The UCC adopts several common law principles.A) TrueB) False2.Contract actions are created to enforce the intentions of the parties to the agreement, while tort law is primarily designed to vindicate social policy.A) TrueB) False3.The UCC does not allow a seller to cancel a contract if the buyer is in breach.A) TrueB) False4.A seller or lessor is allowed to sell goods to another buyer when the original buyer is in breach and the goods have not yet been delivered.A) TrueB) False5.Liquidated damages are identified after a contract breach occurs.A) TrueB) False6.In transit means that the seller or lessor has delivered the goods to a carrier or bailee, but the carrier or bailee has not yet turned them over to the buyer.A) TrueB) False7.The term “cover” refers to buyers or lessees substituting goods for those due under a sales or lease agreement.A) TrueB) False8.Specific performance usually requires that the seller or lessor cover.A) TrueB) False9.The case of Hill v. Gateway, discussed in the text, ruled that in order to be effective, a contract must be verbally read to a consumer who purchases a computer over the telephone.A) TrueB) False10.If a buyer accepts nonconforming goods, the buyer may not also seek damages.A) TrueB) False11.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?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.12.Which of the following is true regarding the availability of liquidated damages in China?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.13.Which of the following is true regarding how the obligations of sellers/lessors and buyers/lessees are determined?A) Obligations of parties are determined by the terms the parties outline in agreements, but not by custom or rules outlined by the UCC.B) Obligations of parties are determined by the rules outlined by the UCC, but not by terms the parties outline in agreements or by custom.C) Obligations of parties are determined by terms the parties outline in agreements and rules outlined by the Uniform Commercial Code, but not by custom.D) Obligations of parties are determined by the rules outlined by the UCC and by custom, but not by terms the parties outline in agreements.E) Obligations of parties are determined by the terms the parties outline in agreements, custom, and rules outlined by the UCC.14.What is the basic premise of contract law?A) To effectuate the expectations of the parties to an agreementB) To promote commerceC) To promote economic growthD) To promote interstate commerceE) To encourage a free-market society and greater financial security for the parties15.What type of remedy does the UCC give buyers and lessees when the other party has breached a contract?A) The benefit of the bargainB) 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.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?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.17.Which of the following damages, if any, may a seller receive who sells goods to another buyer when the original buyer is in breach?A) The difference between the resale price and the contract price, plus incidental damages and minus expenses saved.B) The difference between the resale price and the contract price only.C) The difference between the resale price and the contract price minus expenses without any allowance for incidental damages.D) The difference between the resale price and the contract price, plus incidental damages, with no deduction for expenses saved.E) Damages are not available because a seller has no rights to resell goods when the original buyer is in breach. The remedy is a suit for damages.18.Which of the following is true regarding the right of a lessor to seek incidental damages in the event of a breach by a lessee of goods?A) A lessor may seek incidental damages only if the lessee agreed in writing to pay them.B) A lessor may seek incidental damages only if the lessee agreed orally or in writing to pay them.C) A lessor may seek incidental damages only if the damages are in an amount over $500.D) A lessor may seek incidental damages only if the damages are in an amount over $1,000.E) A lessor may seek incidental damages.19.Which of the following are damages identified before the breach occurs?A) Nominal damagesB) Compensatory damagesC) Reliance damagesD) Liquidated damagesE) Consequential damages20.Which of the following is true regarding a liquidated damages provision?A) A provision for liquidated damages is illegal.B) A provision for liquidated damages is void because of public policy.C) A provision for liquidated damages is voidable because of public policy.D) A provision for liquidated damages is enforceable so long as it is not punitive in nature.E) A provision for liquidated damages will be enforced regardless of whether it is punitive in nature.
