Question 1

The ________ requires a suit be brought within four years from the date of the cause of action.

Accepted Answer

A)   parol evidence rule
B)   common law
C)   federal law
D)   limitations of law
E)   statute of limitationsF) B) and D)
G) A) and E)

Question 2

When does the UCC allow buyers and lessees to seek the remedy of specific performance?

Accepted Answer

A)   The UCC only allows buyers and lessees to seek the remedy of specific performance when goods are unique.
B)   The UCC only allows buyers and lessees to seek the remedy of specific performance when a remedy at law is inadequate.
C)   The UCC only allows buyers and lessees to seek the remedy of specific performance when goods are worth more than $500.
D)   The UCC allows buyers and lessees to seek the remedy of specific performance when goods are unique, when a remedy at law is inadequate, or when goods are worth more than $500.
E)   The UCC allows buyers and lessees to seek the remedy of specific performance when goods are unique or when a remedy at law is inadequate.F) A) and B)
G) B) and D)

Question 3

What is the preferred remedy for non-breaching buyers or lessees under the UCC?

Accepted Answer

A)   Cover
B)   Mutual breach
C)   Rescission
D)   Repudiation
E)   Tort litigationF) C) and E)
G) C) and D)

Question 4

Yolinda breaches her contract with Phillip. Phillip sues Yolinda. What is the ultimate goal of contractual remedies?

Accepted Answer

A)   To deter parties from breaching their contracts.
B)   To compensate breach victims.
C)   To enforce social order.
D)   To punish parties from breaching contracts
E)   To provide a private system of justiceF) None of the above
G) A) and B)

Question 5

Which of the following may a buyer/lessee do if the seller/lessor delivers nonconforming goods?

Accepted Answer

A)   Reject the goods and obtain cover only
B)   Obtain cover only
C)   Reject the goods and cancel the contract only
D)   Reject the goods, and then obtain cover or cancel the contract
E)   Reject the goods and obtain cover, but the buyer may not cancel the contractF) B) and D)
G) C) and D)

Question 6

The ultimate goal of contractual remedies is the possibility or probability that a system providing compensation to punish the breaching party and award punitive damages.

Accepted Answer

A) True 
 B)False

Question 7

[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 Luke's claim that Maya had no right to withhold his furniture?

Accepted Answer

A)   Luke is correct. Maya was required to deliver the furniture, but she retained the right to sue him for any deficiency.
B)   Luke is correct but only because of the special UCC exception for consumer goods.
C)   Luke is incorrect. Maya had a right to withhold the furniture.
D)   Luke is incorrect but only if Maya can prove that she had no reason to believe that he was a credit risk prior to signing the contract of sale.
E)   Luke is correct because of federal consumer protection laws.F) D) and E)
G) A) and B)

Question 8

[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 Blake's rights, if any, as to the personal watercraft?

Accepted Answer

A)   She has no right to cover although she may sue for damages because, while the UCC allows for installment sales, deposits are not required in the installment sale situation.
B)   She has a right to cover only because she is a consumer, not a merchant.
C)   She has a right to cover only if she pays the initial watercraft seller any amount by which the cost of the watercraft used for cover was lower than the cost of the initial watercraft.
D)   She has no right to cover only because she is a consumer, not a merchant.
E)   She has no right to cover, and the merchant was not required to deliver the personal watercraft.F) A) and D)
G) A) and B)

Question 9

________ usually requires that the seller or lessor deliver the particular goods identified in the contract.

Accepted Answer

A)   Nominal performance
B)   Absolute performance
C)   Specific performance
D)   Diligent performance
E)   True performanceF) C) and E)
G) A) and B)

Question 10

What was the result in the text case involving the sale of a specialty metal, Almetals Inc., v. Wickeder Westfalenstahl, GMBH, the plaintiff sued the defendant for breach of contract seeking specific performance.

Accepted Answer

A)   Specific performance was unavailable because real estate was not involved.
B)   Specific performance was unavailable because a foreign defendant was involved and jurisdiction for specific performance was, therefore, lacking.
C)   Specific performance was unavailable because the goods at issue were scarce.
D)   Specific performance was unavailable because a requirements contract was involved.
E)   Specific performance was the appropriate remedy because the goods at issue were unique with no known alternative sources of supply.F) B) and D)
G) A) and B)

Question 11

Which circumstance may a seller reclaim goods when a buyer is in possession of goods and is in breach under UCC 2-702(2) ,

Accepted Answer

A)   A seller cannot reclaim goods ever.
B)   As soon as the buyer is late on a payment.
C)   Within 48 hours of the buyer being late on their payment.
D)   When the buyer is at least 10 days late on a payment
E)   When the seller discovers the buyer is insolvent.F) A) and B)
G) All of the above

Question 12

What does the UCC say regarding a limitation of consequential damages for commercial losses?

Accepted Answer

A)   A limitation of consequential damages for commercial losses is acceptable so long as both parties are represented by an attorney.
B)   A limitation of consequential damages for commercial losses is acceptable so long as any consumer was represented by an attorney.
C)   A limitation of consequential damages for commercial losses is prima facie unconscionable.
D)   A limitation of consequential damages for commercial losses is analyzed in the same way as a limitation of consequential damages for personal injury.
E)   A limitation of consequential damages for commercial losses is not prima facie unconscionable.F) A) and D)
G) B) and E)

Question 13

When will a court refuse to uphold modifications or limitations to remedies agreed upon by the parties in a contract?

Accepted Answer

A)   When the modifications or limitations seem to give one side a benefit.
B)   When one party to the agreement is a corporation.
C)   When neither party to the agreement is a corporation.
D)   When one party was not represented by an attorney.
E)   When the remedies agreed upon fail in their essential purpose.F) C) and D)
G) D) and E)

Question 14

The UCC give buyers and lessees the ability to ________?

Accepted Answer

A)   keep the proceeds as the benefit of the bargain, but cannot cancel the contract.
B)   cancel the contract and to seek remedies that give them the benefit of the bargain.
C)   rescind the contract and seek punitive damages.
D)   refuse the goods immediately and sue for punitive damages.
E)   receive the benefit of the bargain plus 25% of the expected profits.F) D) and E)
G) A) and C)

Question 15

Carolyn, a lessee in possession of a leased piece of equipment, fails to make payments on the equipment as required. What remedy does Raul, the lessor, have under the UCC 2A-525(2) ?

Accepted Answer

A)   The right to put a lien on the lessee.
B)   The right to sue the lessee under federal law.
C)   The right to bring a tort action
D)   The right to reclaim the goods
E)   No remedy is provided and common law contract remedies will suffice.F) A) and E)
G) A) and D)

Question 16

________ include lost profits so long as those damages are not too speculative in nature.

Accepted Answer

A)   Punitive damages
B)   Nominal damages
C)   Remedial damages
D)   Consequential damages
E)   Compensatory damagesF) A) and B)
G) A) and C)

Question 17

In the event of equipment malfunction, what does the UCC provide in terms of a limitation on consequential damages allowing for repair, replace, or refund?

Accepted Answer

A)   That consequential damages may be limited or excluded unless the limitation or exclusion benefits one party over the other.
B)   That consequential damages may be limited or excluded unless the limitation or exclusion is unconscionable.
C)   That consequential damages may be limited but not excluded entirely.
D)   That consequential damages may be limited or excluded entirely unless any type of breach of warranty is involved in which case consequential damages may be limited but not excluded.
E)   That consequential damages may be limited or excluded entirely unless any type of breach of warranty is involved in which case consequential damages may be neither limited nor excluded.F) D) and E)
G) A) and D)

Question 18

Greenlee and Monica identify in their contract an amount of damages that will be paid before a breach occurs. These types of damages are known as ________.

Accepted Answer

A)   Nominal damages
B)   Compensatory damages
C)   Reliance damages
D)   Liquidated damages
E)   Consequential damagesF) A) and C)
G) A) and D)

Question 19

Abel is a seller of rare sports cards. Yolanda asks Abel to find her a Babe Ruth rookie baseball card and agrees to pay him a $1,000 finders fee above the price of the card. Abel finds a card that Josef has for sale and enters into a contract with Josef to buy the card. Josef is supposed to send it by Tuesday because Yolanda is leaving the country on Thursday. Josef never sends the card, and Yolanda tells Abel to forget it because she is leaving the country. If Abel sues Josef for $1,000 in damages, is he likely to win?

Accepted Answer

A)   No because Josef did not breach the contract.
B)   No because the damages are too speculative.
C)   No because you can never obtain compensation for lost profits in contract cases
D)   Yes, because the $1,000 is an appropriate amount of punitive damages.
E)   Yes, because the $1,000 is a consequential damage of breach.F) B) and E)
G) B) and C)

Question 20

[Fixture Mishap] Samantha owns a hardware shop that also sells expensive bathroom fixtures. Maddie, a whiz with tools, purchased some expensive fixtures for her bathroom for $400. Samantha had only one set of the fixtures that Maddie wanted. Although Maddie noticed a slight discoloration on one of the faucets, she went ahead with the contract because Samantha indicated that she would remedy the situation should the problem become worse. Because they were friends and attended the same church, Samantha gave Maddie 90 days in which to pay. A month later, and before she paid for the fixtures, Maddie called Samantha and told her that the fixtures were corroding, the discoloration had worsened, and the fixtures looked terrible. Samantha said that she would provide Maddie replacements, but six months later they had not arrived, and Samantha told Maddie that they were on back order. At that point, Maddie purchased fixtures elsewhere for $500 and informed Samantha that she could pick up the corroded fixtures at her front door. Samantha picked up the fixtures, and although they were obviously defective, Samantha was able to resell them for $100. Samantha told Maddie that she would have gladly provided fixtures that would not corrode if she had only a bit more time, that Maddie should have given her a chance to do so, and that as far as Samantha was concerned, Maddie owed her $300.
-What is the likely effect of Samantha reselling the defective fixtures for $100?

Accepted Answer

A)   That is the only remedy Samantha will receive.
B)   The $100 will be deducted from the $400 Maddie owes leaving Maddie owing Samantha $300.
C)   Samantha will be allowed to keep the $100 and is still entitled to receive $400 from Samantha.
D)   Because of the extra work involved, Samantha will be required to deduct only half of the $100 from Maddie's debt, leaving Maddie owing $350.
E)   After the $100 is deducted, Samantha and Maddie will be required under the UCC to split the difference leaving Maddie owing $150.F) A) and B)
G) B) and E)

Exam 24: Remedies for Breach of Sales and Lease Contracts

Correct Answer
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Correct Answer
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Greenlee and Monica identify in their contract an amount of damages that will be paid before a breach occurs. These types of damages are known as ________.

Correct Answer
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Which of the following may a buyer/lessee do if the seller/lessor delivers nonconforming goods?

Correct Answer
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What is the preferred remedy for non-breaching buyers or lessees under the UCC?

Correct Answer
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________ include lost profits so long as those damages are not too speculative in nature.

Correct Answer
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The ________ requires a suit be brought within four years from the date of the cause of action.

Correct Answer
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When will a court refuse to uphold modifications or limitations to remedies agreed upon by the parties in a contract?

Correct Answer
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Correct Answer
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The ultimate goal of contractual remedies is the possibility or probability that a system providing compensation to punish the breaching party and award punitive damages.

Correct Answer
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The UCC give buyers and lessees the ability to ________?

Correct Answer
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Correct Answer
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In the event of equipment malfunction, what does the UCC provide in terms of a limitation on consequential damages allowing for repair, replace, or refund?

Correct Answer
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What was the result in the text case involving the sale of a specialty metal, Almetals Inc., v. Wickeder Westfalenstahl, GMBH, the plaintiff sued the defendant for breach of contract seeking specific performance.

Correct Answer
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________ usually requires that the seller or lessor deliver the particular goods identified in the contract.

Correct Answer
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When does the UCC allow buyers and lessees to seek the remedy of specific performance?

Correct Answer
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Which circumstance may a seller reclaim goods when a buyer is in possession of goods and is in breach under UCC 2-702(2) ,

Correct Answer
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What does the UCC say regarding a limitation of consequential damages for commercial losses?

Correct Answer
verified

Yolinda breaches her contract with Phillip. Phillip sues Yolinda. What is the ultimate goal of contractual remedies?

Correct Answer
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Carolyn, a lessee in possession of a leased piece of equipment, fails to make payments on the equipment as required. What remedy does Raul, the lessor, have under the UCC 2A-525(2) ?

Correct Answer
verified

Exam 24: Remedies for Breach of Sales and Lease Contracts

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Greenlee and Monica identify in their contract an amount of damages that will be paid before a breach occurs. These types of damages are known as ________.

Correct AnswerverifiedShow Answer

Which of the following may a buyer/lessee do if the seller/lessor delivers nonconforming goods?

Correct AnswerverifiedShow Answer

What is the preferred remedy for non-breaching buyers or lessees under the UCC?

Correct AnswerverifiedShow Answer

________ include lost profits so long as those damages are not too speculative in nature.

Correct AnswerverifiedShow Answer

The ________ requires a suit be brought within four years from the date of the cause of action.

Correct AnswerverifiedShow Answer

When will a court refuse to uphold modifications or limitations to remedies agreed upon by the parties in a contract?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The ultimate goal of contractual remedies is the possibility or probability that a system providing compensation to punish the breaching party and award punitive damages.

Correct AnswerverifiedShow Answer

The UCC give buyers and lessees the ability to ________?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In the event of equipment malfunction, what does the UCC provide in terms of a limitation on consequential damages allowing for repair, replace, or refund?

Correct AnswerverifiedShow Answer

What was the result in the text case involving the sale of a specialty metal, Almetals Inc., v. Wickeder Westfalenstahl, GMBH, the plaintiff sued the defendant for breach of contract seeking specific performance.

Correct AnswerverifiedShow Answer

________ usually requires that the seller or lessor deliver the particular goods identified in the contract.

Correct AnswerverifiedShow Answer

When does the UCC allow buyers and lessees to seek the remedy of specific performance?

Correct AnswerverifiedShow Answer

Which circumstance may a seller reclaim goods when a buyer is in possession of goods and is in breach under UCC 2-702(2) ,

Correct AnswerverifiedShow Answer

What does the UCC say regarding a limitation of consequential damages for commercial losses?

Correct AnswerverifiedShow Answer

Yolinda breaches her contract with Phillip. Phillip sues Yolinda. What is the ultimate goal of contractual remedies?

Correct AnswerverifiedShow Answer

Carolyn, a lessee in possession of a leased piece of equipment, fails to make payments on the equipment as required. What remedy does Raul, the lessor, have under the UCC 2A-525(2) ?

Correct AnswerverifiedShow Answer

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