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Exam 23: Performance and Obligations Under Sales and Leases

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Question 31

Multiple Choice

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Good faith in relation to transactions between parties who are not merchants means ____.

A) Honesty in fact
B) Honesty in law
C) Honesty in fact and also reasonable commercial standards of fair dealing
D) Honesty in law and also reasonable commercial standards of fair dealing
E) Honesty in fact and honesty in law

F) A) and D)
G) D) and E)

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Question 32

True/False

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Under the UCC, nondelivery is not a breach of contract in circumstances in which performance has been made impracticable because a contingency has occurred that was not contemplated when the parties reached an agreement.

A) True
B) False

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Question 33

True/False

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Under the UCC, buyers and lessees are obligated to accept and pay for conforming goods in accordance with the contract.

A buyer who has accepted goods may later revoke the acceptance if the buyer can show that the defects substantially impair the value of the goods.

Unless the parties agree otherwise, the buyer or lessee typically inspects goods ______ paying.

Sometimes language in the parties' agreement limits the rigidity of the perfect tender rule.

"Baseball Trophies." To recognize baseball players on his team, Bobby ordered from Bruce 10 trophies showing a baseball player swinging a bat. The trophies were to be delivered on May 1st for an award dinner to be held on May 20th. Bruce was unable to obtain trophies showing a baseball player swinging a bat, but by May 13th, he did locate some trophies with a baseball player holding a bat. The difference did not substantially impair the value of the trophies, and thinking that the trophies would be acceptable, Bruce delivered them on May 14th. Bobby glanced at the trophies, paid for them with a check, and said nothing. On May 16th Bobby looked at the trophies more closely and decided that he did not like them. He canceled payment on Bruce's check, and Bruce sued him for payment. -What is the most likely effect of Bruce's failure to cure the problem?

Under the UCC which of the following refers to the history of dealings between the parties in the particular contract at issue?

Course of dealing is another term for course of performance.

There are no exceptions to the perfect tender rule.

Define "course of performance," and discuss its relationship to decisions regarding whether goods conform to contract specifications.

When may a buyer revoke acceptance if a nonconformity substantially impairs the value of goods?

"New Furniture." Penny purchased $3,000 worth of furniture from Good Wood Furniture. Through an arrangement with Good Wood, Penny financed the purchase through a financing company called Let Us Help You. Twenty-nine days after the goods were delivered to her, Penny had a disagreement with Let Us Help You regarding the amount of interest she would be required to pay. She notified Good Wood on that day that she was rejecting the goods. Good Wood claimed that she did not properly reject the furniture and also that she failed to act in good faith, an obligation imposed equally on all parties to a transaction. Penny says that she properly rejected; that, although the UCC imposes no duty of good faith, she acted in good faith; and that, in any event, she had an absolute right to return the goods. -Which of the following is true regarding the claim of Good Wood that Penny failed to properly reject the goods?

Set forth what the UCC requires in the way of good faith and the duty imposed on both nonmerchants and merchants.

Which of the following is false regarding the perfect tender rule?

UCC Section _____ requires good faith in the performance and enforcement of every contract.

What is the Uniform Computer Information Transactions Act; and what is an important way, discussed in the text, by which the act protects software vendors?

Should the perfect tender rule be rejected as a matter of law and replaced with the concept of substantial performance?

"Baseball Trophies." To recognize baseball players on his team, Bobby ordered from Bruce 10 trophies showing a baseball player swinging a bat. The trophies were to be delivered on May 1st for an award dinner to be held on May 20th. Bruce was unable to obtain trophies showing a baseball player swinging a bat, but by May 13th, he did locate some trophies with a baseball player holding a bat. The difference did not substantially impair the value of the trophies, and thinking that the trophies would be acceptable, Bruce delivered them on May 14th. Bobby glanced at the trophies, paid for them with a check, and said nothing. On May 16th Bobby looked at the trophies more closely and decided that he did not like them. He canceled payment on Bruce's check, and Bruce sued him for payment. -Which of the following is the most likely result if Bruce claims he had reasonable grounds to believe the trophies were acceptable?

"Baseball Trophies." To recognize baseball players on his team, Bobby ordered from Bruce 10 trophies showing a baseball player swinging a bat. The trophies were to be delivered on May 1st for an award dinner to be held on May 20th. Bruce was unable to obtain trophies showing a baseball player swinging a bat, but by May 13th, he did locate some trophies with a baseball player holding a bat. The difference did not substantially impair the value of the trophies, and thinking that the trophies would be acceptable, Bruce delivered them on May 14th. Bobby glanced at the trophies, paid for them with a check, and said nothing. On May 16th Bobby looked at the trophies more closely and decided that he did not like them. He canceled payment on Bruce's check, and Bruce sued him for payment. -Considering only the issue involving the time set for delivery, what is the likely effect of Bobby delivering the trophies after the agreed upon time?