1. If the seller fails or refuses to deliver the goods called for under the contract, the buyer has a right to buy substitute goods, i.e. to ______.
resell
cover
request incidental damages
request consequential damages
cancel
2. Suppose that Fast Printers is manufacturing a line of printers exclusively for the Michigan College. Once the order is half complete, the College experiences a budget cut and is forced to cancel the order. Which of the following is Fast's best option, assuming that the cheapest option would be to complete manufacturing the goods:
Complete manufacture of the goods, regardless of whether they could be sold elsewhere for the contract price.
Cancel the contract.
File criminal charges against the College.
Complete manufacture of the goods, assuming they could be sold elsewhere for the contract price.
Stop manufacturing the goods and sell the uncompleted goods for scrap.
3. Which of the following is not a good application of a liquidated damages provision?
A new computer when the cost of nondelivery is unknown.
A contractor working on a new type of home design in an isolated valley.
A paper order from an office supply company.
Building contracts for late performance.
A research and development center building a new type of microprocessor for a computer company.
4. Suppose that a small wine merchant orders a shipment of wine from Jackson Creek Winery. Jackson Creek ships the wine to the merchant, but discovers that the merchant is in fact insolvent. It requests that the carrier return the shipment to Jackson Creek, which the merchant protests. Jackson Creek sues the merchant when it refuses to pay the shipping costs. This is an example of ___________. Jackson Creek will likely _________ in its lawsuit.
seller's right to stop delivery; fail
seller's right to stop delivery; succeed
seller's right to liquidated damages; fail
seller's right to cancel contracts; succeed
seller's right to recover the purchase price; fail
5. Jake, a farmer from Kentucky, orders corn seed from Palmer, a farmer in Illinois. The seed does not arrive, and Jake sues for specific performance. Jake's suit will likely be __________, because ___________
successful; corn seed is not a "good."
unsuccessful; corn seed is unique.
unsuccessful; corn seed is not unique.
successful; corn seed is not unique.
unsuccessful; they are not merchants.