Multiple Choice Questions
1. CPA QUESTION Cara Fabricating Co. and Taso Corp. agreed orally that Taso would custom
manufacture a compressor for Cara at a price of $120,000. After Taso completed the work at a cost of
$90,000, Cara notified Taso that the compressor was no longer needed. Taso is holding the
compressor and has requested payment from Cara. Taso has been unable to resell the compressor for
any price. Taso incurred storage fees of $2,000. If Cara refuses to pay Taso and Taso sues Cara, the
most Taso will be entitled to recover is:
(a) $92,000
(b) $105,000
(c) $120,000
(d) $122,000
Answer: D. CPA Examination, November 1993, #57.
2. CPA QUESTION On February 15, Mazur Corp. contracted to sell 1,000 bushels of wheat to Good
Bread, Inc., at $6 per bushel with delivery to be made on June 23. On June 1, Good advised Mazur
that it would not accept or pay for the wheat. On June 2, Mazur sold the wheat to another customer at
the market price of $5 per bushel. Mazur had advised Good that it intended to resell the wheat. Which
of the following statements is correct?
(a) Mazur can successfully sue Good for the difference between the resale price and the contract
price.
(b) Mazur can resell the wheat only after June 23.
(c) Good can retract its anticipatory breach at any time before June 23.
(d) Good can successfully sue Mazur for specific performance.
Answer: A. CPA Examination, May 1992, #56.
3.Under the UCC, to tender delivery, a seller must:
(a) Make the goods available at a reasonable time,
(b) Keep the goods available for a reasonable period
(c) Deliver to the buyer any documents that it needs to take possession
(d) All of the above
(e) None of the above
Answer: D
4. Blackburn FC (go Rovers!) orders 10,000 soccer jerseys from Alpha Co. to sell in its stadium store.
They are to be delivered on July 10. When they arrive early on July 2, Blackburn is disappointed
because the collars, which are supposed to be white, are blue. Blackburn notifies Alpha of the error.
Alpha says that it wants a chance to "make it right". If Alpha delivers another shipment of 10,000
conforming jerseys on July 10, Blackburn…
(a) absolutely must accept the new shipment
(b) must accept the new shipment if Alpha offers a reasonable discount
(c) must accept the new shipment if it has suffered no measureable losses
(d) may accept the new shipment, but has the option to reject it.
Answer: A
5. Assume that a year has passed, and Blackburn FC once again orders 10,000 soccer jerseys from Alpha
to be delivered on July 10. This time, nonconforming jerseys are delivered on July 10. Alpha
thoroughly inspected the shirts before shipping, and had no reason to spot the error. When Blackburn
notifies Alpha of the problem, Alpha says that it intends to cure the defect. If Blackburn cannot show
that it will suffer any serious harm, does the UCC require Blackburn to give Alpha a chance to cure
this time?
(a) No, because the contract's deadline has passed.
(b) Yes, it must give Alpha until July 17 to cure.
(c) Yes, it must give Alpha until July 20 to cure.
(d) Yes, it must give Alpha a reasonable amount of time to cure.
Answer: D