Commercial Law

  1. If a seller delivers goods according to her contract with buyer and the buyer wrongfully rejects the goods, the buyer is liable to the seller for breach of the sales contract. T or F
  2. The purchase price of a good is not generally a premium for insuring the item from all risk according to the Rhode Island Supreme court in Star-Shadow Productions, Inc. v. Super 8 Sync Sound Systems. T or F
  3. If the seller is in the process of manufacturing the goods when the buyer breaches the contract, the seller may
    A. complete manufacture of the goods and then resell them or she may stop manufacturing and sell the uncompleted goods for their scrap or salvage value, whichever is faster for the seller
    B. complete manufacture of the goods and then resell them or she may stop manufacturing and sell the uncompleted goods for their scrap or salvage value, so long as the option selected minimizes the loss.
    C. donate the completed goods or donate the scraps to charity and then sue the buyer for the total contract price
    D. None of the above.
  4. Kristoph and Lillian have a contract whereby Kristoph is to deliver 25 men’s suits at $100 per suit, to Lillian’s “Urbantown” boutique by February 15. Upon delivery, Lillian is to pay Kristoph $2,500 for the suits. Kristoph forgets to deliver the suits called for in the contract.
    A. One of Lillian’s options is to employ the implied remedy of the “self-help” doctrine by sending a private undercover agent to Kristoph’s shop and taking the 25 suits as long as there is no breach of the peace.
    B. One of Lillian’s options is to file a police report and have Kristoph arrested for the felony of negligent breach of contract.
    C. One of Lillian’s options allow her to “cover” by purchasing substitute goods from another suit manufacturer at the current market rate of $105 per suit, permitting her to recover $125 as damages from Kristoph, plus any incidental damages sustained.
    D. None of the above.
  5. The court in Star-Shadow Productions v. Super 8 Sync Sound System held that the Super 8 Sync Sound System’s limitation of liability clause contained on price sheets and film boxes provided to Star-Shadow was unconscionable and therefore unenforceable. T or F
  6. On February 1, Jan’s Manufacturing (seller), a southeastern Virginia sports memorabilia manufacturer, enters a binding contract with Sports, Inc. to design, produce and sell Sports, Inc. (buyer) 100,000 Washington Wizards bobble head dolls at $5.00 each with delivery to be made in the Washington, D.C. area on March 1. By March 1, the market for Washington Wizards bobble head dolls are softened because a competitor flooded the market. Now the dolls are selling everywhere for $3 each, and the current established market price is $3 per bobble head. Consequently, Sports, Inc. notifies Jan’s the night before the product is to be loaded on a truck and shipped that it is repudiating the contract. What is an option available to Jan’s Manufacturing?
    A. Jan’s is entitled to compensation at the rate of the new market price. This is $300,000 plus any incidental expenses, but less the expenses saved by not having to ship the bobble heads to Sports, Inc.
    B. Jan’s is entitled to difference between the contract price and the market price. This is $200,000 plus any incidental expenses, but less the expenses saved by not having to ship the bobble heads to Sports, Inc.
    C. Jan’s is not entitled to any contract damages because it is rational for Sports, Inc. to breach the contract given the new market price.
    D. None of the above.

Sample Solution

ACED ESSAYS