LSU BLAW 3201 Chap 024 MCQs and Short Question Answer

Chapter 24
Remedies for Breach of Sales and Lease
Contracts

True / False Questions

1. The UCC adopts several common law principles.
True False

2. Contract actions are created to enforce the
intentions of the parties to the agreement, while tort law is primarily
designed to vindicate social policy.
True False

3. The UCC does not allow a seller to cancel a
contract if the buyer is in breach.
True False

4. A seller or lessor is allowed to sell goods to
another buyer when the original buyer is in breach and the goods have not yet
been delivered.
True False

5. Liquidated damages are identified after a contract
breach occurs.
True False

6. In transit means that the seller or lessor has
delivered the goods to a carrier or bailee, but the carrier or bailee has not
yet turned them over to the buyer.
True False

7. The term “cover” refers to buyers or
lessees substituting goods for those due under a sales or lease
agreement.
True False

8. Specific performance usually requires that the
seller or lessor cover.
True False

9. The case of Hill v. Gateway, discussed in
the text, ruled that in order to be effective, a contract must be verbally read
to a consumer who purchases a computer over the telephone.
True False

10. If a buyer accepts nonconforming goods, the buyer
may not also seek damages.
True False

Multiple Choice Questions

11. The obligations of sellers/ lessors and buyers/
lessees are determined by which of the following?
A. Terms the parties outline in agreements
B. Custom
C. Rules outlined by the Uniform Commercial Code
D. All the above
E. Terms the parties outline in agreements and rules outlined by the
Uniform Commercial Code, but not custom

12. What is the basic premise of contract law?
A. To effectuate the expectations of the parties to an agreement
B. To promote commerce
C. To promote economic growth
D. To promote interstate commerce
E. To encourage a free-market society and greater financial security for
the parties

13. What type of remedy does the UCC give buyers and
lessees when the other party has breached a contract?
A. The benefit of the bargain
B. Any amounts of money lost plus 10%
C. Any amounts of money lost plus 15%
D. Any amounts of money lost plus 20%
E. Any amounts of money lost plus 25%

14. Which of the following is a remedy available to
the seller if the buyer fails to pay according to the terms of the
agreement?
A. Sellers may withhold delivery of goods.
B. Sellers may sell undelivered goods to another buyer.
C. Sellers may put a lien on any property of the buyer.
D. Sellers may withhold delivery of goods, sellers may sell the goods to
another buyer, and sellers may put a lien on any property of the buyer.
E. Sellers may withhold delivery of goods and sellers may sell the goods
to another buyer, but sellers may not put a lien on any property of the buyer.

15. Which of the following was the result in the case
in the text Troy Boiler Works, Inc. v. Sterile Technologies, Inc.,
when the plaintiff, who was sued to recover amounts due on a sterilizer
purchased from the defendant, claimed that a six-year statute of limitations
governing actions to collect money on account applied rather than the four-year
statute of limitations derived from the UCC?
A. The court ruled that the six-year statute of limitations applied
because a sale of a good was the basis for the dispute.
B. The court ruled that the four-year statute of limitations applied
because a sale of a good was the basis for the dispute.
C. The court split the difference and ruled that a five-year statute of
limitations applied.
D. The court ruled that the six-year statute of limitations applied
because an action on an account receivable was the basis for the dispute.
E. The court ruled that the four-year statute of limitations applied
because an action on account receivable was the basis for the dispute.

16. Which of the following damages may a seller
receive who sells goods to another buyer when the original buyer is in
breach?
A. The difference between the resale price and the contract price, plus
incidental damages and minus expenses saved.
B. The difference between the resale price and the contract price only.
C. The difference between the resale price and the contract price minus
expenses without any allowance for incidental damages.
D. The difference between the resale price and the contract price, plus
incidental damages, with no deduction for expenses saved.
E. Nominal damages only.

17. Which of the following is true regarding the right
of a lessor to seek incidental damages in the event of a breach by a lessee of
goods?
A. A lessor may seek incidental damages only if the lessee agreed in
writing to pay them.
B. A lessor may seek incidental damages only if the lessee agreed orally
or in writing to pay them.
C. A lessor may seek incidental damages only if the damages are in an
amount over $500.
D. A lessor may seek incidental damages only if the damages are in an
amount over $1,000.
E. A lessor may seek incidental damages.

18. Which of the following are damages identified
before the breach occurs?
A. Nominal damages
B. Compensatory damages
C. Reliance damages
D. Liquidated damages
E. Consequential damages

19. Which of the following is true regarding a
liquidated damages provision?
A. A provision for liquidated damages is illegal.
B. A provision for liquidated damages is void because of public policy.
C. A provision for liquidated damages is voidable because of public
policy.
D. A provision for liquidated damages is enforceable so long as it is not
punitive in nature.
E. A provision for liquidated damages will be enforced regardless of
whether it is punitive in nature.

20. What does the UCC provide regarding liquidated
damages if the parties do not agree to them?
A. That the nonbreaching seller may claim against a breaching buyer 20
percent of the purchase price or $500, whichever is less, as liquidated
damages.
B. That the nonbreaching seller may claim against a breaching buyer 20
percent of the purchase price or $500, whichever is more, as liquidated damages.
C. That the nonbreaching seller may claim against a breaching buyer 30
percent of the purchase price or $1,000, whichever is less, as liquidated
damages.
D. That the nonbreaching seller may claim against a breaching buyer 30
percent of the purchase price or $1,000, whichever is more, as liquidated
damages.
E. Nothing because liquidated damages are unavailable unless the parties
have expressly agreed to them.

21. What does the UCC provide regarding the
availability of punitive damages?
A. That the nonbreaching seller may claim against a breaching buyer who is
guilty of malice 20 percent of the purchase price or $500, whichever is less,
as punitive damages.
B. That the nonbreaching seller may claim against a breaching buyer who is
guilty of malice 20 percent of the purchase price or $500, whichever is more,
as punitive damages.
C. That the nonbreaching seller may claim against a breaching buyer who is
guilty of malice 30 percent of the purchase price or $1,000, whichever is less,
as punitive damages.
D. That the nonbreaching seller may claim against a breaching buyer who is
guilty of malice 30 percent of the purchase price or $1,000, whichever is more,
as punitive damages.
E. Nothing

22. Which of the following was the result in Almetals,
Inc. v. Wickeder Westfalenstahl, GMBH, the case in the text involving the
sale of clad metal in which the plaintiff sued the defendant for breach of
contract seeking specific performance?
A. That specific performance was unavailable because real estate was not
involved.
B. That specific performance was unavailable because a foreign defendant
was involved and jurisdiction for specific performance was, therefore, lacking.
C. That specific performance was unavailable because the goods at issue
were scarce.
D. That specific performance was unavailable because a requirements
contract was involved.
E. That specific performance was the appropriate remedy.

23. Assuming a buyer that is insolvent has breached a
contract by not paying for goods that are in transit, which of the following
may occur?
A. The carrier may stop delivery on the entire shipment.
B. The carrier may stop delivery only if the quantity shipped is a large
shipment.
C. The carrier may stop delivery only if a signed writing exists by which
the buyer agreed to the remedy of stopping shipment.
D. The carrier may stop delivery only if ordered to do so by the
bankruptcy judge.
E. The carrier may not stop delivery under any circumstances.

24. Assuming a buyer that is not insolvent has
breached a contract by not paying for goods that are in transit, which of the
following may occur?
A. The carrier may stop delivery on the entire shipment.
B. The carrier may stop delivery only if the quantity shipped is a large
shipment.
C. The carrier may stop delivery only if a signed writing exists by which
the buyer agreed to the remedy of stopping shipment.
D. The carrier may stop delivery only if ordered to do so by the
bankruptcy judge.
E. The carrier may not stop delivery under any circumstances.

25. Under UCC 2-702(2), under which of the following
circumstances may a seller reclaim goods when a buyer is in possession of goods
and is in breach?
A. When the seller discovers the buyer is insolvent
B. When the buyer is at least five days late on a payment
C. When the buyer has received at least 10 days prior notification of
reclamation
D. All of the above
E. When the seller discovers the buyer is insolvent and when the buyer has
received at least 10 days prior notification of reclamation, but not when the
buyer is five days late on a payment.

26. Under UCC 2A-525(2) when may a lessor reclaim
goods when a lessese in possession of the goods is in breach?
A. When the lessor discovers the lessee is insolvent
B. When the lessee fails to make payments according to the lease terms
C. When the lessee has received at least 10 days prior notification of
reclamation
D. All of the above
E. When the lessor discovers that the lessee is insolvent and when the
lessee has received at least 10 days prior notification of reclamation, but not
when the lessee has failed to make payments according to the lease terms

27. Which of the following is the right of a buyer and
lessee to substitute goods for those due under a sales or lease
agreement?
A. Swap
B. Rearrange
C. Cover
D. Shift
E. Reallocate

28. Which of the following must a buyer do in
obtaining cover?
A. Demonstrate good faith in obtaining the substitute goods
B. Pay a reasonable amount for the substitute goods
C. Act without unreasonable delay in purchasing the substitute goods
D. All the above
E. Pay a reasonable amount for the substitute goods and act without
unreasonable delay in purchasing the substitute goods, but there is no good
faith requirement.

29. Assuming proper proof, which of the following
represents damages a buyer or lessee may recover in the event of a
breach?
A. Incidental damages
B. Consequential damages
C. Remedial damages
D. All the above
E. Incidental and consequential damages, but not remedial damages

30. Which of the following includes lost profits so
long as those damages are not too speculative?
A. Punitive damages
B. Consequential damages
C. Remedial damages
D. Nominal damages
E. Control damages

31. Under the UCC buyers and lessees may recover goods
identified in the contract if the seller or lessor becomes insolvent within
______ after receiving the first payment due under the agreement.
A. 5 days
B. 10 days
C. 15 days
D. 30 days
E. 60 days

32. Which of the following usually requires that the
seller or lessor deliver the particular goods identified in the contract?
A. Absolute order
B. Absolute performance
C. Specific performance
D. Specific order
E. None of the above

33. When does the UCC allow buyers and lessees to seek
the remedy of specific performance?
A. When goods are unique
B. When a remedy at law is inadequate
C. When goods are worth more than $500
D. When goods are unique, when a remedy at law is inadequate, or when
goods are worth more than $500
E. When goods are unique or when a remedy at law is inadequate, but not
because the goods are worth more than $500

34. Which of the following was the result in U.S.A.
Coil & Air, Inc. v. Hodess Building Co., the case in the text in
which the seller of cooling coils sued for the contract price and the defendant
counterclaimed for breach of contract?
A. That the seller was liable to the buyer for replacement costs.
B. That the buyer did not have to pay the seller contract costs but that
the buyer was not liable for replacement costs.
C. That neither party owed the other anything.
D. That the buyer was liable to the seller for the contract price.
E. That the buyer was liable to the seller for the contract price plus
attorney’s fees.

35. Which of the following may a buyer/lessee do when
the seller/lessor delivers nonconforming goods?
A. Reject the goods only
B. Obtain cover only
C. Cancel the contract only
D. Reject the goods, and then obtain cover or cancel the contract
E. Reject the goods and obtain cover, but the buyer may not cancel the
contract

36. Which of the following is true regarding revocation
of accepted nonconforming goods?
A. A buyer may revoke acceptance of nonconforming goods under some
circumstances, but a lessee may not.
B. A lessee may revoke acceptance of nonconforming goods under some
circumstances, but a buyer may not.
C. Neither a buyer nor a lessee may revoke acceptance of nonconforming
goods.
D. Neither a buyer nor a lessee may revoke acceptance of nonconforming
goods after the goods have remained accepted for a period of 24 hours.
E. A buyer or lessee may revoke acceptance of nonconforming goods if, for
example, the buyer/lessee made a reasonable assumption that the nonconformity
would be cured, but then the nonconformity was not cured within a reasonable
time.

37. What was the result in the case in the text Dunleavy
v. Paris Ceramics USA, Inc., the case in which French limestone was found
to be defective and the buyer sued the seller for a refund?
A. The buyer was not allowed to recover because the buyer refused the
defendant the right to cure.
B. The buyer was allowed to recover compensatory damages because the
seller’s efforts to cure were unsuccessful, and in addition the buyer was
allowed to recover punitive damages based on misrepresentations.
C. The buyer was allowed to recover because the seller did not offer to
cure.
D. The buyer was allowed to recover because the buyer had accepted the
goods and resold them to another party, and no right to cure existed.
E. The buyer was not allowed to recover because the seller properly cured
the problem.

38. Which of the following is true regarding buyers or
lessees who want to accept nonconforming goods and then seek monetary
damages?
A. Buyers and lessees are allowed to do so in order to receive the benefit
of the bargain, but they must give the seller/lessor reasonable notice of the
defect.
B. Buyers and lessees are allowed to do so in order to receive the benefit
of the bargain, and there is no requirement that they give the seller/lessor
prior notice of the defect.
C. Buyers may do so in order to receive the benefit of the bargain so long
as reasonable notice of the defect is given, but lessors may not.
D. Lessors may do so in order to receive the benefit of the bargain so
long as reasonable notice of the defect is given, but buyers may not.
E. Buyers and lessors may do so only if the seller/lessee agrees to the
retention of the nonconforming goods and does not request their return.

39. Which of the following provide remedies to buyers
of defective cars?
A. Apple laws
B. Lemon laws
C. Clunker laws
D. Roadside laws
E. Peach laws

40. Regarding the “Case Opener,” what did
the court rule regarding the liability of Abbott Industries following its
supply of 1.2 million tubes of bad eye medication to Altana, a customer, for
resale?
A. That Abbott industries was liable for the cost of the recall and
destruction of the defective medication, for the costs of employee overtime,
and for lost future sales because Altana was unable to meet its contractual
obligations.
B. That Abbott industries was liable for the cost of the recall and
destruction of the defective medication, for the costs of employee overtime,
and for lost future sales even though Altana was able to meet its contractual
obligations.
C. That Abbott industries was liable for the cost of the recall and
destruction of the defective medication and for the costs of employee overtime,
but not for lost future sales because Altana was able to meet its contractual
obligations.
D. That Altana was only entitled to receive cover, meaning substitution
for the defective medication.
E. That Altana was unable to recover anything because business people take
a risk that some shipments will be bad.

41. Which of the following is true of lemon laws in
Canada?
A. They are generally the same as lemon laws in the U.S.
B. They allow for replacement of defective parts but not a new car unless
the plaintiff agrees to pay the difference between the amount received for the
used car when sold and the amount charged for the new car.
C. They guarantee a buyer of a lemon a new car.
D. They guarantee the buyer of a lemon a return of all consideration.
E. Canada does not have a lemon law such as is known in the U.S. Instead,
an arbitration program is run through which a buyer may lodge complaints.

42. Sam contracted with Sharon, his cousin, to build a
building to house Sam’s new restaurant. Sam wanted the building completed by
October 15th so that he could advertise and get holiday business.
Sam and Sharon entered into an agreement by which Sharon would pay Sam $300 per
day for every day she was late. Which of the following is true regarding their
agreement?
A. It is known as a liquidated damages provision which will be enforced by
a court so long as it is not so far out of reasonable range as to be punitive
in nature.
B. It is known as a penalty provision which will be enforced by a court so
long as the plaintiff can establish proof of compensatory damages in at least
the amount of recovery requested.
C. It is known as a punitive damages provision which will be enforced by a
court only if wrongdoing or fraud on the part of the defendant can be
established.
D. It is known as a consequential damages provision which will be enforced
by a court only if incidental damages can be established.
E. It is known as an invalid provision which will not be enforced.

43. Under which of the following circumstances will a
court refuse to uphold modifications or limitations to remedies agreed upon by
the parties?
A. When they seem unfair.
B. When one party is a corporation.
C. When neither party is a corporation.
D. When one side was not represented by an attorney.
E. When the remedies fail in their essential purpose.

44. What does the UCC provide regarding a limitation
on consequential damages allowing for repair, replace, or refund in the event
of equipment malfunction?
A. That consequential damages may be limited or excluded unless the
limitation or exclusion benefits one party over the other.
B. That consequential damages may be limited or excluded unless the
limitation or exclusion is unconscionable.
C. That consequential damages may be limited but not excluded entirely.
D. That consequential damages may be limited but not excluded entirely,
and the limit must not benefit one party over the other.
E. That consequential damages may be limited but not excluded entirely,
and the limit must not be unconscionable.

45. What does the UCC say regarding a limitation of
consequential damages for injury to the person in the case of consumer
goods?
A. A limitation of consequential damages for injury to the person is acceptable
so long as both parties are represented by an attorney.
B. A limitation of consequential damages for injury to the person is
acceptable so long as any consumer was represented by an attorney.
C. A limitation of consequential damages for injury to the person is prima
facie unconscionable.
D. A limitation of consequential damages for injury to the person is
analyzed in the same way as a limitation of consequential damages where the
loss is commercial.
E. A limitation of consequential damages for injury to the person is
acceptable so long as the injuries are not life threatening.

46. What does the UCC say regarding a limitation of
consequential damages for commercial losses?
A. A limitation of consequential damages for commercial losses is
acceptable so long as both parties are represented by an attorney.
B. A limitation of consequential damages for commercial losses is
acceptable so long as any consumer was represented by an attorney.
C. A limitation of consequential damages for commercial losses is prima
facie unconscionable.
D. A limitation of consequential damages for commercial losses is analyzed
in the same way as a limitation of consequential damages for personal injury.
E. A limitation of consequential damages for commercial losses is not prima
facie unconscionable.

47. What are the rights of the parties under the UCC
to provide for remedies in addition to those provided by the UCC?
A. Parties to a commercial sales agreement may provide for remedies in
addition to those provided by the UCC.
B. Parties to a commercial sales agreement may not provide for remedies in
addition to those provided by the UCC.
C. Parties to a commercial sales agreement may provide for remedies in
addition to those provided by the UCC only if both sides are represented by an
attorney.
D. Parties to a commercial sales agreement may provide for remedies in
addition to those provided by the UCC only if both parties are merchants.
E. Parties to a commercial sales agreement may provide for remedies in
addition to those provided by the UCC only in transactions involving over
$10,000 in value.

48. Which of the following is true regarding whether
usage of trade may impose a remedy in the event of a breach?
A. Usage of trade may not impose a remedy in the event of a breach.
B. Usage of trade may impose a remedy in the event of a breach but it may
not impose an exclusive remedy.
C. Usage of trade may impose an exclusive remedy in the event of a breach.
D. Usage of trade may impose an exclusive remedy in the event of a breach
only if both sides are represented by an attorney.
E. Usage of trade may impose an exclusive remedy in the event of a breach
only if a contract signed by both parties specifically provides as such.

49. What was the result in the case of Figgie
International, Inc. v. Destileria Serralles, Inc., the case in the
book involving a dispute over bottle-labeling equipment?
A. The court ruled that the remedy of repair, replacement, or a refund
failed of its essential purpose.
B. The court ruled that the remedy of repair, replacement, or a refund did
not fail of its essential purpose, and the remedy was enforced.
C. The remedy of repair, replacement, or a refund was found unconscionable
and not enforced.
D. The remedy of repair, replacement, or a refund was found unconscionable
but enforced anyway.
E. The remedy of repair, replacement, or a refund was not enforced because
the buyer had not agreed to that remedy in writing.

50. Reference: “Missed Payments.” Robin
purchased a hot tub on an installment plan and was to pay the seller monthly.
Her last payment was made on January 2, 2002. The seller brought a lawsuit
against her for sums remaining on the account on January 3, 2007. Robin
defended on the basis that the statute of limitations had run. The seller
claimed, however, that appropriate time remained because a state law six-year
statute of limitations to collect money on account applied. Robin also arranged
to purchase a personal watercraft but failed to pay the deposit to the seller,
and the seller refused to deliver the watercraft. Robin claimed that the seller
was required to deliver the watercraft and allow her the opportunity to cover.
Under the UCC, how long does a plaintiff have to bring an action for breach of
contract for the sale of goods once the cause of action accrues?
A. One year
B. Two years
C. Three years
D. Four years
E. Five years

51. Reference: “Missed Payments.” Robin
purchased a hot tub on an installment plan and was to pay the seller monthly.
Her last payment was made on January 2, 2002. The seller brought a lawsuit
against her for sums remaining on the account on January 3, 2007. Robin
defended on the basis that the statute of limitations had run. The seller
claimed, however, that appropriate time remained because a state law six-year
statute of limitations to collect money on account applied. Robin also arranged
to purchase a personal watercraft but failed to pay the deposit to the seller,
and the seller refused to deliver the watercraft. Robin claimed that the seller
was required to deliver the watercraft and allow her the opportunity to cover.
Assuming that the state in which Robin lived had adopted the UCC statute of
limitations for the sale of goods, which of the following is true regarding
whether the court would likely apply the UCC statute, the six-year statute
applicable to accounts, or reach another result?
A. The court would likely apply the six-year statute applicable to
accounts.
B. The court would likely apply the UCC statute of limitations for the
sale of goods.
C. The court would likely apply the six-year statute applicable to
accounts but only because Robin is not a merchant.
D. The court would likely apply the UCC statute of limitations for the
sale of goods but only because Robin is not a merchant.
E. The court would likely disregard any statute of limitation on equitable
grounds because consumers should pay their debts.

52. Reference: “Missed Payments.” Robin
purchased a hot tub on an installment plan and was to pay the seller monthly.
Her last payment was made on January 2, 2002. The seller brought a lawsuit
against her for sums remaining on the account on January 3, 2007. Robin
defended on the basis that the statute of limitations had run. The seller
claimed, however, that appropriate time remained because a state law six-year
statute of limitations to collect money on account applied. Robin also arranged
to purchase a personal watercraft but failed to pay the deposit to the seller,
and the seller refused to deliver the watercraft. Robin claimed that the seller
was required to deliver the watercraft and allow her the opportunity to cover.
Which of the following is true regarding Robin’s claim that the watercraft
should have been delivered to her because she had a right to cover?
A. She had no right to cover and the seller should have delivered the
personal watercraft to her.
B. She had a right to cover only because she was a consumer, not a
merchant.
C. She had a right to cover but she was required to cover before the
personal watercraft had to be delivered.
D. She had no right to cover only because she was not a merchant.
E. She had no right to cover, and the merchant was not required to deliver
the personal watercraft.

53. Reference: “Refused Furniture.” Selina
arranges to sell furniture from her furniture store to Roland for $3,000.
Roland was supposed to give Selina a $500 deposit on February 1 and pay the
remainder in monthly installments. Selina was to deliver the furniture by
February 7. Roland did not pay Selina as promised on February 1. He asked her
to wait until March 1, but she refused. She told him that the contract was
cancelled, and she refused to deliver the furniture. Selina was able to sell
the furniture for only $2,500 because of a downturn in the economy. Roland told
Selina that she had no right to withhold or sell his furniture and that he was
suing. Selina also incurred $100 in additional amounts in advertising costs to
advertise the furniture that Roland initially purchased. Selina saved $40 in
delivery costs because she did not have to deliver the furniture to Roland. The
subsequent purchaser picked up her own furniture. Which of the following is
true regarding Roland’s claim that Selina had no right to withhold his
furniture?
A. Roland is correct. Selina was required to deliver the furniture, but
she retained the right to sue him for any deficiency.
B. Roland is correct but only because of the special UCC exception for
consumer goods.
C. Roland is incorrect. Selina had a right to withhold the furniture.
D. Roland is incorrect but only if Selina can prove that she had no reason
to believe that he was a credit risk prior to signing the contract of sale.
E. Roland is correct because of federal consumer protection laws.

54. Reference: “Refused Furniture.” Selina
arranges to sell furniture from her furniture store to Roland for $3,000.
Roland was supposed to give Selina a $500 deposit on February 1 and pay the
remainder in monthly installments. Selina was to deliver the furniture by
February 7. Roland did not pay Selina as promised on February 1. He asked her
to wait until March 1, but she refused. She told him that the contract was
cancelled, and she refused to deliver the furniture. Selina was able to sell
the furniture for only $2,500 because of a downturn in the economy. Roland told
Selina that she had no right to withhold or sell his furniture and that he was
suing. Selina also incurred $100 in additional amounts in advertising costs to
advertise the furniture that Roland initially purchased. Selina saved $40 in
delivery costs because she did not have to deliver the furniture to Roland. The
subsequent purchaser picked up her own furniture. Which of the following is
true regarding Roland’s claim that Selina had no right to sell the furniture he
initially purchased?
A. Roland is correct. Selina had no right to sell the furniture, but she
retained the right to sue him for any deficiency.
B. Roland is correct but only because of the special UCC exception for
consumer goods.
C. Roland is incorrect. Selina had a right to resell the furniture.
D. Roland is incorrect but only if Selina can prove that she had no reason
to believe that he was a credit risk prior to signing the contract of sale.
E. Roland is correct because of federal consumer protection laws.

55. Reference: “Refused Furniture.” Selina
arranges to sell furniture from her furniture store to Roland for $3,000.
Roland was supposed to give Selina a $500 deposit on February 1 and pay the
remainder in monthly installments. Selina was to deliver the furniture by
February 7. Roland did not pay Selina as promised on February 1. He asked her
to wait until March 1, but she refused. She told him that the contract was
cancelled, and she refused to deliver the furniture. Selina was able to sell
the furniture for only $2,500 because of a downturn in the economy. Roland told
Selina that she had no right to withhold or sell his furniture and that he was
suing. Selina also incurred $100 in additional amounts in advertising costs to
advertise the furniture that Roland initially purchased. Selina saved $40 in
delivery costs because she did not have to deliver the furniture to Roland. The
subsequent purchaser picked up her own furniture. Which of the following is
true regarding whether Selina had a right to cancel the contract?
A. Roland was in breach giving Selina the right to cancel the contract.
B. Roland was only in partial breach, and Selina had not right to cancel
the contract.
C. Roland was in breach, but Selina had no right to cancel the contract
because Roland had the right to cover.
D. Roland was in breach, but Selina had no right to cancel the contract
because a consumer transaction was involved.
E. Roland was in breach, but Selina had no right to cancel the contract
because Roland was available for service of process.

56. Reference: “Refused Furniture.” Selina
arranges to sell furniture from her furniture store to Roland for $3,000.
Roland was supposed to give Selina a $500 deposit on February 1 and pay the
remainder in monthly installments. Selina was to deliver the furniture by
February 7. Roland did not pay Selina as promised on February 1. He asked her
to wait until March 1, but she refused. She told him that the contract was
cancelled, and she refused to deliver the furniture. Selina was able to sell
the furniture for only $2,500 because of a downturn in the economy. Roland told
Selina that she had no right to withhold or sell his furniture and that he was
suing. Selina also incurred $100 in additional amounts in advertising costs to
advertise the furniture that Roland initially purchased. Selina saved $40 in
delivery costs beca