ANSWERS TO QUESTIONS
1. Mae contracted to sell one thousand bushels of wheat to Lloyd at $5.00 per bushel. Just
before Mae was to deliver the wheat, Lloyd notified her that he would not receive or accept
the wheat. Mae sold the wheat for $4.60 per bushel, the market price, and later sued Lloyd
for the difference of $400. Lloyd claims he was not notified by Mae of the resale and, hence,
is not liable. Is Lloyd correct? Why?
Answer: Seller Remedy: Damages for Non-Acceptance or Repudiation. No, Lloyd is not
2. On December 15, Judy wrote a letter to David stating that she would sell to David all of the
mine-run coal that David might wish to buy during the next calendar year for use at David’s
factory, delivered at the factory at a price of $30 per ton. David immediately replied by letter
to Judy, stating that he accepted the offer, that he would purchase all of his mine-run coal
from Judy, and that he would need two hundred tons of coal during the first week in January.
During the months of January, February, and March, Judy delivered to David a total of seven
hundred tons of coal, for all of which David made payment to Judy at the rate of $30 per ton.
On April 10, David ordered two hundred tons of mine-run coal from Judy, who replied to
David on April 11 that she could not supply David with any more coal except at a price of $38
per ton delivered. David thereafter purchased elsewhere at the market price, namely $38 per
ton, all of his factory’s requirements of mine-run coal for the remainder of the year,
amounting to a total of two thousand tons of coal. Can David now recover damages from
Judy at the rate of $8 per ton for the coal thus purchased, amounting to $16,000?
Answer: Buyer Remedy: Cover. Yes. Decision for David. Judy has breached her valid
requirements contract with David and David is entitled to protect himself by obtaining cover,
3. On January 10, Betty, of Emanon, Missouri, visited the showrooms of the Forte Piano
Company in St. Louis and selected a piano. A sales memorandum of the transaction signed
both by Betty and by the salesman of the Forte Piano Company read as follows: “Sold to
Betty one new Andover piano, factory number 46832, price $3,300, to be shipped to the buyer
at Emanon, Missouri, freight prepaid, before February 1. Prior to shipment, seller will stain
the case a darker color in accordance with buyer’s directions and will make the tone more
brilliant.” On January 15, Betty repudiated the contract by letter to the Forte Piano
Company. The company subsequently stained the case, made the tone more brilliant, and
offered to ship the piano to Betty on January 26. Betty persisted in her refusal to accept the
piano. The Forte Piano Company sued Betty to recover the contract price. To what remedy, if
any, is Forte entitled?
Answer: Seller Remedy: Damages for Non-Acceptance or Repudiation. In Forte’s attempt to
recover the contract price, judgment would be in favor of Betty, the buyer. This is a contract
4. Sims contracted in writing to sell Blake one hundred electric motors at a price of $100 each,
freight prepaid to Blake’s warehouse. By the contract of sale, Sims expressly warranted that
each motor would develop twenty-five brake horsepower. The contract provided that the
motors would be delivered in lots of twenty-five per week beginning January 2 and that Blake
should pay for each lot of twenty-five motors as delivered, but that Blake was to have right of
inspection on delivery. Immediately on delivery of the first lot of twenty-five motors on
January 2, Blake forwarded Sims a check for $2,500, but on testing each of the twenty-five
motors, Blake determined that none of them would develop more than fifteen brake
horsepower. State all of the remedies under the U.C.C. available to Blake.
Answer: Buyer Remedies. The remedies available to Blake, the buyer, under the UCC are:
(1) To accept and keep the twenty-five motors for which he has paid and to recover damages
from the seller as provided in Section 2-714.
5. Henry and Mary entered into a written contract whereby Henry agreed to sell and Mary
agreed to buy a certain automobile for $8,500. Henry drove the car to Mary’s residence and
properly parked it on the street in front of Mary’s house, where he tendered it to Mary and
requested payment of the price. Mary refused to take the car or pay the price. Henry informed
Mary that he would hold her to the contract; but before Henry had time to enter the car and
drive it away, a fire truck, answering a fire alarm and traveling at a high speed, crashed into
the car and demolished it. Henry brings an action against Mary to recover the price of the
car. Who is entitled to judgment? Would there be any difference in result if Henry were a
dealer in automobiles?
Answer: Seller Remedy: Recover the Price. If Henry were a dealer in automobiles, judgment
for Mary. If Henry was not a dealer in automobiles, and not otherwise a merchant in goods of
6. James sells and delivers to Gerald on June 1 certain goods and receives from Gerald at the
time of delivery Gerald’s check in the amount of $9,000 for the goods. The following day,
Gerald is petitioned into bankruptcy, and the check is dishonored by Gerald’s bank. On June
5, James serves notice upon Gerald and the trustee in bankruptcy that he reclaims the goods.
The trustee is in possession of the goods and refuses to deliver them to James. What are the
rights of the parties?
Answer: Seller Remedy: Reclaim Goods upon Buyer’s Insolvency. James’ right to reclaim the
goods as against the trustee in bankruptcy is governed by Section 2-702(2) of the U.C.C. and
7. The ABC Company, located in Chicago, contracted to sell a carload of television sets to Dodd
in St. Louis, Missouri, on sixty days’ credit. ABC Company shipped the carload to Dodd. On
arrival of the car at St. Louis, Dodd paid the freight charges and reshipped the car to Hines
of Little Rock, Arkansas, to whom he had previously contracted to sell the television sets.
While the car was in transit to Little Rock, Dodd went bankrupt. ABC Company was informed
of this at once and immediately telephoned XYZ Railroad Company to withhold delivery of
the television sets. What should the XYZ Railroad Company do?
Answer: Seller Remedy: Recover the Price. The XYZ Railroad Co. should not redeliver the
television sets to ABC Co. whose right of stoppage in transit is terminated upon buyer Dodd’s
8. Robert in Chicago entered into a contract to sell certain machines to Terry in New York. The
machines were to be manufactured by Robert and shipped F.O.B. Chicago not later than
March 25. On March 24, when Robert was about to ship the machines, he received a letter
from Terry wrongfully repudiating the contract. The machines cannot readily be resold for a
reasonable price because they are a special kind used only in Terry’s manufacturing
processes. Robert sues Terry to recover the agreed price of the machines. What are the rights
of the parties?
Answer: Seller Remedy: Recover the Price. Robert is entitled to recover the price of the
merchandise from Terry. Section 2-709 U.C.C. provides: “(1) When the buyer fails to pay the
9. Calvin purchased a log home construction kit, manufactured by Boone Homes, Inc., from an
authorized Boone dealer. The sales contract stated that Boone would repair or replace
defective materials and that this was the exclusive remedy available against Boone. The
dealer assembled the house, which was defective in a number of respects. The knotholes in the
logs caused the walls and ceiling to leak. A support beam was too small and therefore
cracked, causing the floor to crack also. These defects could not be completely cured by
repair. Should Calvin prevail in a lawsuit against Boone for breach of warranty to recover
damages for the loss in value?
Answer: Modification or Limitation of Remedy by Agreement. Yes, Calvin should prevail.
The repair or replacement clause as a limitation of remedy was a failure in this case. Many of
10. Margaret contracted to buy a particular model Rolls-Royce from Paragon Motors, Inc.
Only one hundred of these models are built each year. She paid a $3,000 deposit on the car
but Paragon sold the car to Gluck. What remedy, if any, does Margaret have against
Paragon?
Answer: Buyer Remedy: Cancel the Contract/Cover/Recover Damages for Non-Delivery.
Margaret’s remedy depends upon the availability in the market of a comparable car. Under
2-716 of the Code, “Specific performance may be decreed where the goods are unique or in
other proper circumstances.” Because there were one hundred of this model of car
manufactured, the goods are not strictly speaking “unique.” Margaret may be able to
11.Technical Textile agreed by written contract to manufacture and sell 20,000 pounds of yarn to
Jagger Brothers at a price of $2.15 per pound. After Technical had manufactured, delivered,
and been paid for 3,723 pounds of yarn, Jagger Brothers by letter informed Technical that it
was repudiating the contract and that it would refuse any further yarn deliveries. The
remaining 16,277 pounds were never manufactured. On August 12, the date of the letter, the
market price of yarn was $1.90 per pound. Technical sued Jagger Brothers for breach of
contract. To what damages, if any, is Technical entitled? Explain.
Answer: Seller’s Remedies/Damages. Technical is entitled to $4,069.25 in damages, an amount
equal to 16,277 times $0.25, which is the difference between the contract price ($2.15) and
the market price ($1.90) of the yarn on the repudiation date. Is this the appropriate method to
12. Sherman Burrus, a job printer, purchased a printing press from the Itek Corporation for
a price of $7,006.08. Before making the purchase, Burrus was assured by an Itek salesperson,
Mr. Nessel, that the press was appropriate for the type of printing Burrus was doing. Burrus
encountered problems in operating the press almost continuously from the time he received it.
Burrus, his employees, and Itek representatives spent many hours in an unsuccessful attempt
to get the press to operate properly. Burrus requested that the press be replaced, but Itek
refused. Burrus then brought an action against Itek for (a) damages for breach of the implied
warranty of merchantability and (b) consequential damages for losses resulting from the
press’s defective operation. Burrus was able to prove that the actual value of the press was
$1,167 and, because of the defective press, that his output decreased and he sustained a great
loss of paper. Itek contends that consequential damages are not recoverable in this case since
Burrus elected to keep the press and continued to use it. How much should Burrus recover in
damages for breach of warranty? Is he entitled to consequential damages?
Answer: Buyer Remedy: Breach of Warranty. Judgment for Burrus affirmed. The measure of
damages for breach of warranty is “the difference between the value of the goods accepted
and the value they would have had if they had been as warranted.” The press’s warranted
13. A farmer made a contract in April to sell to a grain dealer 40,000 bushels of corn to be
delivered in October. On June 3, the farmer unequivocably informed the grain dealer that he
was not going to plant any corn, that he would not fulfill the contract, and that if the buyer
had commitments to resell the corn he should make other arrangements. The grain dealer
waited in vain until October for performance of the repudiated contract. Then he bought corn
at a greatly increased price on the market in order to fulfill commitments to his purchasers.
To what damages, if any, is the grain dealer entitled? Explain.
Answer: Buyer Remedy: Right to Cover. This was an anticipatory repudiation of the contract.
Under Section 2-610(a) the aggrieved party may await performance for a commercially