Question 1

Which of the following 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 awards 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) A) and B)
G) All of the above

Question 2

Which of the following is true regarding whether usage of trade may impose a remedy in the event of a breach?

Accepted Answer

A)   Usage of trade may not impose a remedy in the event of a breach.
B)   Usage of trade may impose a remedy in the event of a breach but it may not impose an exclusive remedy.
C)   Usage of trade may impose an exclusive remedy in the event of a breach.
D)   Usage of trade may impose an exclusive remedy in the event of a breach only if both sides are represented by an attorney.
E)   Usage of trade may impose an exclusive remedy in the event of a breach only if a contract signed by both parties specifically provides as such.F) A) and D)
G) A) and E)

Question 3

List the various options discussed in the text that may be available to a buyer/lessee when the seller/lessor is in breach.

Accepted Answer

When the seller/lessor is in breach, the...

Question 4

"Missed Payments." Robin, who loved water sports and relaxing in hot tubs, purchased a hot tub on an installment plan and was to pay the seller monthly. Her last payment was made on January 2, 2008. After several attempts at collection, the seller brought a lawsuit against her for sums remaining on the account on January 3, 2013. Robin defended on the basis that the statute of limitations had run. The seller claimed, however, that adequate time remained because the UCC applies a flexible statute of limitations; and, at any rate, sellers have at least five years in which to sue. Robin also arranged to purchase a personal watercraft. By contract with the seller, Robin was to pay an initial deposit within 10 days of the sale at which point she could take possession of the watercraft making monthly payments thereafter. Recognizing that a personal watercraft would not allow her to invite all her friends on lake trips, a couple of days after purchasing the personal watercraft, Robin purchased a pontoon boat. Because the seller of the pontoon boat demanded cash, Robin paid the total sales price prior to delivery. Unfortunately, when the pontoon boat was delivered, Robin found that it had a less powerful motor than the seller represented. Robin notified the seller of the problem, but the seller claimed to have no obligation to remedy the problem. Although recognizing that she paid too much for it, Robin decided that since lake season was underway, she would keep the pontoon boat. Because Robin paid full price for the pontoon boat, she was unable to pay within 10 days the deposit on the personal watercraft. The seller refused to deliver the watercraft, and sold it to another customer. Robin informed the seller that the refusal to deliver the watercraft was wrongful and that she was going to exercise her right to cover.

-Which of the following is true regarding Robin's rights, if any, as to the personal watercraft?

Accepted Answer

A)   She has no right to cover although she may sue for damages because, while the UCC allows for installment sales, deposits are not required in the installment sale situation.
B)   She has a right to cover only because she is a consumer, not a merchant.
C)   She has a right to cover only if she pays the initial watercraft seller any amount by which the cost of the watercraft used for cover was lower than the cost of the initial watercraft.
D)   She has no right to cover only because she is a consumer, not a merchant.
E)   She has no right to cover, and the merchant was not required to deliver the personal watercraft.F) C) and D)
G) A) and C)

Question 5

Which of the following was the result on appeal in Detroit Radiant Products Company v. BSH Home Appliances Corporation, the case in the text in which the plaintiff, a seller of gas-fired infrared heaters, sought to recover lost profits based on the defendants breach of contract?

Accepted Answer

A)   The court awarded the plaintiff lost profits based on the fact that lost profits are the default measure of damages under Article 2 of the UCC.
B)   The court awarded the plaintiff the difference between the contract price less the market price plus incidental damages based on the fact that such damages were the default measure of damages under Article 2 of the UCC.
C)   The court awarded the plaintiff lost profits in addition to the difference between the contract price less the market price plus incidental damages based on the fact that all such damages were the default measure of damages under Article 2 of the UCC.
D)   The court awarded the plaintiff the value of the unsellable inventory it had due to the defendant's breach and also lost profits because the default measure (the difference between the contract price less the market price plus incidental damages)  did not make the plaintiff whole.
E)   The court awarded the plaintiff lost profits and also the value of the unsellable inventory it had due to the defendant's breach because the default measure (lost profits)  did not make the plaintiff whole.F) All of the above
G) D) and E)

Question 6

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

Accepted Answer

Sellers or lessors are allowed to sell t...

Question 7

Which of the following is the preferred remedy for nonbreaching sellers when buyers fail to pay and pick up goods?

Accepted Answer

A)   Suit for incidental damages
B)   Cover
C)   Liquidated damages
D)   Resale
E)   Suit for consequential damagesF) B) and C)
G) A) and C)

Question 8

Which of the following is true regarding remedies available to the seller without court action if the buyer fails to pay according to the terms of the agreement?

Accepted Answer

A)   Sellers may cancel the contract, withhold delivery of goods, sell undelivered goods to another buyer, and put a lien on property of the buyer.
B)   Sellers may cancel the contract and withhold delivery of goods; but sellers may not sell undelivered goods to another buyer nor may sellers may put a lien on property of the buyer.
C)   Sellers may cancel the contract; but sellers may not withhold delivery of goods, sell undelivered goods to another buyer, or put a lien on property of the buyer.
D)   Sellers may cancel the contract and put a lien on property of the buyer; but sellers may not withhold delivery of goods or sell undelivered goods to another buyer.
E)   Sellers may cancel the contract, withhold delivery of goods, and sell the goods to another buyer; but sellers may not put a lien on any property of the buyer.F) C) and E)
G) A) and B)

Question 9

Assuming a buyer that is insolvent has breached a contract by not paying for goods that are in transit, which of the following may occur?

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.
C)   The carrier may stop delivery only if a signed writing exists by which the buyer agreed to the remedy of stopping shipment.
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) C) and E)
G) B) and C)

Question 10

Sam, who owned an appliance store, contracted with Sharon to supply all the new equipment for Sharon's new restaurant. Sharon wanted all the equipment by October 15th so that she could get the restaurant started and obtain holiday business. Sam and Sharon entered into an agreement by which Sharon would pay Sam $300 per day for every day he was late in providing the appliances. Which of the following is true regarding the section of the agreement involving the late charges?

Accepted Answer

A)   It is known as a liquidated damages provision which will be enforced by a court so long as it is not so far out of reasonable range as to be punitive in nature.
B)   It is known as a penalty provision which will be enforced by a court so long as the plaintiff can establish proof of compensatory damages in at least the amount of recovery requested.
C)   It is known as a punitive damages provision which will be enforced by a court only if wrongdoing or fraud on the part of the defendant can be established.
D)   It is known as a consequential damages provision which will be enforced by a court only if incidental damages can be established.
E)   It is known as an invalid provision which will not be enforced.F) B) and C)
G) B) and E)

Question 11

What is the likely effect of Trudy reselling the defective fixtures for $100?

Accepted Answer

A)   That is the only remedy Trudy will receive.
B)   The $100 will be deducted from the $400 Theresa owes leaving Theresa owing Trudy $300.
C)   Trudy will be allowed to keep the $100 and is still entitled to receive $400 from Trudy.
D)   Because of the extra work involved, Trudy will be required to deduct only half of the $100 from Theresa's debt, leaving Theresa owing $350.
E)   After the $100 is deducted, Trudy and Theresa will be required under the UCC to split the difference leaving Theresa owing $150.F) A) and B)
G) A) and C)

Question 12

What type of remedy does the UCC give buyers and lessees when the other party has breached a contract?

Accepted Answer

A)   The benefit of the bargain
B)   Any amounts of money lost plus 10%
C)   Any amounts of money lost plus 15%
D)   Any amounts of money lost plus 20%
E)   Any amounts of money lost plus 25%F) D) and E)
G) All of the above

Question 13

The UCC adopts several common law principles.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is true regarding when the UCC allows buyers and lessees to seek the remedy of specific performance?

Accepted Answer

A)   The UCC only allows buyers and lessees to seek the remedy of specific performance when goods are unique.
B)   The UCC only allows buyers and lessees to seek the remedy of specific performance when a remedy at law is inadequate.
C)   The UCC only allows buyers and lessees to seek the remedy of specific performance when goods are worth more than $500.
D)   The UCC allows buyers and lessees to seek the remedy of specific performance when goods are unique, when a remedy at law is inadequate, or when goods are worth more than $500.
E)   The UCC allows buyers and lessees to seek the remedy of specific performance when goods are unique or when a remedy at law is inadequate, but not because the goods are worth more than $500.F) A) and E)
G) A) and D)

Question 15

"Refused Furniture." Selina arranges to sell furniture from her furniture store to Roland for $3,000. Roland was supposed to give Selina a $500 deposit on February 1 and pay the remainder in monthly installments. Selina was to deliver the furniture by February 7. Roland did not pay Selina 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. Selina was able to sell the furniture for only $2,500 because of a downturn in the economy. Roland told Selina that she had no right to withhold or sell his furniture and that he was suing. Selina also incurred $100 in additional amounts in advertising costs to advertise the furniture that Roland initially purchased. Selina saved $40 in delivery costs because she did not have to deliver the furniture to Roland. The subsequent purchaser picked up her own furniture.

-Which of the following is true regarding any deduction in damages to which Roland is entitled?

Accepted Answer

A)   Roland is not entitled to any deduction because he was the breaching party.
B)   Roland is entitled to a deduction for the delivery expenses only if he can show that Selina agreed in writing to deduct those in the event of a breach.
C)   Roland is entitled to a deduction for the delivery expenses only if he can establish that Selina either knew or should have known that he would be unable to pay for the furniture.
D)   Roland is entitled to a deduction for the delivery expenses because that was a savings to Selina.
E)   Roland is entitled to a deduction for the delivery expenses because Selina breached the contract by not delivering the furniture to him and then pursuing an action for damages.F) B) and D)
G) C) and E)

Question 16

"Missed Payments." Robin, who loved water sports and relaxing in hot tubs, purchased a hot tub on an installment plan and was to pay the seller monthly. Her last payment was made on January 2, 2008. After several attempts at collection, the seller brought a lawsuit against her for sums remaining on the account on January 3, 2013. Robin defended on the basis that the statute of limitations had run. The seller claimed, however, that adequate time remained because the UCC applies a flexible statute of limitations; and, at any rate, sellers have at least five years in which to sue. Robin also arranged to purchase a personal watercraft. By contract with the seller, Robin was to pay an initial deposit within 10 days of the sale at which point she could take possession of the watercraft making monthly payments thereafter. Recognizing that a personal watercraft would not allow her to invite all her friends on lake trips, a couple of days after purchasing the personal watercraft, Robin purchased a pontoon boat. Because the seller of the pontoon boat demanded cash, Robin paid the total sales price prior to delivery. Unfortunately, when the pontoon boat was delivered, Robin found that it had a less powerful motor than the seller represented. Robin notified the seller of the problem, but the seller claimed to have no obligation to remedy the problem. Although recognizing that she paid too much for it, Robin decided that since lake season was underway, she would keep the pontoon boat. Because Robin paid full price for the pontoon boat, she was unable to pay within 10 days the deposit on the personal watercraft. The seller refused to deliver the watercraft, and sold it to another customer. Robin informed the seller that the refusal to deliver the watercraft was wrongful and that she was going to exercise her right to cover.

-Which of the following is true regarding the hot tub seller's right to recover funds from Robin?

Accepted Answer

A)   The seller will likely be able to proceed because the UCC has a flexible statute of limitations that takes into account whether the seller attempted to collect or lulled the plaintiff into believing collection efforts would not be made.
B)   The seller will be able to proceed because the UCC statute of limitations in this case would not expire for five years once a cause of action accrued.
C)   The seller will not be able to proceed because the UCC statute of limitations in this case expired three years after the cause of action accrued.
D)   The seller will not be able to proceed because the UCC statute of limitations in this case expired four years after the cause of action accrued.
E)   The seller will not be able to proceed because the UCC statute of limitations in this case expired two years after the cause of action accrued.F) A) and D)
G) A) and E)

Question 17

Which of the following provide remedies to buyers of defective cars?

Accepted Answer

A)   Apple laws
B)   Lemon laws
C)   Clunker laws
D)   Roadside laws
E)   Peach lawsF) A) and C)
G) B) and D)

Question 18

Under UCC 2A-525(2)  when may a lessor reclaim goods when a lessee in possession of the goods is in breach?

Accepted Answer

A)   When the lessor discovers the lessee is insolvent
B)   When the lessee fails to make payments according to the lease terms
C)   When the lessee has received at least 10 days prior notification of reclamation
D)   When the lessor discovers a significant reduction in the lessee's credit score
E)   When the lessor can establish a valid contract for actual purchase of the goodsF) C) and D)
G) A) and B)

Question 19

Assuming a buyer that is solvent has breached a contract by not paying for goods that are in transit, which of the following may occur?

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.
C)   The carrier may stop delivery only if a signed writing exists by which the buyer agreed to the remedy of stopping shipment.
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 E)
G) A) and C)

Question 20

The term "cover" refers to buyers or lessees substituting goods for those due under a sales or lease agreement.

Accepted Answer

A) True 
 B)False

Exam 24: Remedies for Breach of Sales and Lease Contracts

Which of the following is the preferred remedy for nonbreaching sellers when buyers fail to pay and pick up goods?

Correct Answer
verified

Which of the following is true regarding remedies available to the seller without court action if the buyer fails to pay according to the terms of the agreement?

Correct Answer
verified

Which of the following provide remedies to buyers of defective cars?

Correct Answer
verified

Which of the following was the result on appeal in Detroit Radiant Products Company v. BSH Home Appliances Corporation, the case in the text in which the plaintiff, a seller of gas-fired infrared heaters, sought to recover lost profits based on the defendants breach of contract?

Correct Answer
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Assuming a buyer that is insolvent has breached a contract by not paying for goods that are in transit, which of the following may occur?

Correct Answer
verified

Correct Answer
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Correct Answer
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Under UCC 2A-525(2) when may a lessor reclaim goods when a lessee in possession of the goods is in breach?

Correct Answer
verified

Correct Answer
verified

List the various options discussed in the text that may be available to a buyer/lessee when the seller/lessor is in breach.

Correct Answer
verified
When the seller/lessor is in breach, the...
View Answer

What type of remedy does the UCC give buyers and lessees when the other party has breached a contract?

Correct Answer
verified

Correct Answer
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Assuming a buyer that is solvent has breached a contract by not paying for goods that are in transit, which of the following may occur?

Correct Answer
verified

The term "cover" refers to buyers or lessees substituting goods for those due under a sales or lease agreement.

Correct Answer
verified

Which of the following is true regarding when the UCC allows buyers and lessees to seek the remedy of specific performance?

Correct Answer
verified

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

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

What is the likely effect of Trudy reselling the defective fixtures for $100?

Correct Answer
verified

Which of the following is true regarding whether usage of trade may impose a remedy in the event of a breach?

Correct Answer
verified

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

Correct Answer
verified

The UCC adopts several common law principles.

Correct Answer
verified

Exam 24: Remedies for Breach of Sales and Lease Contracts

Which of the following is the preferred remedy for nonbreaching sellers when buyers fail to pay and pick up goods?

Correct AnswerverifiedShow Answer

Which of the following is true regarding remedies available to the seller without court action if the buyer fails to pay according to the terms of the agreement?

Correct AnswerverifiedShow Answer

Which of the following provide remedies to buyers of defective cars?

Correct AnswerverifiedShow Answer

Which of the following was the result on appeal in Detroit Radiant Products Company v. BSH Home Appliances Corporation, the case in the text in which the plaintiff, a seller of gas-fired infrared heaters, sought to recover lost profits based on the defendants breach of contract?

Correct AnswerverifiedShow Answer

Assuming a buyer that is insolvent has breached a contract by not paying for goods that are in transit, which of the following may occur?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Under UCC 2A-525(2) when may a lessor reclaim goods when a lessee in possession of the goods is in breach?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

List the various options discussed in the text that may be available to a buyer/lessee when the seller/lessor is in breach.

Correct AnswerverifiedWhen the seller/lessor is in breach, the...View AnswerShow Answer

What type of remedy does the UCC give buyers and lessees when the other party has breached a contract?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Assuming a buyer that is solvent has breached a contract by not paying for goods that are in transit, which of the following may occur?

Correct AnswerverifiedShow Answer

The term "cover" refers to buyers or lessees substituting goods for those due under a sales or lease agreement.

Correct AnswerverifiedShow Answer

Which of the following is true regarding when the UCC allows buyers and lessees to seek the remedy of specific performance?

Correct AnswerverifiedShow Answer

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

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

What is the likely effect of Trudy reselling the defective fixtures for $100?

Correct AnswerverifiedShow Answer

Which of the following is true regarding whether usage of trade may impose a remedy in the event of a breach?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The UCC adopts several common law principles.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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When the seller/lessor is in breach, the...
View Answer

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

Correct Answer
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Correct Answer
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