Question 1

How does the basic premise of contract law differ from tort law?

Accepted Answer

A)   Contract actions are intended to allow the government to impose penalties for failure to follow contracts; tort law is intended to allow private individuals to impose penalties on each other for failure to fulfill a bargain.
B)   Tort actions are intended to allow the government to impose penalties; contract law is intended to allow private individuals to impose penalties on each other for failure to fulfill a bargain.
C)   Contract actions are created to enforce the intentions of parties to an agreement; tort law is primarily designed to vindicate social policy
D)   Tort actions are created to enforce the intentions of parties to an agreement; contract law is primarily designed to vindicate social policy
E)   Tort law and contract law have the same basic premiseF) B) and C)
G) A) and E)

Question 2

How are the obligations of sellers/lessors and buyers/lessees are determined?

Accepted Answer

A)   The obligations of the parties are determined by the terms the parties outline in agreements, but not by custom or rules outlined by the UCC.
B)   The obligations of the parties are determined by the rules outlined by the UCC, but not by terms the parties outline in agreements or by custom.
C)   The obligations of the parties are determined by terms the parties outline in agreements and rules outlined by the Uniform Commercial Code, but not by custom.
D)   The obligations of the parties are determined by the rules outlined by the UCC and by custom, but not by terms the parties outline in agreements.
E)   The obligations of the parties are determined by the terms the parties outline in agreements, custom, and rules outlined by the UCC.F) A) and D)
G) C) and D)

Question 3

Which statement is true regarding the availability of liquidated damages in China?

Accepted Answer

A)   Liquidated damages are not available in China.
B)   Through judicial mandate, China adopted the U.S. standard for the award of liquidated damages.
C)   Liquidated damages are available under the People's Republic of China Contract Law legislation, but only in amounts of up to 20% of the actual damages incurred by the breaching party.
D)   Liquidated damages are available under the People's Republic of China Contract Law legislation, but Chinese judicial interpretation of the law limits liquidated damages to no more than 10 percent above the actual damages incurred by the nonbreaching party.
E)   Liquidated damages are available under the People's Republic of China Contract Law legislation, but Chinese judicial interpretation of the law limits liquidated damages to no more than 30 percent above the actual damages incurred by the nonbreaching party.F) B) and C)
G) A) and E)

Question 4

When may a lessor seek incidental damages in the event of a breach by a lessee of goods?

Accepted Answer

A)   A lessor may seek incidental damages only if the lessee agreed in writing to pay them.
B)   A lessor may seek incidental damages only if the lessee agreed orally or in writing to pay them.
C)   A lessor may seek incidental damages only if the damages are in an amount over $500.
D)   A lessor may seek incidental damages only if the damages are in an amount over $1,000.
E)   A lessor may seek incidental damages whenever the lease is breached.F) A) and E)
G) A) and D)

Question 5

A buyer may seek damages even if the buyer has accepted nonconforming goods.

Accepted Answer

A) True 
 B)False

Question 6

What statute of limitations applies to claims under the UCC seeking damages for personal injury sustained as a result of a breach of warranty?

Accepted Answer

A)   The four-year statute of limitations under the UCC
B)   The two-year statute of limitations under the UCC
C)   The three year statute of limitations under tort law
D)   Either the tort or UCC statute of limitations, whichever is longer
E)   There is no statute of limitations for these casesF) A) and B)
G) C) and D)

Question 7

What if a liquidated damage clause is punitive in nature?

Accepted Answer

A)   The UCC allows punitive liquidated damage clauses but common law does not.
B)   The UCC allows punitive liquidated damages as long as the parties negotiated in good faith to include a liquidated damages clause.
C)   The UCC allows punitive liquidated damages only in contracts for sale, but not lease contracts.
D)   The UCC allows punitive liquidated damages if there were lost profits.
E)   Courts will not enforce the liquidated damage clause if it is punitive in nature.F) A) and B)
G) C) and E)

Question 8

If the buyer fails to pay according to the terms of the agreement, which of the following remedies is available to the seller without court action?

Accepted Answer

A)   Sellers may cancel the contract as their only remedy.
B)   sellers may cancel the contract and withhold delivery of goods; but sellers may not sell undelivered goods to another buyer or sue for damages.
C)   Sellers may cancel the contract; but sellers may not withhold delivery of goods or sell undelivered goods to another buyer.
D)   Sellers withhold delivery of goods or sell undelivered goods to another buyer but cannot cancel the contract.
E)   Sellers may cancel the contract, withhold delivery of goods, or sell the goods to another buyer.F) B) and E)
G) A) and C)

Question 9

The UCC outlaws a statute of limitations for bringing a lawsuit arising under a breach of contract for a sale of goods.

Accepted Answer

A) True 
 B)False

Question 10

________ refers to the right of a buyer and lessee to substitute goods for those due under a sales or lease agreement.

Accepted Answer

A)   Switch
B)   Reallocate
C)   Shift
D)   Cover
E)   RealignF) None of the above
G) A) and E)

Question 11

Patty, a buyer, breaches her contract with Joanna. Joanna resells the goods to Shaun after Patty breaches the contract, who gets to keep any profits made on the resale?

Accepted Answer

A)   Joanna.
B)   Patty.
C)   Joanna and Patty split the profits.
D)   It depends on the contract.
E)   The UCC prohibits making profits on resold goods after a breach of contract.F) D) and E)
G) C) and D)

Question 12

Which statement is true regarding a liquidated damages clause?

Accepted Answer

A)   A provision for liquidated damages is illegal.
B)   A provision for liquidated damages is void because of public policy.
C)   A provision for liquidated damages is voidable because of public policy.
D)   A provision for liquidated damages is enforceable so long as it is not punitive in nature.
E)   A provision for liquidated damages will be enforced regardless of whether it is punitive in nature.F) A) and E)
G) B) and D)

Question 13

If the seller or lessor has delivered goods to a carrier or bailee, but the carrier or bailee has not yet turned the goods over to the buyer, the goods are said to be "in transit."

Accepted Answer

A) True 
 B)False

Question 14

To effectuate the expectations of the parties to an agreement is the ________

Accepted Answer

A)   basic premise of contract law.
B)   reason behind contract law, to promote commerce
C)   reason behind contract law, to promote economic growth
D)   reason behind contract law, to promote interstate commerce
E)   reason behind contract law, to encourage a free-market society and greater financial security for the partiesF) B) and E)
G) A) and C)

Question 15

Miguel, a buyer becomes insolvent and has breached his contract by not paying for goods that are in transit. Which of the following statements is true?

Accepted Answer

A)   The carrier may stop delivery on the entire shipment.
B)   The carrier may stop delivery only if the quantity shipped is a large shipment such as a carload or truckload and can easily be stopped.
C)   The carrier may stop delivery only if a signed writing exists by which the buyer agreed to the remedy of stopping shipment in a liquidated damages clause.
D)   The carrier may stop delivery only if ordered to do so by the bankruptcy judge.
E)   The carrier may not stop delivery under any circumstances.F) A) and B)
G) C) and D)

Question 16

[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 sell the furniture he initially purchased?

Accepted Answer

A)   Luke is correct. Maya had no right to sell 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 resell 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) C) and D)
G) B) and D)

Question 17

Fred's Fireplaces enters into a contract with Miguel's Patio Supply in which Miguel's agrees to purchase 20 fireplaces. Fred does not deliver the fireplaces,so Miguel purchases fireplace from Joe's Chimney's instead. Joe's charges significantly above market rate, but Miguel pays anyway because Miguel intends to sue Fred for the difference. Did Miguel act appropriately?

Accepted Answer

A)   No because obtaining substitute goods is permitted only if the quantity shipped is large.
B)   No because Miguel did not act in good faith and he overpaid for the goods.
C)   No because obtaining substitute goods in the event of breach is appropriate only if the contract is for at least 50 units of goods.
D)   No, because the UCC requires buyers to notify sellers before obtaining substitute goods.
E)   Yes, because a buyer can always cover, even at an unreasonable price.F) A) and E)
G) A) and D)

Question 18

Discuss the steps that may be taken when a buyer or lessee is in breach and the goods have not yet been delivered. Also discuss the damages a seller and lessor may recover.

Accepted Answer

Sellers or lessors are allowed to sell t...

Question 19

What does the UCC say regarding a limitation of consequential damages for injury to the person in the case of consumer goods?

Accepted Answer

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

Question 20

[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 any right of Maya to recover the additional advertising fees she incurred from Luke?

Accepted Answer

A)   She is entitled to recover the damages only if she can show that Luke agreed to pay such damages in his contract with her.
B)   She is not entitled to recover the damages because she had no right to resell the furniture.
C)   She is entitled to recover the damages only if she can show that Luke has a history of breaching contracts of sale.
D)   She cannot recover the damages because consumer goods are involved.
E)   Maya will be able to recover the damages so long as they were reasonably incurred because of Luke's breach.F) C) and D)
G) B) and C)

Exam 24: Remedies for Breach of Sales and Lease Contracts

If the buyer fails to pay according to the terms of the agreement, which of the following remedies is available to the seller without court action?

Correct Answer
verified

Miguel, a buyer becomes insolvent and has breached his contract by not paying for goods that are in transit. Which of the following statements is true?

Correct Answer
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Correct Answer
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Patty, a buyer, breaches her contract with Joanna. Joanna resells the goods to Shaun after Patty breaches the contract, who gets to keep any profits made on the resale?

Correct Answer
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The UCC outlaws a statute of limitations for bringing a lawsuit arising under a breach of contract for a sale of goods.

Correct Answer
verified

Correct Answer
verified

Which statement is true regarding the availability of liquidated damages in China?

Correct Answer
verified

Which statement is true regarding a liquidated damages clause?

Correct Answer
verified

What statute of limitations applies to claims under the UCC seeking damages for personal injury sustained as a result of a breach of warranty?

Correct Answer
verified

How are the obligations of sellers/lessors and buyers/lessees are determined?

Correct Answer
verified

How does the basic premise of contract law differ from tort law?

Correct Answer
verified

To effectuate the expectations of the parties to an agreement is the ________

Correct Answer
verified

What does the UCC say regarding a limitation of consequential damages for injury to the person in the case of consumer goods?

Correct Answer
verified

Correct Answer
verified

________ refers to the right of a buyer and lessee to substitute goods for those due under a sales or lease agreement.

Correct Answer
verified

When may a lessor seek incidental damages in the event of a breach by a lessee of goods?

Correct Answer
verified

What if a liquidated damage clause is punitive in nature?

Correct Answer
verified

If the seller or lessor has delivered goods to a carrier or bailee, but the carrier or bailee has not yet turned the goods over to the buyer, the goods are said to be "in transit."

Correct Answer
verified

A buyer may seek damages even if the buyer has accepted nonconforming goods.

Correct Answer
verified

Discuss the steps that may be taken when a buyer or lessee is in breach and the goods have not yet been delivered. Also discuss the damages a seller and lessor may recover.

Correct Answer
verified
Sellers or lessors are allowed to sell t...
View Answer

Exam 24: Remedies for Breach of Sales and Lease Contracts

If the buyer fails to pay according to the terms of the agreement, which of the following remedies is available to the seller without court action?

Correct AnswerverifiedShow Answer

Miguel, a buyer becomes insolvent and has breached his contract by not paying for goods that are in transit. Which of the following statements is true?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Patty, a buyer, breaches her contract with Joanna. Joanna resells the goods to Shaun after Patty breaches the contract, who gets to keep any profits made on the resale?

Correct AnswerverifiedShow Answer

The UCC outlaws a statute of limitations for bringing a lawsuit arising under a breach of contract for a sale of goods.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which statement is true regarding the availability of liquidated damages in China?

Correct AnswerverifiedShow Answer

Which statement is true regarding a liquidated damages clause?

Correct AnswerverifiedShow Answer

What statute of limitations applies to claims under the UCC seeking damages for personal injury sustained as a result of a breach of warranty?

Correct AnswerverifiedShow Answer

How are the obligations of sellers/lessors and buyers/lessees are determined?

Correct AnswerverifiedShow Answer

How does the basic premise of contract law differ from tort law?

Correct AnswerverifiedShow Answer

To effectuate the expectations of the parties to an agreement is the ________

Correct AnswerverifiedShow Answer

What does the UCC say regarding a limitation of consequential damages for injury to the person in the case of consumer goods?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

________ refers to the right of a buyer and lessee to substitute goods for those due under a sales or lease agreement.

Correct AnswerverifiedShow Answer

When may a lessor seek incidental damages in the event of a breach by a lessee of goods?

Correct AnswerverifiedShow Answer

What if a liquidated damage clause is punitive in nature?

Correct AnswerverifiedShow Answer

If the seller or lessor has delivered goods to a carrier or bailee, but the carrier or bailee has not yet turned the goods over to the buyer, the goods are said to be "in transit."

Correct AnswerverifiedShow Answer

A buyer may seek damages even if the buyer has accepted nonconforming goods.

Correct AnswerverifiedShow Answer

Discuss the steps that may be taken when a buyer or lessee is in breach and the goods have not yet been delivered. Also discuss the damages a seller and lessor may recover.

Correct AnswerverifiedSellers or lessors are allowed to sell t...View AnswerShow Answer

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Sellers or lessors are allowed to sell t...
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