OH Bar Contracts and Sales 5

Question 1

A seller ships nonconforming goods in response to a buyer's purchase order but includes a note stating the goods are offered "only as an accommodation." What is the legal effect under the UCC?

Accepted Answer

The shipment is a counteroffer, not an acceptance, so there is no breach if the buyer rejects

Answer

The shipment is both an acceptance and a breach

Answer

The shipment is void and the seller owes cover damages

Answer

The note is irrelevant; shipping goods always accepts the offer

Question 2

A buyer contracts to purchase a machine, and after the seller's breach, the buyer purchases a reasonable substitute machine for $2,000 more than the contract price. What are the buyer's direct damages under the UCC?

Accepted Answer

$2,000, the difference between the cover price and the contract price, plus incidental damages

Answer

Nothing, because the buyer chose to cover

Answer

The full price of the substitute machine

Answer

The contract price of the original machine

Question 3

During negotiations to sell a violin both parties believe is a Stradivarius, they set the price at $500,000. It is later discovered to be a copy worth $2,000. What is the buyer's best argument to avoid the contract?

Accepted Answer

Mutual mistake as to a basic assumption that materially affects the exchange

Answer

Unilateral mistake by the buyer alone

Answer

Frustration of purpose

Answer

Failure of an express condition

Question 4

A contract states, "Payment is due only upon the architect's issuance of a certificate of completion." The builder performs fully, but the architect unreasonably and in bad faith withholds the certificate. Must the owner pay?

Accepted Answer

Yes, because the condition is excused when its non-occurrence results from bad faith or prevention

Answer

No, because express conditions must be strictly satisfied in all circumstances

Answer

No, because only the architect can waive the condition

Answer

Yes, but only half the contract price

Question 5

A consumer signs a form contract containing a hidden clause allowing the seller to repossess all items ever purchased if any single installment is missed. The consumer challenges the clause. What doctrine best supports striking it?

Accepted Answer

Unconscionability, given both the oppressive term and unfair surprise at formation

Answer

Impossibility of performance

Answer

The mailbox rule

Answer

Anticipatory repudiation

Question 6

A company hires a delivery service, telling it nothing about a lucrative milling contract that will be lost if a crankshaft is delivered late. The delivery is late and the mill loses profits. Can the company recover the lost profits from the carrier?

Accepted Answer

No, because consequential damages must be foreseeable to the breaching party at the time of contracting

Answer

Yes, because all losses flowing from breach are recoverable

Answer

Yes, because carriers are strictly liable for delay

Answer

No, because lost profits are never recoverable in contract

Question 7

A buyer of goods on credit becomes insolvent, and the seller learns of the insolvency while the goods are in transit. What may the seller do under the UCC?

Accepted Answer

Stop delivery of the goods in transit upon discovering the buyer's insolvency

Answer

Nothing, because title passed at shipment

Answer

Sue only for the price after delivery

Answer

Reclaim the goods at any time within one year