42. Which of the following is correct with respect to consequential damages under the Code?
a. Consequential damages include damages for destruction of a warehouse caused by the explosion of
nonconforming goods.
b. Consequential damages include damages for lost profits from a contract to resell goods which the seller never
delivers.
c. Particular needs of the buyer need to be made known to the seller before the seller can be held responsible
for consequential damages relating to those needs.
d. All of these are correct.
43. Buyer breaches a contract for the sale of goods and seller resells the goods, although the seller acts in bad faith and
not in a commercially reasonable manner. Because of the seller’s actions, the seller:
a. can recover from the buyer the difference between the resale price and the contract price, plus incidental
damages.
b. may only recover damages for nonacceptance or repudiation.
c. may choose between the remedy for resale and the remedy of recovery of damages for nonacceptance or
repudiation.
d. is denied any remedies.
44. Any action for breach of a sales contract must be begun within:
a. four years after the cause of action accrued.
b. five years after the cause of action accrued.
c. whatever period of time the parties have set in their contract.
d. two years of when the breach actually occurred or within five years of its discovery.
45. A seller’s incidental damages for a buyer‘s breach would include all but the cost to:
a. store the widgets in buyer’s city
b. ship widgets back to seller
c. initially ship the widgets to buyer
d. reload widgets onto seller‘s truck at buyer‘s city
46. Tom breached a contract he had with Jim. In addition to other remedies available, Jim may be able to recover
commercially reasonable expenses incurred as a result of the breach. These expenses are:
a. incidental damages.
b. punitive damages.
c. liquidated damages.
d. extraordinary damages.
47. Damages a buyer may recover for loss resulting from requirements, the needs of which the seller had reason to
know at the time of contracting and which could not reasonably be prevented by cover, are:
a. incidental.
b. consequential.
c. punitive.
d. liquidated.
48. William rents a backhoe for six months from Hunter Leasing but fails to make timely payment of the rent. Hunter
Leasing may recover:
a. only the backhoe itself.
b. the difference between the present values of the rent due under the original lease and the market rent for the
remainder of the term of the original lease.
c. only the contract amount of rent.
d. the market rent for the period of time covered by William’s nonpayment.
49. A buyer’s right to purchase, in good faith and without unreasonable delay, substituted goods from Seller B when
Seller A breaches a sales contract is:
a. cover.
b. specific performance.
c. replevin.
d. reclamation.
50. Which of the following remedies are available to either a buyer or seller following a breach by the other party?
a. Canceling the contract and recovering incidental damages
b. Covering and suing for incidental damages
c. Obtaining specific performance and stopping delivery of the goods
d. Canceling the contract and suing to recover the price
51. Under the CISG, if the buyer fails to perform any obligations, the seller may:
a. set an additional period of time of reasonable length for performance.
b. require the buyer to pay the price.
c. receive damages.
d. All of these.
52. Which of the following is not a remedy available to an unpaid seller against the buyer?
a. Recovery of the price
b. Cover and suit for damages
c. Recovery of incidental damages
d. Cancellation of the contract
53. Under what circumstances may the buyer seek the remedy of replevin?
a. Where the buyer has been able to effect cover
b. Where the goods have been shipped under reservation of a security interest and the buyer has satisfied that
interest
c. Where the goods are specially manufactured but can be purchased from another source
d. All of these are correct.
54. Seth and Maricela enter into a contract for a sale of goods for a contract price of $1,200 and Maricela has made a
down payment of $200. Seth delivers nonconforming goods to Maricela who rightfully rejects them. The best remedy
available to Maricela is to:
a. cancel the contract and recover her $200 plus whatever other damages she can prove.
b. reclaim the goods and cover.
c. resell the goods and recover damages.
d. stop delivery of the nonconforming goods and recover payments made.
55. In which of the following situations would the seller‘s right to stop delivery continue?
a. Where the buyer receives the goods
b. When a negotiable document of title for the goods is negotiated to the buyer
c. When a bailee of the goods has not yet acknowledged to the buyer that he holds the goods for the buyer
d. When the carrier acknowledges to the buyer that he holds the goods for the buyer as a warehouser
56. On January 3, Cara wrote to SunTime Mfg. asking for shipment of 100 swimsuits on 90–day credit. In the letter, she
gave references that indicated that her store was financially sound. Actually she had bills that she could not pay and
hoped to turn the business around with the summer swimsuit sales. SunTime ships the suits on March 1; they are
received March 15. Cara immediately puts them on display and seven are sold by March 20 when SunTime
discovers that Cara has lied. SunTime may:
a. recover 93 suits plus incidental damages.
b. recover 100 suits provided that SunTime acts in ten days from the delivery date.
c. recover no suits since it has been ten days since the suits were shipped.
d. recover 93 suits.
57. Perry is building his house and orders a hot water heater from Jones Co. to be installed by them. The hot water
heater they sent has a 45-gallon capacity when Perry ordered a 60–gallon capacity. Jones cannot provide a 60-gallon
heater for two months, so Perry cancels the contract and gets a heater from Stosill’s. Jones Co. says it must be
allowed to install the heater purchased from Stosill’s. What result?
a. Jones wins; Perry can only cancel the contract as regards the goods.
b. Jones wins; Perry can only cancel if installation is also delayed two months.
c. Perry wins since the contract breach goes to the whole contract.
d. Perry can cancel the whole contract, but he is then limited in his recovery of damages.
58. After a breach by the seller, buyer may replevy the goods that have been identified to the contract if:
a. he acts within 30 days.
b. he cannot, after a reasonable effort, buy replacement goods.
c. the seller is insolvent.
d. the goods have an unsatisfied security interest.
59. The fair market value of a 10–foot fishing boat is $1,000. In a special promotion, J’s Marina purchases a 10–foot
fishing boat for $900. The boat is badly scratched when it arrives. J’s Marina, however, accepts the shipment and
notifies the seller of the defect. The boat as delivered has a value of $800. If the damaged boat is a breach of
warranty by the seller, the buyer may recover from the seller:
a. $100.
b. $100 plus incidental and consequential damages.
c. $200.
d. $200 plus incidental and consequential damages.
60. As the result of a seller’s breach, a buyer may ask for incidental damages. Incidental damages include costs incurred
in:
a. storing goods in a warehouse.
b. making calls to obtain replacement goods.
c. inspecting the goods.
d. All of these.
61. A seller has breached his contract by providing unfit seed, which breach was undetectable until the bean crop was to
be harvested. Remedies would include:
a. damages for the lost profits from a contract to sell the bean crop.
b. liquidated damages set by the court to cover such a situation.
c. specific performance of the contract.
d. All of these.
62. If Andrews Manufacturing Company has repudiated its contract to sell 500 computers to a retailer, the retailer:
a. must await the seller’s performance.
b. can recover punitive damages.
c. can seek specific performance.
d. can “cover” by procuring goods elsewhere and then sue Andrews for incidental and consequential damages.
63. Which of the following would be considered consequential damages?
a. Commissions paid to effect cover
b. Expenses reasonably incurred for inspection of the goods
c. Damages to personal property and personal injury resulting from the malfunction of a machine warranted by
the seller to be suitable for the buyer’s purpose.
d. Storage charges for rejected nonconforming goods
64. Which of the following remedies are mutually exclusive and could not be obtained simultaneously?
a. Cover, incidental and consequential damages
b. Identification of the goods and withholding delivery
c. Withholding delivery and suit to recover incidental and consequential damages
d. None of these. The Code’s remedies are cumulative, unless under the facts of an individual case one remedy
bars another.
65. Which of the following remedies is available to the seller or manufacturer of goods upon a breach by buyer by
repudiation of the contract?
a. The manufacturer may resell any unfinished goods.
b. The manufacturer may identify goods to the contract.
c. The seller may sell the unfinished goods for scrap.
d. The seller may do all of these.
66. Smith‘s of Dallas placed a $10,000 order for dresses, F.O.B. Dallas from Magnifique Manufacturing Co. in New
York, for their October 1 Fall Showing. The dresses were to be shipped at a cost of $300 to the seller. In New York,
Magnifique dresses were the rage, but the boom had not yet reached Dallas. By September 15, Smith’s realized that
the shop could not afford all of these dresses and called Magnifique to cancel the contract. On September 15, the
market price for the dresses in New York was $9,000 and in Dallas, $5,000. On October 1, the market price had
risen to $9,500 in New York and to $7,000 in Dallas. What may Magnifique do? What are the alternatives for
damages from Smith’s?
67.
a. Under the common law, when can an injured party seek the remedy of specific performance?
b. How does the Code change the common law rule?
c. Compare and contrast the remedies of replevin and specific performance.
68. Compare the remedies of withholding delivery of the goods and stopping delivery of the goods. How are they alike?
How are they different?
69. Under the Code, what rights do the parties have to affect the possible remedies available in the case of breach?
70. Under the CISG, what are the damages for breach of contract by one party? Does the aggrieved party have any
responsibility after the breach occurs?
71. How are remedies of the seller for breach of contract by the buyer categorized by their orientation? What remedies
are within each of the categories?
72. In what ways may a seller default, and what remedies are available to the buyer in such a case?