TJ_Comp 20_TB_Ch27

TJ_Comp 20_TB_Ch27 - Chapter 27REMEDIES FOR BREACH OF SALES...

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Chapter 27—REMEDIES FOR BREACH OF SALES CONTRACTS TRUE/FALSE 1. The UCC provides the statute of limitations for the sale of goods when suit is brought on a tort theory. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 2. An action for breach of warranty generally must be brought within four years of the breach. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 3. When an express warranty is made regarding future performance, the time period of the statute of lim- itations for a suit by the buyer begins on the date when the future performance begins. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 4. Notifying a seller about a defect is not necessary if the buyer files suit for breach within four years. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 5. If a buyer sues a remote manufacturer on the theory that the manufacturer was negligent, the buyer may bring suit within the period of the Code statute of limitations even though a non-Code personal in- jury statute provides a shorter period of time for suit. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 6. When a sales contract is broken by the buyer, the seller has only the remedies of lien and resale avail- able. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 7. A seller's lien on goods is lost when the seller gives the goods to a carrier for shipment to the buyer. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 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. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 9. When a buyer wrongfully rejects goods, the seller may cancel the contract. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 10. If a buyer wrongfully refuses to accept goods, the seller may sue the buyer for the purchase price. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 11. If a buyer refuses to pay for goods after an acceptance that was not revoked, the seller may bring ac- tion to recover the purchase price and any incidental damages.
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ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 12. Generally, when the buyer breaches the contract, the seller's damages include a reasonable amount for attorney's fees. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 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. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 14. When a seller tenders a mixture of conforming units and nonconforming units, the buyer must reject all or accept all. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 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. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 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.
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