Mann_BLRB 9_TB_Ch23

Business Law and the Regulation of Business

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Chapter 23—Sales Remedies TRUE/FALSE 1. The Code's remedies are cumulative, therefore, a seller may both withhold delivery of the goods and identify goods to the contract. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 2. A company may be considered insolvent under the Code if it is unable to pay its debts as they are due. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 3. If the buyer is insolvent and has not paid for goods it has received, the seller may reclaim the goods. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 4. Demrow Co., which contracted to buy 400 fishing poles from Royal Industries, anticipatorily breached the contract. Royal may proceed to identify to the contract conforming goods in its possession so that it can exercise the remedy of resale of the goods. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 5. Under the CISG, if the buyer fails to perform any obligations, the seller may either require the buyer to pay the price or fix an additional period of time for the buyer to perform. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 6. Robert paid William $1,000 for a rare first edition of an Edgar Allen Poe novel. The sales contract states that the book is to be delivered within ten days. William, however, refused to deliver the book as promised. In order to sue for specific performance under the UCC, Robert must prove that money damages will not be adequate compensation for his loss. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 7. Under the CISG, avoidance of a contract cancels any provision for settlement of disputes. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 8. Remedies need to address not only the type of breach of contract but also the situation with respect to the goods. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 9. Since the purpose of remedies under the Code is compensation, punitive damages are generally avail- able. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 10. The recovery for a lessee's wrongful repudiation of a lease is the difference between the present value of the old rent due under the original lease and the market rent.
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ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 11. A buyer who does not cover is precluded from consequential damages that could have been prevented if the buyer did obtain cover. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 12. One hundred crystal flower vases have been identified to the contract and a down payment of $1,000 of the $10,000 purchase price has been paid. If the seller becomes insolvent, the buyer may still pay $9,000 and get the goods. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 13. If the buyer received goods on credit while he was insolvent by misrepresenting his solvency, the seller is able to reclaim the goods only if the seller makes a demand on the buyer within ten days after the buyer has received the goods. ANS: F
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Mann_BLRB 9_TB_Ch23 - Chapter 23-Sales Remedies TRUE/FALSE...

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