Q&A Hero

Q: The parties' agreement on the amount of damages to be paid, if one of them breaches their contract, will not be enforced if the amount named is unreasonable.

Q: Which of the following implies that the seller must make the goods available to the buyer during reasonable hours and for a reasonable period of time so that the buyer can take possession of the goods? A. Tender of payment B. Notification C. Acceptance D. Tender of delivery

Q: "COD" stands for: A. cash on delivery. B. cargo on date. C. certificate of deposit. D. cash on details.

Q: If there is no agreement between the parties for delivery to happen in installments, then all the goods: A. should be delivered in "reasonably spaced" intervals. B. must be delivered to the buyer in a single delivery. C. may be delivered in installments as the seller dictates. D. must be delivered as the buyer dictates.

Q: If a buyer and seller do not agree on where the goods are to be delivered, where would the goods be delivered to? A. The seller's place of business B. The seller's house, even if the seller has a place of business C. The distributor D. The buyer has to collect it from the seller's place of business

Q: Under a contract that does not require the seller to deliver the goods to the buyer's place of business but merely to ship the goods to the buyer, the seller: A. is required to put the goods into the possession of a carrier such as a trucking company or a railroad. B. is not required to notify the buyer of the shipment, as it is the duty of the carrier to bear for any material delay or loss in the process. C. is required to deliver the goods personally to the buyer's place of business. D. is not required to make a contract with the carrier, as the seller's duty ends after he delivers the goods safely to the carrier.

Q: If the goods required for the performance of a contract are destroyed without fault of either party prior to the time the risk of loss passed to the buyer, then the contract is voided.

Q: In a conflict between the express terms of the contract and trade usage: A. trade usage prevails. B. express terms prevail. C. the contract is invalid. D. implied terms prevail.

Q: ABC Builders and XYZ Lumber had a contract, calling for XYZ Lumber to deliver a certain quantity of bricks to ABC's place of business on the first of every month for one year. The contract also said that any modifications had to be made in writing. XYZ delivered the bricks one week late for the first six months but ABC did not object. When XYZ delivered the bricks late in the seventh month, ABC attempted to cancel the contract. What is the result? A. There has been an assignment of the contract. B. The contract has been modified. C. XYZ is not in breach because delivery should have been made at XYZ's place of business. D. ABC has waived its right to cancel the contract.

Q: Once a party has waived rights to a portion of a contract that has not yet been performed, that party: A. may not retract the waiver later. B. may retract the waiver unconditionally. C. may retract the waiver by giving reasonable notice. D. may retract the waiver within 24 hours.

Q: A contract calls for a farmer to send apples growing at his farm to the fruit market every Monday and he promptly sends them fresh stock of apples every Monday as per the contract. If the fruit market does not pay cash but rather sends a check the following week then: A. the farmer can object if he may want to rely on the late payment for canceling the contract, but can do this only after six months of the contract period. B. the farmer cannot object under any circumstances. C. the farmer must object if he may want to rely on the late payment as grounds for later canceling the contract. D. the farmer can object only if he has not been paid for the apples he delivered.

Q: Under the UCC, only the buyer can demand assurance from the seller that the contract will be performed. If such assurances are not given within 30 days, then the seller is considered to have repudiated the contract.

Q: Once made, anticipatory repudiation can never be withdrawn.

Q: A buyer has the right to retain goods, even if the bank refuses to pay the buyer's check.

Q: By accepting goods, the buyer forfeits remedies against the seller for any nonconformities in the goods.

Q: A buyer can accept only part of a commercial unit, without accepting the whole unit.

Q: If a buyer has a basis for rejecting a delivery of goods, the buyer must act within a reasonable time, but does not need to give the seller notice of rejection.

Q: If the buyer wrongfully rejects goods, he is liable to the seller for breach of the sales contract.

Q: In a COD contract, the buyer may fully inspect the goods before accepting them.

Q: Under the UCC, the duties of either the buyer or the seller generally may be delegated to someone else.

Q: The basic duty of the seller is to deliver the goods called for by the contract.

Q: Goods may be delivered in installments, even if not stated so in the contract.

Q: If the buyer does not have a place of business, delivery is to be made to the buyer's home.

Q: Can a buyer reject goods for nonconformity in contracts that call for delivery of the goods in separate installments? If yes, under what circumstances can he reject such goods?

Q: PC Corp. entered into a contract with Easy University to supply the school with 500 PCs for use in its new computer facility. A week before the PCs were to be delivered, Easy University called PC Corp. and said that it would not go through with the purchase. Is PC Corp. obligated to deliver the PCs as required by the contract? Why or why not?

Q: When the express terms of a contract and the past course of dealings are in conflict, the express terms will prevail.

Q: A party who has waived rights to a portion of the contract not yet performed may retract the waiver.

Q: Peds, a wholesale shoe distributor, ordered a quantity of shoes from Ma Industries. When Peds received the shipment, it discovered that all of the shoes were cracked and peeling. Peds contacted Ma and stated that it was rejecting the shipment because the shoes were defective. Peds wanted to ship the shoes back to Ma but received no communication from Ma regarding what was to be done with the shipment. Peds did not pay the remainder owed for the shipment and stopped payment on the check that had been initially issued for the order. Subsequently, Peds had the shoes refinished by another company and distributed and sold the shoes. Ma sued for the value of the shipment. Did Peds accept the shipment of shoes and owe Ma for the goods?

Q: If a buyer becomes concerned that the seller may not be able to perform required contract obligations: A. he may not assign his contract rights under the contract. B. he may demand assurance from the other party that the contract will be performed. C. he may refuse to perform the contract under the doctrine of commercial impracticability. D. he may be excused from performance under the doctrine of impossibility.

Q: The doctrine that permits a party to suspend its performance under a contract when the other party repudiates the contract is known as: A. anticipatory repudiation. B. revocation. C. voidance. D. breach.

Q: Campus Bus Service entered into a contract with Smith Bus Company to purchase 10 buses. One week before Campus Bus was scheduled to receive the buses, a fire destroyed Smith's warehouse and the buses inside. As a result, Campus Bus had to purchase its buses at a higher cost from another manufacturer. If Campus Bus sues Smith Bus for damages for breach of contract under these circumstances, what defense, if any, does Smith Bus have? Assume Campus Bus did not bear the risk of loss of the goods under the contract. A. Smith Bus should not be excused from performance because it should be ready with contingency plans or options for all unforeseeable events. B. Smith Bus should not be excused because it did not act in good faith. C. Smith Bus should be excused from performance under the doctrine of commercial impracticability because the fire was an unforeseen event that made it impossible for Smith to perform its contractual obligations. D. Smith Bus is guilty of anticipatory repudiation.

Q: The Code rule that determines when, a person is excused from performing, uses the test of: A. impossibility. B. commercial impracticability. C. proximate causes. D. concurrent causes.

Q: What does it mean to require parties to act in "good faith" in the performance of a sales contract? Explain and provide an example.

Q: Spudz, an Iowa corporation, agreed to sell Bob two carloads of potatoes at "$5 per sack, FOB Iowa shipping point." Spudz had the potatoes put aboard the railroad cars; however, it did not have floor racks used in the cars under the potatoes as is customary during winter months. As a result, there was no warm air circulating and the potatoes were frozen while in transit. Spudz claims that its obligations ended with the delivery to the carrier and that the risk of loss was on Bob. What argument would you make for Bob?

Q: When the seller does not give the buyer instructions concerning the disposal of the goods upon rejection and whether the goods are not perishable, the buyer: A. can resell the goods for the seller, but cannot keep a commission on the sale. B. cannot reship them to the seller without the seller's instructions. C. can resell them for the buyer's benefit. D. can give reasonable time for the seller to reclaim the goods.

Q: Which of the following is one of the options of a buyer when the goods delivered do not conform to the contract? A. The buyer can pay for the units accepted at a price lower to the price per unit provided in the contract. B. The buyer can accept only part of a commercial unit and reject the rest. C. The buyer can reject an installment delivery even if the nonconformity can be corrected by the seller. D. The buyer can accept all of the goods, or accept any commercial unit, and reject the rest.

Q: Jay, the owner of a cosmetic store, orders 20 bottles of face cream and 30 bottles of face cleansing cream. After the consignment is delivered, he discovers that he has received 10 bottles of face wash and 10 bottles of face cleansing cream. Jay: A. can accept and avoid payment for the face cleansing cream. B. cannot accept nonconforming goods. C. can reject or accept the entire consignment. D. can avoid payment for the face wash which he had not ordered but has accepted.

Q: The seller has the right to cure: A. anytime after the buyer accepts delivery but before the buyer repudiates. B. only once the original time for delivery has expired. C. even if the buyer accepts nonconforming goods. D. if he notifies the buyer about the willingness to cure the improper delivery or tender.

Q: The "right to cure" refers to: A. the seller's right to reship conforming goods in circumstances where the seller had some reason to believe the buyer would accept nonconforming goods. B. the seller's opportunity to reship conforming goods only within the time of delivery. C. the exclusive right, granted by state permit, of certain businesses to reship certain types of items. D. the seller's right to sell nonconforming goods and not replace, when the past shipments were not objected for substitution.

Q: Buyer, who owns a grocery store, orders bananas from a fruit wholesaler. The bananas arrive, but they are much too ripe to sell in the grocery. Buyer rejects the bananas and promptly notifies the fruit wholesaler of his rejection. What are Buyer's responsibilities regarding the rejection of the spoilt goods? A. Buyer must follow any reasonable instructions the seller gives concerning the disposition of the bananas. B. Buyer must make a reasonable effort to sell them on the seller's behalf, but must not expect a reimbursement from the seller. C. Buyer need not state any reasons for the rejection to the seller. D. Buyer must give sufficient notice to the seller and the seller must personally come and collect the goods rejected by the buyer.

Q: A commercial unit is: A. comprised of any unit of goods, even set of articles that is treated by commercial usage as a single whole. B. comprised only of single articles treated by commercial usage as a single whole. C. comprised only of set of articles contained in a commercially recognized measurement (such as a bushel, ton, or truckload). D. comprised of units of articles which can also be accepted as one single article.

Q: Which of the following holds true of revocation of acceptance by the buyer? A. He/she can revoke acceptance when the nonconformity substantially impairs the value of the goods. B. He/she cannot revoke if the buyer accepted the goods because of assurances by the seller. C. He/she can revoke acceptance even after accepting goods with the knowledge of the nonconformity. D. He/she after revoking acceptance will not have the same rights and duties with regard to goods involved as they had rejected them.

Q: Alice purchased a new computer from Compu-Best, a local computer store. She used the computer for a week when the computer began to malfunction. She returned it to the store, where the store manager assured her that he could repair what he called a "minor problem" in the computer. Two months had passed and Alice had already returned the computer five times for repair. Alice finally gave up and demanded her money back. Under these circumstances: A. Alice is not entitled to revoke her acceptance of the goods because she did not reject the goods when she first discovered the defect. B. Alice should be entitled to revoke her acceptance because she accepted the goods because of assurances by the seller that the nonconformity would be cured. C. Alice cannot revoke her acceptance because the value of the computer is impaired by the defect which causes it to malfunction. D. Alice cannot revoke her acceptance but she is entitled to damages for breach of warranty under the UCC.

Q: This occurs when a buyer, after having reasonable opportunity to inspect the goods, either indicates that he will take them or fails to reject them. A. Tender of delivery B. Notification C. Acceptance D. Reasonable contract

Q: Farmer Tom entered into a contract with Jerry's Pickle Company wherein Tom agreed to sell Jerry 500 pounds of cucumbers suitable for processing into pickles. The terms of the sale were cash on delivery. When Jerry received the cucumbers, it was obvious to him without inspection that the cucumbers were too large for processing into pickles. Under these circumstances: A. Jerry may reject the cucumbers, but Jerry must notify Tom of the rejection and follow any reasonable instructions from Tom concerning disposal of the cucumbers. B. Tom may not reject the cucumbers because the terms of the sale were cash on delivery. C. Tom must accept the cucumbers and pay for them, but he may be entitled to reduction in the purchase price as damages for breach of contract. D. even if Tom had some reason to believe Jerry would accept the cucumbers, he cannot cure the breach by reshipping conforming cucumbers to Jerry within a reasonable time.

Q: When a payment is tendered by check, the payment is: A. final. B. conditional. C. unenforceable. D. realized only after the goods are inspected.

Q: Which of the following is a basic obligation or right of the buyer and seller concerning the payment for goods? A. The price of the goods must be paid only in money, else the seller can consider the goods to be rejected by the buyer. B. If there is no agreement for extending credit to the buyer, the buyer must pay for them on delivery. C. If all or part of the price of goods is payable in real property, then both the transfer of goods and real property are covered by the law of sales of goods. D. The buyer has the right to inspect the goods before payment under all circumstances.

Q: Which of the following is true about acceptance of goods by a buyer? A. He must indicate that he/she will take them. B. Failure to reject cannot be assumed as an acceptance. C. He must pay for the goods without inspecting them. D. He must assume the seller to be the owner of the good.

Q: To reject goods, the buyer must: A. notify the seller of the rejection. B. specify the nonconformity after treating the good as his own. C. desist from paying the seller in full. D. never specify the defect to the seller.

Q: When goods are shipped COD: A. the buyer must pay for them before inspecting them. B. the buyer must inspect them before paying for them. C. the buyer may inspect them before paying for them. D. the buyer may reject the goods immediately after inspection.

Q: When a buyer has a right to inspect the goods, the right usually must be exercised: A. before the goods are shipped. B. after paying for them. C. before accepting the goods. D. within 15 days after accepting the goods.

Q: Explain the difference between the implied warranty of merchantability and the warranty of fitness for a particular purpose.

Q: Define the different situations in which courts can hold manufacturers liable for negligence.

Q: Wilma locked herself in the trunk of a 1973 sedan in an attempt to learn a magic trick. After some time, she decided to get out of the trunk, but was unable to do so. She was released nine days later. She subsequently sued the manufacturer of the sedan for the psychological and physical injuries she sustained because the trunk did not have an internal release or opening mechanism that would have allowed her to escape. She alleged that the manufacturer was negligent in its design of the car because it lacked such a mechanism, and negligent because it failed to warn users that the trunk did not have such a mechanism. Was the manufacturer of the sedan negligent for failing to warn, or failing to include a release in its design of the car?

Q: Which of the following is true about statutes of repose? A. This is a significant change in the law for people who are injured by products that cause immediate injury. B. It bars the bringing of a tort-based product liability suit usually after five years from the date the product is first sold to a user. C. People covered by statutes of repose now can bring suit even if their injury is not discovered within the statutory period. D. The tort statute of limitations gives people one or two years from the time they discover their injury in which to bring their suit.

Q: There is an action against a manufacturer who is sued on the basis of industrywide liability for the manufacture and sale of a standardized product that caused injury after a number of years. Which of the following defenses can the manufacturer raise to avoid or minimize its liability? A. The manufacturer should be truthful about the fact that he manufactured the product that caused the injury to the plaintiff. B. It manufactures the product with a disclaimer. C. The risks from its product were lower than those from other products. D. Its market share was more than alleged by the plaintiff.

Q: A statute of repose bars the bringing of a tort-based product liability suit: A. usually after 10 years from the date the product is first sold to a user. B. usually after five years from the date the product is first sold to a user. C. usually after 20 years from the date the product is first sold to a user. D. usually after 50 years from the date the product is first sold to a user.

Q: Irma bought a pint-sized thermos bottle from "Kash N' Karry." After a couple of months of use, she poured coffee into it one morning and was adding some milk when it exploded, sending shards of glass into her face and injuring her eye. Irma testified that she had not dropped the thermos and had not abused it. She sued "Kash N' Karry," claiming, among other things, breach of warranty of merchantability. Under the UCC, was the warranty of merchantability breached?

Q: Jon, a high-school senior, bit into a turkey bone in a bite-sized cube of white turkey meat in his high-school cafeteria. He felt something in his throat and after some effort expelled a small inch bone. He sustained injury to his esophagus and was hospitalized for four days. Jon brought suit against the school, claiming breach of warranty of merchantability in the food served to him in the cafeteria. What test should be applied to determine whether there was a breach of warranty of merchantability because of the presence of a bone in the meal served to Jon?

Q: Jen decides to trim the sides of her hedge with her electric lawn mower and is injured in the process, Jen: A. cannot recover in strict liability because she misused the electric lawn mower. B. can recover in strict liability even though her use of the lawn mower to trim the sides of her hedge was not foreseeable by the manufacturers. C. can recover in strict liability because the lawn mower was per se dangerous. D. cannot sue all market manufacturers of electric lawn mowers, but only the manufacturer she has a contract with for dangerous product design.

Q: Which of the following is true of strict liability? A. All courts will not hold the retailer liable if the manufacturer is available for suit. B. Most states hold that plaintiffs cannot recover for purely economic losses under strict liability. C. No state will allow economic loss recovery even if the defect caused the product to be unreasonably dangerous. D. It is applied only to situations involving the sale of used merchandise.

Q: In determining whether a product is "inherently dangerous" or has been "defectively designed," courts look at: A. whether anything else could have been done to make the product safer, given the practical and technological limitations of the time. B. what other companies in the industry are doing. C. whether the product was grossly overpriced. D. whether the seller can pass on the costs of injuries as higher prices in the market or if they should be borne by the injured person.

Q: Which of the following is an outgrowth of strict product liability? A. Industry wide liability B. Privity C. Negligence D. Product misuse

Q: A consumer who misuses a product: A. may still recover under the theory of strict liability. B. may not recover under the theory of strict liability. C. may recover under the theory of strict liability even if the misuse was not foreseeable. D. cannot recover under the theory of strict liability even if the danger it created was foreseeable.

Q: Under the theory of industrywide liability, when it is impossible to successfully identify the particular manufacturer that caused the harm, courts will: A. apportion liability among manufacturers based on market share. B. make the consumer identify a likely manufacturer in order to expedite the resolution of the claim. C. drop the complaint and call for the legislature to issue new industry laws. D. prohibit further manufacturing of the product.

Q: An increasing number of courts hold that the obvious danger rule: A. is no longer a complete defense. B. is a complete defense. C. is a complete defense only if a warning is issued after a sale. D. is not a complete defense even if a warning is issued after a sale.

Q: It does not matter whether or not the buyer dealt directly with the manufacturer because: A. the obvious danger rule is not used anymore as defense. B. liability based on negligence does not involve a contractual relationship. C. liability based on negligence involves a contractual relationship. D. the obvious danger rule is used as a complete defense.

Q: If a product is inherently dangerous so that no amount of due care could make it safe: A. the manufacturer is required to give the consumer notice of the unreasonable danger. B. privity bars recovery. C. contributory negligence prevents recovery. D. the manufacturer is required to provide the consumer a disclaimer at the time of sale.

Q: Which of the following describes an action where liability of a seller is based on the theory that the manufacturer failed to use reasonable care to avoid foreseeable injury to the ultimate user or consumer? A. Negligence B. Strict liability C. Breach of warranty D. Magnuson-Moss Act

Q: Who among the following has a duty to inspect new, prepackaged goods even if they have no reason to know of a defect? A. Retailers B. Manufacturers C. Distributors D. Wholesalers

Q: In an action for liability based on negligence: A. a contractual relationship is involved and it does matter whether or not the buyer dealt directly with the manufacturer. B. the manufacturer's duty of care extends to all persons who might foreseeably be injured if the manufacturer does not exercise its duty of care. C. disclaimers in contracts are usually effective to shield a manufacturer or seller against liability for negligence to consumers. D. the obvious danger rule can be used for complete defense.

Q: Which of the following requirements must be satisfied by the sellers according to the Magnuson-Moss Warranty Act and the FTC guidelines, when they give a written warranty? A. It should be included in more than one document. B. It should include a clear description of what is covered, but never include what is excluded by the warranty. C. It should include the time the warranty begins and its duration. D. It should allow the seller to choose between a refund and a replacement after the product has been repaired a number of times.

Q: Which of the following statements concerning the Magnuson-Moss Warranty Act is true? A. The act applies to all sellers of a "consumer product" that costs more than $50. B. The act requires a seller of consumer goods to give a written warranty, either full or limited. C. The FTC enforces the disclosure provisions of the warranty act and regulations. D. The act requires a full warranty to have a time limit.

Q: A full warranty means: A. it excludes and limits payments for consequential damages. B. the warrantor will fix or replace any defective product free of charge. C. it has to cover the whole product and not cover only part of the product. D. it is limited in time (say, to one or two years).

Q: Which of the following statements is true of the enforcement of warranties? A. The FTC enforces the disclosure provisions of the warranty act and regulations. B. Consumers cannot sue the maker of the warranty for failure to fulfill its terms. C. The FTC enforces the seller's obligation to make the terms available before or after the sale. D. Consumers can sue the manufacturer if the manufacturer offers the warranty, but not the retailer even if retailer grants warranty.

Q: Privity of contract: A. is the relationship between the parties in a contract. B. is the best defense in case of negligence in action. C. limits the duty of care owed to third-parties. D. states the rights enjoyed by any natural person who is in the household of the buyer.

Q: Which of the following is a purpose of the Magnuson-Moss Warranty Act? A. It provides maximum warranty protection for consumers. B. It increases consumer understanding of warranties. C. It protects all business to business transactions. D. It insists on the sellers compulsorily giving a written warranty to the consumers.

Q: Implied warranties: A. imposed by law are absolute. B. protect the buyer in ownership of the goods bought. C. warrant that the goods are free of any liens or claims of other parties. D. establish responsibility on the seller for the quality of the goods sold.

Q: Which of the following is a test of merchantability for all sales contracts? A. The goods conform to any promises or statements of fact made on the container or label. B. The goods are of different kind, quality, and quantity within each unit. C. The goods need not necessarily be packaged or labeled adequately. D. The goods conforming to the general description of the goods available in the market.

Q: "Fungible goods" are: A. goods which are packaged and labeled separately (such as units which come in cartons or cases). B. mixed goods which are identical and cannot be separated (such as grain or coal). C. perishable goods which have been improperly packaged or which have damaged packaging and are open to contamination. D. goods which conform to any promises or statements of fact made on the container or label.