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Exam 22: Performance and Breachapter of Sales and Lease Contracts

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Question 31

Multiple Choice

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River Gear Company and Scenic Trips Inc. enter into a contract on August 1 for the sale of fifty inflatable river rafts. Scenic cancels the contract ten days later. River is unable to sell the rafts to another buyer. River can

A) force the buyer to accept the rafts and pay for them.
B) recover the contract price but must hold the rafts for the buyer.
C) recover the contract price and keep the rafts.
D) recover the contract price but must destroy the rafts.

E) All of the above
F) C) and D)

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Question 32

Multiple Choice

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Bayou Boats Inc. contracts for the sale of seven swamp boats to Eventide Fishing Tours. Bayou repudiates the contract. Eventide's recovery is measured at the time

A) Bayou advertised the goods.
B) Eventide ordered the goods.
C) Eventide learned of the breach.
D) Bayou knew that it would repudiate the contract.

E) A) and B)
F) All of the above

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Question 33

True/False

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If a buyer wrongfully refuses to accept the goods, the seller can bring an action for damages equal to the difference between the contract and market prices at the time and place of tender.

Real Stones Inc. and Sparkling Jewelry stores enter into a contract for a sale of gemstones. The seller fails to deliver. Sparkling can recover as damages the difference between

Watercraft Inc., a U.S. firm, files a suit in a U.S. court against Xia Ltd., a Chinese company, seeking specific performance. Under the United Nations Convention for the International Sale of Goods, the court is most likely to grant this remedy if

Under the United Nations Convention on Contracts for the International Sale of Goods, a buyer can avoid obligations under a contract only if the seller fails to deliver the goods.

When the time for performance under a contract expires, the right to cure also expires.

Nature's Eggs Inc. agrees to supply Omelet Express with five hundred eggs. Nature's Eggs can reasonably ask Omelet Express to pick up the eggs at

Fiesta LLC contracts to buy 1,000 balloons from Gas Bags Inc. for $1 per item. When the market price decreases to 50 cents per balloon, Fiesta refuses to go through with the deal. Gas Bags can recover

A letter of credit is independent of the underlying contract between a buyer and seller, requiring the issuer to ascertain whether the contractual conditions have been met.

A buyer can revoke his or her acceptance if it was predicated on a reasonable assumption that the goods' nonconformity would be cured, and the nonconformity was not cured.

Minerals Ltd. contracts to provide several manufacturers with tin. When a cartel of tin-producing countries suddenly embargoes future shipments of tin to Minerals so that it cannot fulfill its contracts, the distributor

A seller who tenders nonconforming goods with a price allowance has reasonable grounds to believe that the buyer will accept the tender.

When a buyer or lessee is a consumer, any limitation of damages is per se unconscionable.

Builder Inc. and Concrete Supply Company enter into a contract for a sale of cement. Concrete delivers, but Builder does not pay. Concrete can recover as damages

A buyer can revoke his or her acceptance if, despite assurances by the seller that the goods would conform, the buyer was aware of their nonconformity before acceptance.

Under the UCC, good faith can never be disclaimed.

Elegant Carpet Inc. agrees to sell a certain quantity of carpeting to Fabulous Floor stores under a shipment contract. Elegant must

If a seller fails to deliver the goods, the buyer can purchase other goods to substitute for those due under the contract, but cannot then sue for consequential damages.

If a party to a contract has reasonable grounds to believe that the other party will not perform, he or she can demand in writing assurance of performance.