Chapter 22. Performance
1. A merchant buyer of goods receives nonconforming goods. The merchant buyer rightfully rejects and appropriately
notifies the seller, but the seller has no agent in the buyer’s city. The goods are perishable and threaten to decline in
value speedily. The merchant buyer has no further duty to the seller other than to await the seller’s instructions.
a. True
b. False
2. The delivery terms “ex-ship” and “no arrival, no sale” indicate that the contract is a shipment contract.
a. True
b. False
3. A merchant buyer who has rightfully rejected goods must follow reasonable instructions from the seller regarding
disposition of the goods if the seller has no agent at the place of rejection.
a. True
b. False
4. The seller’s tender of performance does not have to conform to the Code’s perfect tender rule.
a. True
b. False
5. In the absence of agreement, payment is due at the time and place the buyer is to receive the goods, even though the
place of shipment is the place of delivery.
a. True
b. False
6. A contract that is FOB Dallas where the seller is in Chicago and the buyer is in Dallas is a destination contract.
a. True
b. False
7. If no place of tender is indicated by the contract, it is presumed delivery is to be made at the buyer’s place of
business.
a. True
b. False
8. Unless otherwise agreed, the buyer has the right to inspect the goods before making payment.
a. True
b. False
9. Payment of a C.O.D. shipment constitutes an acceptance of the goods.
a. True
b. False
10. After passage of a week, the buyer of six crates of strawberries will be deemed to have accepted the goods.
a. True
b. False
11. Rejection is ineffective unless the buyer notifies the seller.
a. True
b. False
12. Parties may not contractually agree to limit the operation of the perfect tender rule.
a. True
b. False
13. On April 1, Marco bought a sailboat from a local marina. The boat was defective and did not turn about properly.
Marco used the boat extensively all summer and the boat was no longer in the same condition as when it was
bought. By the end of the summer, Marco had waived his right to revoke acceptance.
a. True
b. False
14. Rightful rejection must be made within a reasonable time after the goods have been tendered or delivered.
a. True
b. False
15. John entered into a contract with Miriam to build her a walnut dining room table for $1,000. A few days later, the
price of walnut lumber increased 200%, which will result in John‘s incurring a $300 loss on the table. Due to the
price increase, John is automatically excused from performance under the contract.
a. True
b. False
16. Tender can be made any time of the day or night when the seller feels like delivering the goods.
a. True
b. False
17. The Code does not excuse performance based upon commercial impracticability.
a. True
b. False
18. In an installment contract, the buyer may reject any nonconforming installment if the nonconformity substantially
impairs the value of that installment and cannot be cured.
a. True
b. False
19. The buyer’s payment or tender of payment, unless otherwise agreed, is a condition to the seller’s duty to tender and
to complete delivery.
a. True
b. False
20. If a buyer accepts part of a shipment and rejects part of a shipment, he must pay for the items he keeps at the
contract rate.
a. True
b. False
21. Revocation following an acceptance of the goods gives the buyer fewer rights than he would have had if he had at
first rejected the goods.
a. True
b. False
22. A commercial unit may be a set of articles, such as an assortment of sizes.
a. True
b. False
23. Unless the contract specifies otherwise, goods may be tendered in installments.
a. True
b. False
24. If a lease contract does not sufficiently cover the particulars of performance, Article 2A provides many gap-filler
provisions.
a. True
b. False
25. Parker agrees to sell to Thompson 500 bushels of soybeans at $6 per bushel. Without the fault of Parker or
Thompson, 200 bushels are destroyed. Thompson must take the remaining 300 bushels and pay Parker $1,800.
a. True
b. False
26. The Code provides that where neither party is at fault and the agreed manner of delivering the goods becomes
commercially impracticable, a substituted manner of performance, if commercially reasonable, must be tendered and
accepted.
a. True
b. False
27. When the nonconformity or default substantially impairs the value of the installment but not the value of the entire
contract, the buyer can reject the installment, even if the seller gives adequate assurance of the installment’s cure.
a. True
b. False
28. The CISG follows the perfect tender rule, as does the Code.
a. True
b. False
29. Watkins Manufacturing has furniture, some of which it has sold to Home Interiors, stored in Central Warehouse. It is
to be delivered without being moved. In order to fulfill its obligations to tender delivery, Watkins may either tender to
Home Interiors a document of title or obtain an acknowledgment by the warehouse of Home Interiors’ right to
possess the furniture.
a. True
b. False
30. A buyer who sells rejected goods on behalf of the seller is entitled to reasonable expenses not to exceed five percent
of the gross proceeds.
a. True
b. False
31. In a contract that provides that the sale is F.O.B. Chicago, the seller must at his own expense and risk transport the
goods to Chicago and there tender delivery to the buyer.
a. True
b. False
32. In a “no arrival, no sale” contract, the seller is responsible to the buyer for the goods’ failure to arrive.
a. True
b. False
33. Acceptance of any part of a commercial unit is acceptance of the entire unit.
a. True
b. False
34. Under the CISG, if prior to the date for performance of the sales contract it is clear that one of the parties will
commit a fundamental breach, the other party may declare the contract avoided.
a. True
b. False
35. Knecht contracts to sell $20,000 of goods to Morales. Later, Morales hears from another supplier that Knecht is
having financial trouble, and Morales is concerned that Knecht will not be able to fill his order. If Morales has
reasonable grounds for insecurity about Knecht’s contractual performance:
a. Morales has no recourse except to wait for the contractual delivery date and, if Knecht fails to deliver,
Morales can then sue for breach of contract.
b. Morales may demand written assurance of performance from Knecht before the contract delivery date, and
Knecht must provide adequate assurance within a reasonable time not exceeding 30 days.
c. Morales may demand assurance of performance from Knecht, and Knecht must provide adequate assurance
within ten days or the contract is repudiated.
d. the statement by the other supplier creates an anticipatory repudiation which allows Morales to avoid the
contract.
36. If an anticipatory repudiation substantially impairs the value of the contract, the aggrieved party may:
a. await performance for a reasonable time.
b. resort to any remedy for breach.
c. Both of these options.
d. None of these options.
37. Amanco is to deliver to D & R Wholesalers 50 dozen wire-rim glasses frames by October 15. On October 2,
Amanco delivers 30 dozen wire-rim frames and 20 dozen plastic frames. If D & R rejects the frames:
a. Amanco has until October 15 to cure the defect if it notifies D & R of its intention to do so.
b. D & R need not notify Amanco of its rejection of the nonconforming goods in order for the rejection to be
effective since Amanco should know the goods did not meet the contract specifications.
c. the contract is automatically voided since the goods were nonconforming.
d. Amanco has no opportunity to cure the defect since it exhibited bad faith in not sending goods specified in the
original contract.
38. If no definite time for delivery is fixed by the terms of the contract, delivery:
a. will not take place.
b. must begin within 10 days of the contract.
c. must be immediate.
d. and acceptance must happen within a reasonable amount of time.