Exam 24: Remedies for Breach of Sales and Lease Contracts

A) No because stopping delivery of goods in transit is never appropriate .
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, because the UCC allows a seller to stop delivery of goods that are in transit.

Correct Answer

verified

Show Answer

A) Maddie breached the contract
B) Maddie revoked acceptance and covered
C) Maddie canceled the contract and exchanged
D) Maddie substantially performed
E) Maddie engaged in a trade modification

Correct Answer

verified

B

A) The difference between the resale price and the contract price, plus incidental damages and minus expenses saved.
B) The difference between the resale price and the contract price only.
C) The difference between the resale price and the contract price minus expenses without any allowance for incidental damages.
D) The difference between the resale price and the contract price, plus incidental damages, with no deduction for expenses saved.
E) Damages are not available because a seller has no rights to resell goods when the original buyer is in breach. The remedy is a suit for damages.

Correct Answer

verified

Show Answer

A) That the nonbreaching seller may claim against a breaching buyer who is guilty of malice 20 percent of the purchase price or $500, whichever is less, as punitive damages.
B) That the nonbreaching seller may claim against a breaching buyer who is guilty of malice 20 percent of the purchase price or $500, whichever is more, as punitive damages.
C) That the nonbreaching seller may claim against a breaching buyer who is guilty of malice 30 percent of the purchase price or $1,000, whichever is less, as punitive damages.
D) That the nonbreaching seller may claim against a breaching buyer who is guilty of malice 30 percent of the purchase price or $1,000, whichever is more, as punitive damages.
E) The UCC does not address punitive damages, other than voiding liquidated damages that are punitive in nature.

Correct Answer

verified

Show Answer

A) That Abbott industries was liable for the cost of the recall and destruction of the defective medication, for the costs of employee overtime, and for lost future sales because Altana was unable to meet its contractual obligations.
B) That Abbott industries was liable for the cost of the recall and destruction of the defective medication, for the costs of employee overtime, and for lost future sales even though Altana was able to meet its contractual obligations.
C) That Abbott industries was liable for the cost of the recall and destruction of the defective medication and for the costs of employee overtime, but not for lost future sales because Altana was able to meet its contractual obligations.
D) That Altana was only entitled to receive cover, meaning substitution for the defective medication.
E) That Altana was unable to recover anything because business people take a risk that some shipments will be bad.

Correct Answer

verified

Show Answer

A) No because withholding delivery is never appropriate.
B) No because filing a lawsuit is required before withholding delivery.
C) No because withholding delivery 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 withholding an order in the event of a breach.
E) Yes, because the UCC allows a seller to withhold delivery when a buyer breaches the contract.

Correct Answer

verified

Show Answer

Correct Answer

verified

Show Answer

A) Parties to a commercial sales agreement may provide for remedies in addition to those provided by the UCC.
B) Parties to a commercial sales agreement may not provide for remedies in addition to those provided by the UCC.
C) Parties to a commercial sales agreement may provide for remedies in addition to those provided by the UCC only if both sides are represented by an attorney.
D) Parties to a commercial sales agreement may provide for remedies in addition to those provided by the UCC only if both parties are merchants.
E) Parties to a commercial sales agreement may provide for remedies in addition to those provided by the UCC only in transactions involving over $10,000 in value.

Correct Answer

verified

Show Answer

A) 7 days
B) 15 days
C) 30 days
D) 10 days
E) 60 days

Correct Answer

verified

Show Answer

A) They are generally the same as lemon laws in the U.S.
B) They allow for replacement of defective parts but do not provide for a new car unless the plaintiff agrees to pay the difference between the amount received for the used car when sold and the amount charged for the new car.
C) They guarantee a buyer of a lemon car a new car and allow for punitive damages.
D) They guarantee the buyer of a lemon a return of all consideration an allow punitive damages.
E) Canada does not have a lemon law such as we have in the U.S.

Correct Answer

verified

Show Answer

A) No because reclaiming the goods is permitted only if the quantity shipped is a large shipment.
B) No because filing a lawsuit is required before reclaiming the goods.
C) No because reclaiming the goods 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 reclaiming the goods in the event of a breach.
E) Yes, the UCC permits a seller to reclaim goods from an insolvent buyer.

Correct Answer

verified

E

Correct Answer

verified

In obtaining cover, the buyer must (1) d...

View Answer

Show Answer

A) Buyers and lessees are allowed to do so in order to receive the benefit of the bargain, but they must give the seller/lessor reasonable notice of the defect.
B) Buyers and lessees are allowed to do so in order to receive the benefit of the bargain, and there is no requirement that they give the seller/lessor prior notice of the defect.
C) Buyers may do so in order to receive the benefit of the bargain so long as reasonable notice of the defect is given, but lessees may not.
D) Lessors may do so in order to receive the benefit of the bargain so long as reasonable notice of the defect is given, but sellers may not.
E) Buyers and lessees may do so only if the seller/lessor agrees to the retention of the nonconforming goods and does not request their return.

Correct Answer

verified

Show Answer

A) None because he chose to sell the goods.
B) None because he did not notify Miguel before selling the fireplaces to someone else.
C) None because Miguel did not agree to allow him to sell the fireplaces to Phillip.
D) He can sue Miguel for the entire amount Miguel was supposed to pay for the fireplaces.
E) He can sue Miguel for $500, the difference between the resale price and the contract price.

Correct Answer

verified

Show Answer

Correct Answer

verified

Show Answer

A) Demonstrate good faith in obtaining the substitute goods.
B) Pay a reasonable amount for the substitute goods
C) Ensure the goods are identical to the original goods
D) Act without unreasonable delay in purchasing the substitute goods
E) Purchase goods that are reasonable substitutes

Correct Answer

verified

Show Answer

A) Incidental damages but not consequential damages or remedial damages
B) Consequential damages but not incidental damages or remedial damages
C) Remedial damages but not consequential damages or incidental damages
D) Incidental damages and consequential damages, but not remedial damages
E) Incidental damages, consequential damages, and remedial damages

Correct Answer

verified

D

A) A suit for incidental damages
B) Resale
C) Liquidated damages
D) Cover
E) A suit for consequential damages

Correct Answer

verified

Show Answer