Question 1

Set forth what the UCC requires in the way of good faith and the duty imposed on both nonmerchants and merchants.

Accepted Answer

The UCC requires good faith in the performance and enforcement of every contract. Good faith means honesty in fact. When the parties are merchants, the UCC imposes a higher standard. Between merchants, the UCC imposes not only honesty in fact but also reasonable commercial standards of fair dealing.

Question 2

Under the UCC, non-delivery is not a breach of contract in circumstances in which performance has been made impracticable because a contingency has occurred that was not contemplated when the parties reached an agreement.

Accepted Answer

A) True 
 B)False

Question 3

[Toshi's Dolls] Toshi owns a specialty doll store and purchases dolls regularly from Yolanda, a doll distributor. For the past few years, Toshi and Yolanda have signed yearly contracts that set forth the terms of the agreement. Although delivery terms are set forth in the agreement, if the delivery comes a day or two late or if Yolanda substitutes doll purses for shoes, Toshi does not complain, as she knows the next shipment will have more shoes than purses. Yolanda has added a new line of designer dolls, and Yolanda asks Toshi to sign a separate agreement with regard to the new doll line which includes a clause that accessories must conform to the order only as to quantity. Toshi's first order of the new line includes a large shipment of dolls and doll purses, but no doll shoes. The first delivery of the new doll line is scheduled to arrive on December 1, however, it arrives on December 2 and includes very few doll shoes and instead includes many doll purses. Yolanda refuses to accept the late shipment and calls Toshi to complain and also tells her that some of the dolls have ugly faces and she is worried they will not sell. Yolanda says that Toshi's been in the doll industry for years and should know that some dolls have flaws on their faces and she has to accept the dolls faces as they are.
-On December 6, RoboCo delivers a shipment of 100 of the RoboMan electronic toy. Unfortunately, on inspection, each unit has a faulty battery pack. The performance time under the contract ends on the 8th. Under which circumstances would RoboCo property exercise its right to cure?

Accepted Answer

A)   The following day, RoboCo delivers a shipment of 100 of the ElectroMan electronic toy.
B)   RoboCo's president e-mails the buyer stating they intend to cure and send 100 of the ElectroMan toy the following day.
C)   RoboCo's president calls the Buyer and asks when the RoboCo toys are needed. After a response that they are needed for a sale on the 15th, RoboCo sends a new shipment of RoboMan, which arrives on the 10th.
D)   RoboCo's president emails the Buyer that 100 of the RoboMan electronic toy will be sent within two weeks.
E)   RoboCo immediately sends a shipment of functional battery packs for RoboMan which arrives the next day.F) A) and B)
G) A) and E)

Question 4

In reference to the case in the text DeJesus v Cat Auto Tech. Corp., what was the effect of the defendant's payment for goods without inspection on the day of delivery, when the delivery was approximately two weeks after the time called for by the contract?

Accepted Answer

A)   The defendant effectively waived the performance provisions of the contract regarding the time for delivery.
B)   The defendant did not lose any rights because under the UCC he had 24 hours after delivery in which to object to late delivery.
C)   The defendant did not lose any rights because under the UCC he had 48 hours after delivery in which to object to late delivery.
D)   The defendant did not lose any rights because under the UCC he had 7 days after delivery in which to object to late delivery.
E)   The defendant did not lose any rights because under the UCC he had 10 days after delivery in which to object to late delivery.F) C) and D)
G) A) and B)

Question 5

Letizia, who owns a candy shop, agreed to sell Rudy, a teacher, all the chocolate candy bars in her shop for treats for his class. Unfortunately, through no fault of hers, Letizia's air conditioner broke and the chocolate bars partially melted. What are the rights and duties of the parties in relation to the contract?

Accepted Answer

Under the UCC, if goods are identified a...

Question 6

[Smeared cupcakes] Kai orders forty decorated cupcakes from Liu's bakery next door to be sold in his restaurant. During delivery, Lui trips and the box tips over. When Kai opens the box to inspect the cupcakes, the frosted decorations on the cupcakes are smeared.
-Must Kai accept the cupcakes?

Accepted Answer

A)   Yes, if they are still sellable, he must perform under the terms of the contract.
B)   No, since the goods are partially destroyed, Kai may treat the contract as void.
C)   No, but he must provide Lui with time to cure.
D)   Yes, unless the contract specifically states otherwise.
E)   No, since the goods are partially destroyed, Lui may treat the contract as void.F) A) and C)
G) A) and B)

Question 7

What was the result on appeal in the case in the text Alaska Pacific Trading Co. v. Eagon Forest Products Inc. in which the defendant rejected a shipment of logs, and the plaintiff/seller claimed that its late shipment was excused because the contract did not specify that time was of the essence?

Accepted Answer

A)   That by not shipping the logs in a timely manner according to the contract, the seller failed to satisfy the perfect tender rule thereby releasing the defendant buyer from its duty to accept the logs.
B)   That the seller satisfied the perfect tender rule although the logs were late and that the defendant buyer breached the contract by refusing to accept the logs.
C)   That the seller was entitled to rely on the common law doctrine of material breach but that the seller did not substantially perform thereby releasing the buyer from contractual duties.
D)   That the seller was entitled to rely on the common law doctrine of material breach, that the seller substantially performed, and that the buyer was in breach.
E)   That the seller was entitled to rely on the perfect tender rule and that the buyer materially breached the contract by refusing to accept the logs.F) D) and E)
G) C) and E)

Question 8

The seller must obtain substitute goods if goods identified to a contract are destroyed through no fault of the parties before the risk of loss passes to the buyer.

Accepted Answer

A) True 
 B)False

Question 9

Substantial performance occurs ________

Accepted Answer

A)   when most of the material elements of a contract are satisfied
B)   when all the material elements of a contract are satisfied, even if some nonmaterial requirements may not be satisfied
C)   when there is complete and perfect performance
D)   when the goods are accepted by the buyer/lessee
E)   once the seller/lessor starts to performF) B) and C)
G) B) and E)

Question 10

Usage of trade is defined by the UCC ________

Accepted Answer

A)   as any practice that members of an industry expect to be part of their dealings.
B)   as any regular course of dealing that the parties choose.
C)   as a practice that meets with state customs.
D)   as regular trade in business within a particular region of the country.
E)   as how the industry values course of performance.F) B) and E)
G) A) and D)

Question 11

Ming-Na orders a certain type of rose from a florist for her event. A disease sweeps through that type of rose, and the florist could only obtain the roses at great cost, if at all. Is there any defense that the florist can use?

Accepted Answer

A)   Commercial unreasonableness
B)   Commercial impracticability
C)   Performance hardship
D)   Unforeseen circumstances
E)   Undue influenceF) B) and D)
G) A) and E)

Question 12

Which of the following is not an exception to the perfect tender rule?

Accepted Answer

A)   Revocation of acceptance
B)   Commercial impracticability
C)   Past dealings between the parties
D)   Norms in the industry
E)   Exceptions outlined in the parties' agreementF) C) and E)
G) A) and B) A

Question 13

[Smeared cupcakes] Kai orders forty decorated cupcakes from Liu's bakery next door to be sold in his restaurant. During delivery, Lui trips and the box tips over. When Kai opens the box to inspect the cupcakes, the frosted decorations on the cupcakes are smeared.
-Lui tells Kai the cupcakes can still be sold. Must Kai accept the cupcakes?

Accepted Answer

A)   Yes, because they are still sellable and he must pay the price under the contract.
B)   Yes, his only option is to accept the cupcakes and ask for a price reduction.
C)   No, but Kai must provide Lui with time to cure.
D)   No, Kai can treat the contract as void or Kai can ask Lui for a price reduction and then accept the damaged goods.
E)   No, Kai's only option is to treat the contract as void.F) C) and D)
G) A) and E)

Question 14

Which of the following was the result in the "Case Opener" in which Vitol sued Koch Petroleum for delivering oil one day late causing Vitol to sustain a loss based on its sale to another entity?

Accepted Answer

A)   The court ruled that Koch Petroleum had substantially performed and that Vitol could not recover.
B)   The court ruled that Koch Petroleum had materially performed and that Vitol could not recover.
C)   The court ruled that Koch Petroleum had committed fraud in that the delay was intentional and that Vitol could recover.
D)   The court ruled that Koch Petroleum had violated the perfect tender rule and that Vitol could recover.
E)   The court ruled that both parties were in the wrong and that damages would be split between the two.F) B) and D)
G) C) and D)

Question 15

Under the UCC, which of the following is true if goods are identified at the time the parties entered into a contract and these goods are partially destroyed through no fault of the parties before risk passes to the buyer or lessee?

Accepted Answer

A)   The contract is void.
B)   The buyer may inspect the goods and decide whether to (1)  treat the contract as void or (2)  ask the seller for a reduction of the contract price and then accept the damaged goods.
C)   The seller may inspect the goods and decide whether to (1)  treat the contract as void or (2)  offer the buyer a reduction of the contract price for the damaged goods.
D)   Unless the parties can agree on a price, the matter must be submitted to arbitration for a determination as to an appropriate price.
E)   Unless the parties can agree on a price, the contract is voidable at the option of the seller.F) C) and D)
G) A) and B)

Question 16

Which of the following was the result on appeal in Donovan v. RRL Corporation, the case in the text in which the plaintiff attempted to enforce a price for an automobile contained in an ad, and the defendant car dealership claimed that a mistake was involved?

Accepted Answer

A)   The court ruled in favor of the dealership because ads can never constitute offers.
B)   The court ruled in favor of the dealership because an intentional misrepresentation is needed before an ad can be considered an offer, and there was no proof of an intentional misrepresentation on the part of the dealership.
C)   The court ruled in favor of the dealership on a combination of mistake and unconscionability.
D)   The court ruled in favor of the plaintiff because the ad constituted an enforceable offer.
E)   The court ruled in favor of the plaintiff on the basis of unilateral mistake and unconscionability.F) A) and C)
G) None of the above

Question 17

A seller need not provide an opportunity for inspection before enforcing payment.

Accepted Answer

A) True 
 B)False

Question 18

[Softball Trophies] To recognize softball players on his team, Eduardo ordered from Troy 10 trophies showing a softball player swinging a bat. The trophies were to be delivered on May 1st for an award dinner to be held on May 20th. Troy was at first unable to obtain trophies showing a softball player swinging a bat, but by May 13th, he did locate some trophies with a softball player holding a bat. The difference did not substantially impair the value of the trophies, and thinking that the trophies would be acceptable, Troy delivered them on May 14th. Eduardo glanced at the trophies, paid for them with a check, and said nothing. On May 16th Eduardo looked at the trophies more closely and decided that he did not like them. Eduardo canceled payment on his check, and Troy sued him for payment.
-Only considering the issue involving the time set for delivery, what is the likely effect of Troy delivering the trophies after the agreed upon time?

Accepted Answer

A)   Eduardo has the right to rely on the failure of Troy to deliver the trophies in a timely manner and will likely prevail.
B)   Eduardo's payment for the trophies without inspection and after the time called for by the contract likely waived the performance provisions of the contract regarding the time for delivery.
C)   Eduardo did not waive the performance provisions of the contract regarding the time for delivery because he paid by check.
D)   Eduardo did not waive the performance provisions of the contract regarding the time for delivery only because he canceled the check before it was cashed by Troy.
E)   Eduardo cannot rely upon the performance provisions of the contract regarding the time for delivery because he did not object within 24 hours of the delivery of the trophies and, therefore, did not meet the UCC 24-hour rule.F) A) and E)
G) B) and D) B

Question 19

Which of the following states that when a contract for sale involves repeated occasions for performance by either party with the other's knowledge of the nature of the performance and opportunity for objection to it, any course of performance accepted or acquiesced to without objection is relevant to determine what the parties' agreement means?

Accepted Answer

A)   Trade norm
B)   Course of dealing
C)   Anticipated trade dealing
D)   Usage of trade
E)   Course of performanceF) A) and B)
G) B) and E)

Question 20

[Smeared cupcakes] Kai orders forty decorated cupcakes from Liu's bakery next door to be sold in his restaurant. During delivery, Lui trips and the box tips over. When Kai opens the box to inspect the cupcakes, the frosted decorations on the cupcakes are smeared.
-Arturo, an exotic animal dealer contracts with Benita, an importer of exotic animals, to purchase several rare lizards. After the contract is executed, the U.S. government issues a ban on the importation of lizards. When Benita fails to deliver the lizards as per the contract, Arturo tells her she is in breach of their contract. What is Benita's best defense?

Accepted Answer

A)   Commercial impracticability
B)   Commercial illegality
C)   Perfect tender rule
D)   She has the right to cure by providing lizards that are not imported.
E)   She cannot provide conforming goods under the contract.F) C) and E)
G) C) and D)

Exam 23: Performance and Obligations Under Sales and Leases

Set forth what the UCC requires in the way of good faith and the duty imposed on both nonmerchants and merchants.

Under the UCC, non-delivery is not a breach of contract in circumstances in which performance has been made impracticable because a contingency has occurred that was not contemplated when the parties reached an agreement.

Correct Answer
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Correct Answer
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In reference to the case in the text DeJesus v Cat Auto Tech. Corp., what was the effect of the defendant's payment for goods without inspection on the day of delivery, when the delivery was approximately two weeks after the time called for by the contract?

Correct Answer
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Correct Answer
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Under the UCC, if goods are identified a...
View Answer

[Smeared cupcakes] Kai orders forty decorated cupcakes from Liu's bakery next door to be sold in his restaurant. During delivery, Lui trips and the box tips over. When Kai opens the box to inspect the cupcakes, the frosted decorations on the cupcakes are smeared. -Must Kai accept the cupcakes?

Correct Answer
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What was the result on appeal in the case in the text Alaska Pacific Trading Co. v. Eagon Forest Products Inc. in which the defendant rejected a shipment of logs, and the plaintiff/seller claimed that its late shipment was excused because the contract did not specify that time was of the essence?

Correct Answer
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The seller must obtain substitute goods if goods identified to a contract are destroyed through no fault of the parties before the risk of loss passes to the buyer.

Correct Answer
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Substantial performance occurs ________

Correct Answer
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Usage of trade is defined by the UCC ________

Correct Answer
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Ming-Na orders a certain type of rose from a florist for her event. A disease sweeps through that type of rose, and the florist could only obtain the roses at great cost, if at all. Is there any defense that the florist can use?

Correct Answer
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Which of the following is not an exception to the perfect tender rule?

Correct Answer
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A

Correct Answer
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Which of the following was the result in the "Case Opener" in which Vitol sued Koch Petroleum for delivering oil one day late causing Vitol to sustain a loss based on its sale to another entity?

Correct Answer
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Under the UCC, which of the following is true if goods are identified at the time the parties entered into a contract and these goods are partially destroyed through no fault of the parties before risk passes to the buyer or lessee?

Correct Answer
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Which of the following was the result on appeal in Donovan v. RRL Corporation, the case in the text in which the plaintiff attempted to enforce a price for an automobile contained in an ad, and the defendant car dealership claimed that a mistake was involved?

Correct Answer
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A seller need not provide an opportunity for inspection before enforcing payment.

Correct Answer
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Correct Answer
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B

Correct Answer
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Correct Answer
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Exam 23: Performance and Obligations Under Sales and Leases

Set forth what the UCC requires in the way of good faith and the duty imposed on both nonmerchants and merchants.

Under the UCC, non-delivery is not a breach of contract in circumstances in which performance has been made impracticable because a contingency has occurred that was not contemplated when the parties reached an agreement.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In reference to the case in the text DeJesus v Cat Auto Tech. Corp., what was the effect of the defendant's payment for goods without inspection on the day of delivery, when the delivery was approximately two weeks after the time called for by the contract?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedUnder the UCC, if goods are identified a...View AnswerShow Answer

[Smeared cupcakes] Kai orders forty decorated cupcakes from Liu's bakery next door to be sold in his restaurant. During delivery, Lui trips and the box tips over. When Kai opens the box to inspect the cupcakes, the frosted decorations on the cupcakes are smeared. -Must Kai accept the cupcakes?

Correct AnswerverifiedShow Answer

What was the result on appeal in the case in the text Alaska Pacific Trading Co. v. Eagon Forest Products Inc. in which the defendant rejected a shipment of logs, and the plaintiff/seller claimed that its late shipment was excused because the contract did not specify that time was of the essence?

Correct AnswerverifiedShow Answer

The seller must obtain substitute goods if goods identified to a contract are destroyed through no fault of the parties before the risk of loss passes to the buyer.

Correct AnswerverifiedShow Answer

Substantial performance occurs ________

Correct AnswerverifiedShow Answer

Usage of trade is defined by the UCC ________

Correct AnswerverifiedShow Answer

Ming-Na orders a certain type of rose from a florist for her event. A disease sweeps through that type of rose, and the florist could only obtain the roses at great cost, if at all. Is there any defense that the florist can use?

Correct AnswerverifiedShow Answer

Which of the following is not an exception to the perfect tender rule?

Correct AnswerverifiedA

Correct AnswerverifiedShow Answer

Which of the following was the result in the "Case Opener" in which Vitol sued Koch Petroleum for delivering oil one day late causing Vitol to sustain a loss based on its sale to another entity?

Correct AnswerverifiedShow Answer

Under the UCC, which of the following is true if goods are identified at the time the parties entered into a contract and these goods are partially destroyed through no fault of the parties before risk passes to the buyer or lessee?

Correct AnswerverifiedShow Answer

Which of the following was the result on appeal in Donovan v. RRL Corporation, the case in the text in which the plaintiff attempted to enforce a price for an automobile contained in an ad, and the defendant car dealership claimed that a mistake was involved?

Correct AnswerverifiedShow Answer

A seller need not provide an opportunity for inspection before enforcing payment.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedB

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Under the UCC, if goods are identified a...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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A

Correct Answer
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B

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Correct Answer
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