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QUESTION 1

  1. Vermont Pottery had a contract with Heidi's Homeware for twelve dozen

dinnerware sets to be delivered in four equal installments. Vermont Pottery has made two deliveries, for which Heidi's Homeware has not yet paid. A third delivery is in transit on Rapid Lines, a common carrier. Vermont Pottery has learned that Heidi's Homeware is insolvent and that Heidi's Homeware already sold the dinnerware in the first shipment to customers who paid for the goods and took them home. What are Vermont Pottery's rights regarding the shipment in transit?

A ) Vermont Pottery can stop the delivery so long as it is a truckload or carload.

B) Vermont Pottery can stop the delivery even if it is less than a truckload or carload.

C) Vermont Pottery cannot stop the delivery if the goods are being shipped under a shipment contract.

D)Vermont Pottery cannot stop the delivery if the goods are being shipped under a destination contract.


QUESTION 2

  1. Under the Code, a party is ________ if they cease to pay debts in the ordinary course of business, or cannot pay debts as they come due?

a) delinquent

B) insolvent

C)bankrupt

D) insecure


QUESTION 3

  1. Sid bought a hammer at a local hardware store. When he tried to drive a spike into a landscaping timber with the hammer, the head broke off and broke Sid's nose. Has the manufacturer of the hammer breached an implied warranty of merchantability?

A) Yes, if one person is injured by a product, it is prima facie evidence that the product is not merchantable.

B) No, no reasonable person would drive a spike into a landscaping timber with a hammer.

C) Yes, because manufacturers are absolute insurers of the safety of their products.

D) No, because a product is merchantable if it is fit for the ordinary purpose for which it is intended and driving spikes is outside the purpose of an ordinary hammer.

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