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Exam 23: Performance and Obligations Under Sales and Leases

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Question 21

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[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. -What is the difference between the terms course of dealing and course of performance?

A) Course of dealing references previous commercial dealings within the particular industry, while course of performance refers to the history of dealings between the parties in the particular contract at issue.
B) Course of dealing is an exception to the perfect tender rule, while course of performance is not an exception to the perfect tender rule.
C) Course of dealing and course of performance are treated the same with regard to conforming and nonconforming goods.
D) Course of performance references previous commercial transactions between the parties, while course of dealing refers to the history of dealings between the parties in the particular contract at issue.
E) Course of dealing references previous commercial transactions between the parties, while course of performance refers to the history of dealings between the parties in the particular contract at issue.

F) A) and C)
G) A) and E)

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Question 22

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Another term for course of performance is course of dealing.

A) True
B) False

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Question 23

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[Business Law Rocks] Business law instructor Courtney ordered 50 T-shirts for her classes that said "Business Law Rocks" on the front. She wanted to distribute them on the last day of class and contracted with Tyler, who owned a T-shirt business, for the shirts to arrive by that day. The shirts arrived on Thursday, the day before the last class on Friday. Unfortunately, the shirts said "Business Law Yuck" on the front. Tyler told Courtney that he would remedy and fix the problem and that he had the right to do so. She told him, however, that she had to have the shirts the next day because the students would be gone after that. Courtney had also ordered some pamphlets on employment law to be used the next fall semester. The seller had agreed to provide the pamphlets 30 days before spring semester ended. The seller, however, erred and sent pamphlets on environmental law, which arrived 28 days before spring semester ended. The seller attempted to remedy the problem by sending the correct pamphlets on employment law, but they did not arrive until 27 days before spring semester ended. None of the parties had any prior dealings. -By claiming that he had the right to fix the problem, Tyler was alluding to which of the following, under the UCC?

[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. -Which of these is the most likely result if Troy claims he had reasonable grounds to believe the trophies were acceptable?

A buyer who has accepted goods cannot later revoke the acceptance even if the defects substantially impair the value of the goods because he has already accepted them.

The term "reasonable commercial standards of fair dealing" is often called ________.

Which of the following are goods that conform to contract specifications?

The UCC requires that ________ are obligated to accept and pay for conforming goods in accordance with the contract.

Which statement is correct regarding the UCC and norms in the industry?

________, under the UCC, refers to the history of dealings between the parties in the particular contract at issue.

Once a buyer or lessee has accepted, performance is complete and a buyer or lessee cannot withdraw acceptance.

Under the UCC, buyers and lessees are not obligated to accept and pay for conforming goods in accordance with the contract because the lessees still has the right of refusal.

Define the Uniform Computer Information Transactions Act; and describe an important way, discussed in the text, by which the act protects software vendors?

Under an installment contract, when does the UCC provide that a buyer/lessee may reject an installment of a particular item?

Sellers and lessors can repair, adjust, or replaced defective or nonconforming goods as long as they give ________.

[New Furniture] Kristin purchased $2,000 worth of furniture from Solid Wood Furniture. Through an arrangement with Solid Wood, Kristin financed the purchase through a financing company called Let Us Help You. Twenty-nine days after the goods were delivered to her, Kristin had a disagreement with Let Us Help You regarding the amount of interest she would be required to pay. She notified Solid Wood on that day that she was rejecting the goods. Solid Wood claimed that she did not properly reject the furniture and also that she failed to act in good faith, an obligation imposed equally on all parties to a transaction. Kristin says that she properly rejected; that, although the UCC imposes no duty of good faith, she acted in good faith; and that, in any event, she had an absolute right to return the goods. -Which statement is true regarding the claim of Solid Wood that Kristin failed to properly reject the goods?

A buyer who has accepted goods may later ________ if the buyer can show that the defects substantially impaired the value of the goods.

A common law rule known as the ________ requires that the seller deliver goods in conformity with the terms of the contract, down to the last detail.

Margot, a jewelry dealer, sent a shipment of diamond bracelets to Halden's Jewelry Store according to their contract. If Halden's does not reject the goods within a reasonable period, what are Margot's obligations under the contract?

Under the UCC, the buyer does not automatically have the right to reject the goods when the buyer alleges that goods failed to conform to contract specifications.