Exam 24: Remedies for Breach of Sales and Lease Contracts

A) Buyers and lessees are allowed to do so in order to receive the benefit of the bargain,and there is no requirement that they give the seller/lessor prior notice of the defect.
B) Buyers and lessees are allowed to do so in order to receive the benefit of the bargain,but they must give the seller/lessor reasonable notice of the defect.
C) Buyers may do so in order to receive the benefit of the bargain so long as reasonable notice of the defect is given,but lessees may not.
D) Lessors may do so in order to receive the benefit of the bargain so long as reasonable notice of the defect is given,but sellers may not.
E) Buyers and lessees may do so only if the seller/lessor agrees to the retention of the nonconforming goods and does not request their return.

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B

A) Reliance damages
B) Liquidated damages
C) Consequential damages
D) Nominal damages
E) Compensatory damages

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A) Yes,but only because the fixtures were incorporated into real property.
B) Yes,Samantha is correct but only because a consumer transaction with a nonmerchant is involved.
C) No,because Maddie had the right to revoke acceptance and cover.
D) Yes,but only because the fixtures had not yet been paid for by the buyer.
E) Yes,because that is the only remedy she must provide under any circumstances.

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A) Reject the goods and obtain cover,but the buyer may not cancel the contract
B) Cancel the contract only
C) Reject the goods only
D) Reject the goods,and then obtain cover or cancel the contract
E) Obtain cover only

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A) It is known as a penalty provision which will be enforced by a court so long as the plaintiff can establish proof of compensatory damages in at least the amount of recovery requested.
B) It is known as an invalid provision which will not be enforced.
C) It is known as a liquidated damages provision which will be enforced by a court so long as it is not so far out of reasonable range as to be punitive in nature.
D) It is known as a punitive damages provision which will be enforced by a court only if wrongdoing or fraud on the part of the defendant can be established.
E) It is known as a consequential damages provision which will be enforced by a court only if incidental damages can be established.

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A) 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.
B) Through judicial mandate,China adopted the U.S.standard for the award of liquidated damages.
C) 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.
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 not available in China.

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A) To punish those who breach contracts.
B) To deter parties from breaching contracts
C) To compensate breach victims.
D) To provide a private system of justice
E) To enforce social order.

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B

A) Apple laws
B) Roadside laws
C) Clunker laws
D) Lemon laws
E) Peach laws

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A) To promote interstate commerce
B) To promote economic growth
C) To encourage a free-market society and greater financial security for the parties
D) To effectuate the expectations of the parties to an agreement
E) To promote commerce

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A) When the seller discovers the buyer is insolvent
B) When the buyer is at least 5 days late on a payment
C) When the buyer has received at least 30 days prior notification of reclamation
D) When the buyer is at least 10 days late on a payment
E) When the buyer has received at least 10 days prior notification of reclamation

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A) Luke is incorrect but only if Maya can prove that she had no reason to believe that he was a credit risk prior to signing the contract of sale.
B) Luke is incorrect.Maya had a right to resell the furniture.
C) Luke is correct but only because of the special UCC exception for consumer goods.
D) Luke is correct.Maya had no right to sell the furniture,but she retained the right to sue him for any deficiency.
E) Luke is correct because of federal consumer protection laws.

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A) That Altana was only entitled to receive cover,meaning substitution for the defective medication.
B) That Abbott industries was liable for the cost of the recall and destruction of the defective medication,for the costs of employee overtime,and for lost future sales even though Altana was able to meet its contractual obligations.
C) That Abbott industries was liable for the cost of the recall and destruction of the defective medication and for the costs of employee overtime,but not for lost future sales because Altana was able to meet its contractual obligations.
D) That Abbott industries was liable for the cost of the recall and destruction of the defective medication,for the costs of employee overtime,and for lost future sales because Altana was unable to meet its contractual obligations.
E) That Altana was unable to recover anything because business people take a risk that some shipments will be bad.

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A) Tort law and contract law have the same basic premise
B) Contract actions are created to enforce the intentions of parties to an agreement;tort law is primarily designed to vindicate social policy
C) Tort actions are created to enforce the intentions of parties to an agreement;contract law is primarily designed to vindicate social policy
D) Contract actions are intended to allow the government to impose penalties for failure to follow contracts;tort law is intended to allow private individuals to impose penalties on each other for failure to fulfill a bargain.
E) Tort actions are intended to allow the government to impose penalties;contract law is intended to allow private individuals to impose penalties on each other for failure to fulfill a bargain.

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The manager is incorrect because,while u...

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A) Luke is entitled to a deduction for the delivery expenses only if he can show that Maya agreed in writing to deduct those expenses in the event of a breach.
B) Luke is not entitled to any deduction because he was the breaching party.
C) Luke is entitled to a deduction for the delivery expenses only if he can establish that Maya either knew or should have known that he would be unable to pay for the furniture.
D) Luke is entitled to a deduction for the delivery expenses because that was a savings to Maya.
E) Luke is entitled to a deduction for the delivery expenses because Maya breached the contract by not delivering the furniture to him and then pursuing an action for damages.

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A) Cancelling a contract is a seller's only remedy if a buyer or lessee is in breach.
B) No notice is required to cancel a contract.
C) Canceling a contract is a remedy of last resort from the UCC"s perspective.
D) Cancelling a contract is never permitted under the UCC.
E) If a seller cancels a contract,he may not pursue any other remedies available under the UCC.

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C