East Mississippi Community College

ECON 2123

Chapter 27-REMEDIES FOR BREACH OF SALES CONTRACTS

TRUE/FALSE

1)The UCC statute of limitations applies to actions brought for remedies on the breach of a sales contract.

 

                                           

 

2. An action for breach of warranty generally must be brought within three (3) years of the breach.

 

                                           

 

3. A buyer seeking damages because of a breach of the sales contract must give the seller notice of the breach within a reasonable time after the buyer discovers or should have discovered it.

 

                                           

 

4. Notifying a seller about a defect is not necessary if the buyer files suit for breach within four years.

 

                                           

 

5. In the absence of an agreement for the extension of credit to the buyer for the purchase of goods, and until the buyer pays for the goods or performs whatever actions the contract requires, the seller has the right to retain possession of the goods.

 

                                           

 

6. When a sales contract is broken by the buyer, the seller has only the remedies of lien and resale available.

 

                                           

 

7. A seller has the right to stop shipment if the buyer has received goods on credit and the seller learns that the buyer is insolvent, the buyer has not provided assurances as requested, or the seller has grounds to believe performance by the buyer will not occur.

 

                                           

 

8. When a buyer has broken a sales contract, the seller may resell the goods or the balance of them in the seller's possession.

 

                                           

 

9. When a buyer wrongfully rejects goods, the seller may cancel the contract.

 

                                           

 

10. If goods are specially manufactured and the buyer refuses to take them, it is possible for the seller to recover as damages the full purchase price and keep the goods.

 

                                           

 

11. If a buyer refuses to pay for goods after an acceptance that was not revoked, the seller may bring action to recover the purchase price and any incidental damages.

 

                                           

 

12. A cured transaction is a pledge of property by the buyer-debtor that enables the seller to take possession of the goods if the buyer fails to pay the amount owed.

 

                                           

 

13. When a buyer has breached the contract by failing to accept conforming goods, the seller may sue the buyer for the full purchase price if the goods cannot be resold by the seller.

 

                                           

 

14. Rejection of an improper tender of goods constitutes a revocation of acceptance on the part of the buyer.

 

                                           

 

15. After rejecting goods, a buyer may continue to exercise rights of ownership with respect to the goods until the seller sends explicit instructions for return.

 

                                           

 

16. If a buyer rejects a tender of goods, the rejection must be made within ten days of tender. There is no requirement of notice to the seller of the choice made.

 

                                           

 

17. A buyer may reject the goods or revoke the acceptance for any defects in the goods.

 

                                           

 

18. Proof of substantial impairment of the value of a contract to the buyer is required to justify revocation of acceptance.

 

                                           

 

19. A buyer returning to the seller a raincoat that shrank in the rain is revoking acceptance.

 

                                           

 

20. A buyer is not barred from revoking acceptance of goods because the buyer has delayed until attempts of the seller to correct the defects proved unsuccessful.

 

                                           

21. The giving of notice to a seller within a reasonable time after a breach of warranty has been discovered by the buyer is a condition precedent to a suit by the buyer for breach of warranty.

 

                                           

 

22. In an action by a third party against the buyer that is based on the seller's breach of warranty, the buyer must give notice of the action to the seller.

 

                                           

 

23. A buyer who cancels a sales contract because the seller fails to deliver the goods is entitled to recover as much of the purchase price as had been paid.

 

                                           

 

24. A buyer who elects to cancel a contract because of the seller's breach may not later sue for breach of contract.

 

                                           

 

25. A buyer may sue the seller for damages caused by the seller's fraud even if the buyer is barred by the UCC from suing for damages for breach of warranty.

 

                                           

 

26. Under UCC Article 2, specific performance is a remedy available only to buyers in those circumstances in which the goods are specially manufactured, unique, or rare.

 

                                           

 

27. If consumer goods are sold under a contract that excludes consequential damages, and the buyer is later physically injured because of a defect in the goods, the exclusion of consequential damages is prima facie unconscionable and is not binding.

 

                                           

 

28. A buyer who breaches a contract after making a down payment generally will be subject to the rule that the seller may retain the full down payment as damages.

 

                                           

 

29. A liquidated damages clause is a contractual provision stipulating the amount of damages to be paid in the event of default or breach of contract.

 

                                           

 

30. Under both the CISG and the UCC, a buyer may reject goods only if the tender of the goods is a fundamental breach of the contract.