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ANSWER KEY
Chapter 14 Sales Contracts: Rights, Duties, Breach, and Warranties
Opening Case Questions
1. The Seneys simply rented the bed for two weeks. The rental company actually retained
title and along with title, all the warranties that went along with it. Certainly the Seneys had the
2. The buyer has the duties to accept and pay for the goods. In addition, all parties must act
3. The seller has the duty to turn the goods over to the buyer. In addition, all parties must act
4. The Magnuson-Moss Warranty Act is designed to prevent deceptive warranty practices
and provide consumers with more information about warranties that are made on products they
A Question of Ethics: The Science Court v. The Commercial Docket
1. This question actually focuses on jurisdiction. The question looks like this: Which court is the
court of first instance in a contract case when the contract under consideration involves a scientific
matter? Jurisdiction is generally handled before a court begins operation. In fact, the enabling
legislation that creates the court should lay out that court’s area of responsibility. Thus, it might say that
all contract cases go to the commercial docket, except those that involve goods that facilitate a group’s
scientific purposes, rather than simply being a contract that facilitates a group’s general operation.
Thus, the purchase of a vehicle that would be used for deliveries for a pharmaceutical firm would
involve equipment that facilitates the general work of a company and would, thus, go to the
2. A surrogate parenting dispute would be a case for the science court. This is true for several
reasons. First, the court might need to understand the details of the surrogate parenting process in order
to make an informed decision. Second, the court may need to know the psychological effects of such a
contract. Third, if we decide to treat a surrogate parenting contract as a pure commercial contract we
3. It is possible that the judges in a science court might identify with the scientists and engineers that
are involved in such cases. However, this is nothing new and most judges should be able to keep their
distance and remain objective. We do not say, for example, that those judges who are involved in
4. The same response is possible for the commercial court. Commercial judges are not bound
inevitably to sympathize with the business people that they interact with any more than criminal court
5. Does the science court (and the commercial docket) violate due process and equal protection? The
answer is probably not. There are many examples available of special courts that handle certain types
of cases or certain types of people that do not violate equal protection. For example, there are separate
courts for juveniles, for domestic relations, for probate matters, for claims under a certain amount
(small claims courts), for traffic violations, and so on. The question that asks who gets the next special
Questions for Review and Discussion
1. Tender of performance means that each party to a contract must show that he or she is ready to
perform as promised under the terms of the original agreement. Tender of performance is necessary
2. The seller is obligated to turn over the goods to the buyer, and the buyer is obligated to accept
and to pay for them, each in accordance with the terms of the contract. In addition, all parties must
3. Anticipatory repudiation occurs when one of the parties announces that he or she is not going to
perform as promised before the performance is due. (e.g., “Hey, you know that delivery that we
promised for next week? Well, forget it!”) This statement permits the other party to treat that
4. When a buyer breaches a contract for sale, the seller may (1) withhold delivery of any goods not
yet delivered; (2) stop any goods that are in transit if the buyer is insolvent or stop delivery of a
carload, truckload, planeload, or larger shipments of express or freight when the buyer repudiates or
fails to make a payment that is due before delivery or otherwise breaches the contract; (3) resell the
goods or the undelivered balance of them—in the case of unfinished manufactured goods, a seller may
either complete the manufacture and resell the finished goods or cease manufacture and resell the
unfinished goods for scrap or salvage value; (4) retain the merchandise and sue the buyer for either the
difference between the contract price and the market price at the time the buyer breached the agreement
or the profit that the seller would have made had the contract been performed; (5) sue the buyer for the
5. A statute of limitations is a law that places a set period of time in which an injured party can act to
7. When a written warranty is given to a consumer under the Magnuson-Moss Warranty Act, it must
be made available before the consumer decides to buy the product, the writing must express the terms
8. The implied warranty of fitness for a particular purpose arises whenever a seller knows the
particular purpose for which the buyer will use the goods and knows that the buyer is relying on the
10. To exclude the implied warranty of merchantability, the word merchantability must be used in the
disclaimer. If the exclusion is in writing, it must be in large, bold type so that it is conspicuous. To
exclude the implied warranty of fitness for a particular purpose, the exclusion must be in writing and be
conspicuous also. The use of such expression as as is, with all faults, and the like is another way to
Cases for Analysis
1. If a buyer has accepted goods on the assumption that their nonconformity would be corrected by
2. Friend Lumber successfully argued that it was not notified of the nonconformity within a
reasonable time. When the buyer accepts goods and later discovers something wrong with them, the
buyer must notify the seller within a reasonable time after the discovery. Although the door units
4. No. Schleimer cannot recover from Googe because she did not make tender of delivery. The court
held that Googe had the right to cancel the contract because tender was not made. Although the buyer is
5. No. The buyers did not reject the goods within a reasonable time. Two years and 14,000 miles
6. No. The Magnuson-Moss Warranty Act applies only to a sale of goods to a consumer. The Act
defines a consumer as “a buyer (other than for purposes of resale) of any consumer product . . .” This
8. Kile would have a cause of action against the manufacturer. The UCC has abolished the
requirement of privity. Instead, it provides three alternatives from which a state may choose. In all of
9. No. Under the UCC, goods must be adequately contained and packaged to be merchantable. In
addition, the serving for value of food or drink to be consumed either on or off the premises is a sale for
10. McCoy has a remedy against the trading post for breach of warranty title. In a sales contract under
END CHAPTER FOURTEEN
