Question 1

Unless the seller has agreed to extend credit to the buyer, the buyer must pay for the goods at the time they are delivered.

Accepted Answer

A) True 
 B)False

Question 2

If the seller fails or refuses to deliver the goods called for in the contract, the buyer can purchase substitute goods; this is known as rescission.

Accepted Answer

A) True 
 B)False

Question 3

An injured buyer can recover consequential damages when a seller breaches a contract if the:

Accepted Answer

A)   expenses incurred during storage of goods do not conform to those called for in the contract.
B)   buyer purchases goods that have a higher market price than the contract price in the breached contract.
C)   goods are not consumer products.
D)   buyer can show that the damage could not have been prevented by obtaining substitute goods.E) B) and D)
F) A) and D)

Question 4

When a seller makes a profit from the resale of goods after a buyer breaches a contract, the seller:

Accepted Answer

A)   may keep the profits.
B)   must share the profit with the buyer who breached the contract.
C)   must pay incidental damages to the buyer.
D)   may not recover incidental damages from the profits.E) B) and C)
F) A) and D)

Question 5

The amount of liquidated damages is considered reasonable if it is not so large as to be a penalty or so small as to be unconscionable.

Accepted Answer

A) True 
 B)False

Question 6

What is the statute of limitations period for a lawsuit for breach of a sales contract? Does the Uniform Commercial Code (UCC) allow buyers and sellers to shorten or lengthen the statute of limitations period?

Accepted Answer

The Uniform Commercial Code (UCC) provid...

Question 7

A buyer whose seller breaks the contract may recover punitive damages based on three times the difference between the contract price and the current market price of the goods.

Accepted Answer

A) True 
 B)False

Question 8

When goods are defective and the buyer provides the seller with notice, which of the following remedies is applicable?

Accepted Answer

A)   The buyer is entitled to only consequential damages.
B)   The buyer can claim only incidental damages.
C)   The buyer can recover the difference between the value of the goods received and the value the goods would have had if they had been as warranted.
D)   The buyer cannot recover damages and can only get the reimbursement amount that the seller thinks is reasonable.E) A) and B)
F) C) and D)

Question 9

Which of the following statements is true of consequential damages?

Accepted Answer

A)   Liability for consequential damages cannot be excluded by an agreement between the parties.
B)   A limitation on the liability for consequential damages cannot be enforced if it is unconscionable.
C)   Consequential damages do not involve the recovery of damages caused by consumer goods.
D)   Exclusion of or limitation on consequential damages is permitted where the loss is not commercial.E) A) and B)
F) B) and D)

Question 10

Sam contracted with Roadies Garage for customized pink seat covers on a new Porsche intended as a gift to his fiancé. Two days before the delivery was due, Sam broke off his engagement and told Roadies Garage that he was no longer interested in getting the seat covers. Which of the following is the most reasonable course of action that Roadies Garage can take?

Accepted Answer

A)   It should coerce Sam into buying the covers.
B)   It should start a line of pink seat covers so that they have more to sell.
C)   It should complete manufacture anyway and hope that Sam changes his mind.
D)   It should sell the uncompleted covers for their scrap or salvage value.E) B) and C)
F) A) and C)

Question 11

On May 1, Fred agreed to sell and deliver 1,000 bushels of wheat to a baker for $7 per bushel. After the market price of wheat rose to $8 per bushel, Fred breached the contract by refusing to sell a bushel of wheat at $7. He demanded that the baker pay $8.50 per bushel of wheat. If the baker can get substitute wheat at the current market price, can he get specific performance? If not, what options are available to him if he seeks damages for breach of contract from Fred? What will he recover under each option?

Accepted Answer

The baker cannot get specific performanc...

Question 12

What are liquidated damages?

Accepted Answer

The buyer and seller may provide their o...

Question 13

The objective of providing remedies for the breach of a sales contract is to:

Accepted Answer

A)   punish or penalize the party responsible for breaching the contract.
B)   encourage parties to rely on trade practices rather than express terms.
C)   put the injured person in the same position as if the contract has been performed.
D)   encourage parties to rely on oral contracts rather than written contracts.E) None of the above
F) A) and B)

Question 14

When a seller breaches a contract, the buyer may:

Accepted Answer

A)   buy other goods and recover damages from the seller based on additional expense incurred in obtaining the goods.
B)   obtain specific performance only if the goods are not unique and can be found elsewhere.
C)   not recover consequential damages.
D)   legally sue the seller into performing if the seller repudiated the contract based on the buyer's insolvency.E) None of the above
F) A) and B)

Question 15

If the buyer and seller have an agreement for liquidated damages, and the seller justifiably withheld delivery of the goods because of the buyer's breach, the buyer is entitled to recover:

Accepted Answer

A)   any money or goods he has delivered to the seller over and above the agreed amount of liquidated damages.
B)   an amount in excess of $500 or 20 percent of the value of total performance.
C)   any money or goods he has delivered to the seller only to the agreed amount of liquidated damages.
D)   an amount in excess of $1,000 or 20 percent of the value of total performance or whichever amount is higher.E) A) and B)
F) A) and C)

Question 16

If the parties agree on the amount of damages that will be paid to the injured party, this amount is known as _____.

Accepted Answer

A)   liquidated damages
B)   registration expenses
C)   consequential damages
D)   remedial agreementsE) A) and B)
F) B) and C)

Question 17

If a buyer accepts defective goods and wants to hold the seller liable, the buyer must give the seller notice of the defect:

Accepted Answer

A)   only in writing.
B)   within a reasonable time after detecting the defect.
C)   within the same financial year of the purchase.
D)   when the contract is made.E) B) and C)
F) All of the above

Question 18

_____ damages for a seller include storage charges and sales commissions.

Accepted Answer

A)   Intentional
B)   Incidental
C)   Liquidated
D)   UnconscionableE) A) and B)
F) A) and C)

Question 19

An injured buyer is able to recover consequential damages even if he could have prevented the damage by obtaining substitute goods.

Accepted Answer

A) True 
 B)False

Question 20

Nominal damages include expenses the buyer incurs in receiving, inspecting, transporting, and storing goods shipped by the seller that do not conform with those called for in the contract.

Accepted Answer

A) True 
 B)False

Exam 22: Remedies for Breach of Sales Contracts

Correct Answer
verified

An injured buyer can recover consequential damages when a seller breaches a contract if the:

Correct Answer
verified

Correct Answer
verified
The baker cannot get specific performanc...
View Answer

A buyer whose seller breaks the contract may recover punitive damages based on three times the difference between the contract price and the current market price of the goods.

Correct Answer
verified

_____ damages for a seller include storage charges and sales commissions.

Correct Answer
verified

Which of the following statements is true of consequential damages?

Correct Answer
verified

What are liquidated damages?

Correct Answer
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The buyer and seller may provide their o...
View Answer

When a seller breaches a contract, the buyer may:

Correct Answer
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Unless the seller has agreed to extend credit to the buyer, the buyer must pay for the goods at the time they are delivered.

Correct Answer
verified

Nominal damages include expenses the buyer incurs in receiving, inspecting, transporting, and storing goods shipped by the seller that do not conform with those called for in the contract.

Correct Answer
verified

When goods are defective and the buyer provides the seller with notice, which of the following remedies is applicable?

Correct Answer
verified

When a seller makes a profit from the resale of goods after a buyer breaches a contract, the seller:

Correct Answer
verified

The amount of liquidated damages is considered reasonable if it is not so large as to be a penalty or so small as to be unconscionable.

Correct Answer
verified

If a buyer accepts defective goods and wants to hold the seller liable, the buyer must give the seller notice of the defect:

Correct Answer
verified

If the seller fails or refuses to deliver the goods called for in the contract, the buyer can purchase substitute goods; this is known as rescission.

Correct Answer
verified

The objective of providing remedies for the breach of a sales contract is to:

Correct Answer
verified

If the buyer and seller have an agreement for liquidated damages, and the seller justifiably withheld delivery of the goods because of the buyer's breach, the buyer is entitled to recover:

Correct Answer
verified

If the parties agree on the amount of damages that will be paid to the injured party, this amount is known as _____.

Correct Answer
verified

What is the statute of limitations period for a lawsuit for breach of a sales contract? Does the Uniform Commercial Code (UCC) allow buyers and sellers to shorten or lengthen the statute of limitations period?

Correct Answer
verified
The Uniform Commercial Code (UCC) provid...
View Answer

An injured buyer is able to recover consequential damages even if he could have prevented the damage by obtaining substitute goods.

Correct Answer
verified

Exam 22: Remedies for Breach of Sales Contracts

Correct AnswerverifiedShow Answer

An injured buyer can recover consequential damages when a seller breaches a contract if the:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe baker cannot get specific performanc...View AnswerShow Answer

A buyer whose seller breaks the contract may recover punitive damages based on three times the difference between the contract price and the current market price of the goods.

Correct AnswerverifiedShow Answer

_____ damages for a seller include storage charges and sales commissions.

Correct AnswerverifiedShow Answer

Which of the following statements is true of consequential damages?

Correct AnswerverifiedShow Answer

What are liquidated damages?

Correct AnswerverifiedThe buyer and seller may provide their o...View AnswerShow Answer

When a seller breaches a contract, the buyer may:

Correct AnswerverifiedShow Answer

Unless the seller has agreed to extend credit to the buyer, the buyer must pay for the goods at the time they are delivered.

Correct AnswerverifiedShow Answer

Nominal damages include expenses the buyer incurs in receiving, inspecting, transporting, and storing goods shipped by the seller that do not conform with those called for in the contract.

Correct AnswerverifiedShow Answer

When goods are defective and the buyer provides the seller with notice, which of the following remedies is applicable?

Correct AnswerverifiedShow Answer

When a seller makes a profit from the resale of goods after a buyer breaches a contract, the seller:

Correct AnswerverifiedShow Answer

The amount of liquidated damages is considered reasonable if it is not so large as to be a penalty or so small as to be unconscionable.

Correct AnswerverifiedShow Answer

If a buyer accepts defective goods and wants to hold the seller liable, the buyer must give the seller notice of the defect:

Correct AnswerverifiedShow Answer

If the seller fails or refuses to deliver the goods called for in the contract, the buyer can purchase substitute goods; this is known as rescission.

Correct AnswerverifiedShow Answer

The objective of providing remedies for the breach of a sales contract is to:

Correct AnswerverifiedShow Answer

If the buyer and seller have an agreement for liquidated damages, and the seller justifiably withheld delivery of the goods because of the buyer's breach, the buyer is entitled to recover:

Correct AnswerverifiedShow Answer

If the parties agree on the amount of damages that will be paid to the injured party, this amount is known as _____.

Correct AnswerverifiedShow Answer

What is the statute of limitations period for a lawsuit for breach of a sales contract? Does the Uniform Commercial Code (UCC) allow buyers and sellers to shorten or lengthen the statute of limitations period?

Correct AnswerverifiedThe Uniform Commercial Code (UCC) provid...View AnswerShow Answer

An injured buyer is able to recover consequential damages even if he could have prevented the damage by obtaining substitute goods.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
verified
The baker cannot get specific performanc...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The buyer and seller may provide their o...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The Uniform Commercial Code (UCC) provid...
View Answer

Correct Answer
verified