performance is due.F) A) and B)
G) None of the above

Question 11

If the parties do not agree to liquidated damages, does the UCC provide for them?

Accepted Answer

A)   Yes, the non-breaching seller may claim against a breaching buyer 20 percent of the purchase price or $500, whichever is less, as liquidated damages.
B)   Yes, the non-breaching seller may claim against a breaching buyer 20 percent of the purchase price or $500, whichever is more, as liquidated damages.
C)   Yes, the non-breaching seller may claim against a breaching buyer 30 percent of the purchase price or $1,000, whichever is less, as liquidated damages.
D)   Yes, the non-breaching seller may claim against a breaching buyer 30 percent of the purchase price or $1,000, whichever is more, as liquidated damages.
E)   No, because liquidated damages are unavailable under the UCC unless the parties have expressly agreed to them.F) A) and C)
G) A) and B)

Question 12

A buyer can never revoke acceptance of nonconforming goods.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is true regarding whether usage of trade may impose a remedy in the event of a breach?

Accepted Answer

A)   Usage of trade may not impose a remedy in the event of a breach.
B)   Usage of trade may impose a remedy in the event of a breach but it may not impose an exclusive remedy.
C)   Usage of trade may impose an exclusive remedy in the event of a breach.
D)   Usage of trade may impose an exclusive remedy in the event of a breach only if both sides are represented by an attorney.
E)   Usage of trade may impose an exclusive remedy in the event of a breach only if a contract signed by both parties specifically provides as such.F) A) and E)
G) A) and C)

Question 14

Which of the following is true of remedies provided by the UCC?

Accepted Answer

A)   The remedies must be narrowly administered to ensure justice.
B)   The remedies must be liberally administered to put the aggrieved party in as good a position as if the other party had fully performed
C)   The remedies must be liberally administered to put the aggrieved party in a better position than he would have been in had performance occurred.
D)   The remedies must be liberally administered to punish the wrongdoing party
E)   The UCC does not provide remediesF) C) and E)
G) A) and B)

Question 15

Fred's Fireplaces enters into a contract with Miguel's Patio Supply in which Miguel's agrees to purchase 20 fireplaces. Miguel fails to pay and Fred's Fireplaces sells the fireplaces to Phillips Outdoor Store instead. Did Fred's Fireplaces act appropriately?

Accepted Answer

A)   No because selling goods to another buyer is never appropriate.
B)   No because filing a lawsuit is required before selling goods to another buyer.
C)   No because selling goods to another buyer is appropriate in the event of breach only if the contract is for at least 50 units of goods.
D)   No, because the UCC requires sellers to notify buyers within 100 days of selling goods to another buyer in the event of a breach.
E)   Yes, because the UCC allows a seller to sell the goods to someone else if the buyer breaches the contract before the seller has delivered the goods.F) A) and B)
G) B) and D)

Question 16

The term "cover" refers to buyers' or lessees' substitution of goods for those due under a sales or lease agreement.

Accepted Answer

A) True 
 B)False

Question 17

Fred's Fireplaces enters into a contract with Miguel's Patio Supply in which Miguel's agrees to purchase 20 fireplaces. This is considered a small order. Miguel, who is still running a business and who is still solvent, fails to pay for the fireplaces. Fred's Fireplaces stops delivery as the fireplaces are on the way to Miguel. Did Fred's Fireplaces act appropriately?

Accepted Answer

A)   No because stopping delivery of goods in transit is permitted when the buyer is solvent only if the quantity shipped is large.
B)   No because filing a lawsuit is required before stopping delivery of goods in transit.
C)   No because stopping delivery of goods in transit is appropriate in the event of breach only if the contract is for at least 50 units of goods.
D)   No, because the UCC requires sellers to notify buyers within 100 days of stopping delivery of goods in transit in the event of a breach.
E)   Yes, a seller may stop delivery any time.F) A) and B)
G) B) and D)

Question 18

The UCC is new legal principles established by Congress and does not include common law.

Accepted Answer

A) True 
 B)False

Question 19

Cancelling a contract is a remedy of first resort from the UCC's perspective.

Accepted Answer

A) True 
 B)False

Question 20

Discuss when specific performance is available as a remedy against a seller or lessor when the sale of goods is involved, and what is involved if specific performance is required.

Accepted Answer

The answer of Discuss when specific performance is available as...

Exam 24: Remedies for Breach of Sales and Lease Contracts

In the text case, Detroit Radiant Products Company v. BSH Home Appliances Corporation, the plaintiff, a seller of gas-fired infrared heaters, sought to recover lost profits based on the defendant's breach of contract. Which of the following was the result on appeal?

Correct Answer
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The UCC is new legal principles established by Congress and does not include common law.

Correct Answer
verified

The ruling in the text case, Hill v. Gateway, stated that in order for a contract to be effective, it must be verbally read to any consumer purchasing a computer over the telephone.

Correct Answer
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What was the result on appeal in Figgie International Inc., v. Destileria Serralles Inc., the case in the text involving a dispute over bottle-labeling equipment that did not perform as expected and whether usage of trade limited the buyer's remedy to repair, replacement, or return?

Correct Answer
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When a lessee in possession of the goods is in breach, when may a lessor reclaim goods according to UCC 2A-525(2) ?

Correct Answer
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Greg is seeking a remedy as a buyer of a defective car that CarsGarlore sold him. What remedy does he have?

Correct Answer
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Which of the following is true of remedies provided by the UCC?

Correct Answer
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Which of the following is true regarding whether usage of trade may impose a remedy in the event of a breach?

Correct Answer
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If the buyer is in breach, the UCC does not allow a seller to cancel a contract.

Correct Answer
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Fred's Fireplaces enters into a contract with Miguel's Patio Supply in which Miguel's agrees to purchase 20 fireplaces. Miguel fails to pay and Fred's Fireplaces sells the fireplaces to Phillips Outdoor Store instead. Did Fred's Fireplaces act appropriately?

Correct Answer
verified

The term "cover" refers to buyers' or lessees' substitution of goods for those due under a sales or lease agreement.

Correct Answer
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A buyer can never revoke acceptance of nonconforming goods.

Correct Answer
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Which of the following statements is true regarding revocation of accepted nonconforming goods?

Correct Answer
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Fred's Fireplaces enters into a contract with Miguel's Patio Supply in which Miguel's agrees to purchase 20 fireplaces. Miguel fails to pay and Fred's Fireplaces cancels the contract. Fred's does not notify Miguel. Did Fred's Fireplaces act appropriately?

Correct Answer
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Correct Answer
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Cancelling a contract is a remedy of first resort from the UCC's perspective.

Correct Answer
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If the parties do not agree to liquidated damages, does the UCC provide for them?

Correct Answer
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Discuss when specific performance is available as a remedy against a seller or lessor when the sale of goods is involved, and what is involved if specific performance is required.

Correct Answer
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Correct Answer
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Correct Answer
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Exam 24: Remedies for Breach of Sales and Lease Contracts

In the text case, Detroit Radiant Products Company v. BSH Home Appliances Corporation, the plaintiff, a seller of gas-fired infrared heaters, sought to recover lost profits based on the defendant's breach of contract. Which of the following was the result on appeal?

Correct AnswerverifiedShow Answer

The UCC is new legal principles established by Congress and does not include common law.

Correct AnswerverifiedShow Answer

The ruling in the text case, Hill v. Gateway, stated that in order for a contract to be effective, it must be verbally read to any consumer purchasing a computer over the telephone.

Correct AnswerverifiedShow Answer

What was the result on appeal in Figgie International Inc., v. Destileria Serralles Inc., the case in the text involving a dispute over bottle-labeling equipment that did not perform as expected and whether usage of trade limited the buyer's remedy to repair, replacement, or return?

Correct AnswerverifiedShow Answer

When a lessee in possession of the goods is in breach, when may a lessor reclaim goods according to UCC 2A-525(2) ?

Correct AnswerverifiedShow Answer

Greg is seeking a remedy as a buyer of a defective car that CarsGarlore sold him. What remedy does he have?

Correct AnswerverifiedShow Answer

Which of the following is true of remedies provided by the UCC?

Correct AnswerverifiedShow Answer

Which of the following is true regarding whether usage of trade may impose a remedy in the event of a breach?

Correct AnswerverifiedShow Answer

If the buyer is in breach, the UCC does not allow a seller to cancel a contract.

Correct AnswerverifiedShow Answer

Fred's Fireplaces enters into a contract with Miguel's Patio Supply in which Miguel's agrees to purchase 20 fireplaces. Miguel fails to pay and Fred's Fireplaces sells the fireplaces to Phillips Outdoor Store instead. Did Fred's Fireplaces act appropriately?

Correct AnswerverifiedShow Answer

The term "cover" refers to buyers' or lessees' substitution of goods for those due under a sales or lease agreement.

Correct AnswerverifiedShow Answer

A buyer can never revoke acceptance of nonconforming goods.

Correct AnswerverifiedShow Answer

Which of the following statements is true regarding revocation of accepted nonconforming goods?

Correct AnswerverifiedShow Answer

Fred's Fireplaces enters into a contract with Miguel's Patio Supply in which Miguel's agrees to purchase 20 fireplaces. Miguel fails to pay and Fred's Fireplaces cancels the contract. Fred's does not notify Miguel. Did Fred's Fireplaces act appropriately?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Cancelling a contract is a remedy of first resort from the UCC's perspective.

Correct AnswerverifiedShow Answer

If the parties do not agree to liquidated damages, does the UCC provide for them?

Correct AnswerverifiedShow Answer

Discuss when specific performance is available as a remedy against a seller or lessor when the sale of goods is involved, and what is involved if specific performance is required.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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