Arnold buys a backhoe from Big Dig Equipment Inc. Arnold is unaware that Credit Collection Company holds a lien against the backhoe when he buys it. If Credit Collection repossesses the backhoe, Arnold can

recover from Big Dig for breach of warranty.

River Vista Inc. Enters into a contract with Stable Realty Management to manage and maintain River Vista’s commercial real estate. Their contract provides that neither party can recover damages for a non-fraudulent or unintentional breach. This is

a limitation-of-liability clause

Global Enterprise enters into a contract with HealthCare Insurance to obtain insurance for Global employees. HealthCare breaches the contract and Global is awarded compensatory damages. The purpose is to

provide Global with funds for its loss of the bargain

Asian Noodle Company contracts to sell 1,000 cases of rice noodles to Bob’s Bistros, Inc., but refuses to deliver. Bob’s right to obtain substitute goods for those that were due under the contract is the right to obtain

cover

Business Rental Corporation (BRC) and Cartage Trucking Company enter into a contract for a lease of ten hydraulic lifts. Under the perfect tender rule, BRC must ship or tender goods to the lessee that

conform to the contract description in every way.

Band Instruments, Inc., sells seventy-six trombones to Community & School Band Source, Inc. To avoid liability for most implied warranties, Band Instruments should state in writing that the trombones are sold

as is.

Beginners Run Ski Shop sells a pair of skis to Crystal. When Crystal first uses the skis, they snap in two. The cause is something Beginners Run did not know about and could not have discovered. Beginners Run breached

the implied warranty of merchantability.

Brian, an agent for Clarion Motors, Inc., writes a letter on behalf of Clarion Motors to Dina on November 1 stating that he will sell her a 2016 Subaru Outback for $20,000 between November 1 and December 31. Brian’s letter to Dina is

a merchant’s firm offer.

Barley that fills County Grain Co-op’s silo is fungible if the barley is

alike naturally, by agreement, or by trade usage.

Beef Burgers, Inc. contracts to buy five hundred head of cattle from Cattle Ranch. Before the seller delivers, an outbreak of disease causes a quarantine of the ranch. In this circumstance, the perfect tender rule

no longer applies.

Brad buys a bulldozer from Construction Equipment Corporation, which he leases to Deep Digg, Inc. In this situation, the lessee is

Deep Digg, Inc.

Big Beef, Inc. raises calves to sell. Big Beef breeds its cows in April, and the cows calve in February of the following year. In January Andrea contracts with Big Beef to buy fifty calves. Identification takes place in

April when the calves are conceived.

Brad leaves an iPod at Computer Sales & Repair (CSR) to have the battery replaced. CSR sells the iPod to Doris, who does not know that it belongs to Brad. Brad can recover from

CSR

Candy Corporation orders Double Chocolate Bars from Edibles Distribution Company. Edibles identifies the goods. Before they are shipped to Candy Corporation, an insurable interest in the goods exists in

both Candy and Edibles.

Containers, Inc., sends its standard order form to Distribution Corporation to evidence a sale of packing materials. Distribution responds with its own standard purchase order form. Additional terms in the purchase order automatically become part of the contract unless

any of these choices.

Chord Guitars Inc. sells guitars to consumers. A Chord salesperson says to a potential customer, “This Chord is the best guitar you’ll find anywhere.” This statement is

puffery

Car n’ Truck Body & Paint Company orders custom paint from Diverse Hues Inc., but Diverse does not deliver. Car n' Truck will probably be unable to enforce the agreement if the parties omitted

a quantity term.

Dante buys a new car from U-Drive-It Car Lot. In the first month, the car breaks down six times. Each time, Dante takes the car to his local mechanic, without contacting the dealership. Finally, he gives up on the mechanic being able to fix the car, and demands his money back from the deal. Dante will

not be successful because he did not notify the dealer and give it an opportunity to cure the problem.

Elegant Carpets, Inc., and Fantastic Floors enter into a contract for a sale of carpeting to be delivered under a shipment contract. This contract requires Elegant Carpets, the seller, to

place the goods into the hands of a carrier.

Farmers Produce, Inc., and Growers Market enter into a contract for the delivery of locally grown fruits and vegetables. The parties use a standard Farmers Produce form that contains some of the terms the parties agree on but not others. Some of the produce spoils before it can be cooked, served, and eaten, or sold. Growers Market refuses to pay for the spoiled goods. Farmers Produce responds that it did not waive payment for spoiled goods in the parties’ previous transaction. Farmers Produce is arguing that the court should take into account

the course of dealing.

Fred buys running shoes from Gear Store, telling the clerk that he wants the shoes to compete in High Pace Triathlon. The shoes break apart during the competition, causing Fred to fall and sustain an injury. The seller most likely breached

an implied warranty of fitness for a particular purpose.

Grocers Mart buys one hundred cases of berries from Hilltop Farms. The parties agree that the berries will be transported “F.O.B. Hilltop Farms” via Refrigerated Trucking Company. Refrigerated’s truck and the berries are lost in a fire following an accident. The loss of the berries is suffered by

Grocers.

HandiTools, Inc., sells power tools, power tool parts, and related supplies under “full” warranties. Under the Magnuson-Moss Warranty Act, this means that HandiTools must provide

free repair or replacement of any defective part.

In a dispute over a sale involving a bicycle, Dain argues that as to this deal Ed’s Hobby Shop, where Dain bought the bike, is a merchant. A court may determine whether Ed’s is a merchant by assessing whether

it holds itself out by occupation as having knowledge or skill unique to the bike in the transaction.

Jack sells a grand piano to Kyle for $5,000 and a gold ring to Lauren for $999. A writing is required to enforce the sale of

the piano and the gold ring.

Liz buys a car from Midtown Motors, paying with a check that is later dishonored. Liz later offers the car to Nick for cash. As the seller in the transaction with Nick, Liz’s title to the car is

voidable.

Physicians Clinic orders by phone seven boxes of single-use latex gloves from Quality Medical Supplies, Inc. After three boxes are delivered and accepted, Physicians Clinic repudiates the contract. Quality Medical can enforce the contract to

the extent of three three accepted boxes

Marcos buys a pneumatic drill from NuTools Inc. Owen leases a table saw from Piecework Tools Sales & Lease Company. Later, Marcos and Owen become aware of defects in the goods that indicate breaches of warranty. An action for breach of warranty accrues when

the seller or lessor tenders’ delivery.

Medico Inc. enters into a contract to sell medical supplies to New Hospital Corporation, which sells some of the items to Physicians Clinic, which later sells them to Oscar, a patient and consumer. Article 2 of the UCC applies to the sales of transactions between

all buyers and sellers.

Minerals Ltd. Contracts to provide several manufactures with tin. When a cartel of tin-producing countries suddenly embargoes future shipments of tin to Minerals so that it cannot fulfill its contracts, the distributor

is excused from the performance of its contracts.

NutriRich, Inc., sells fifty cases of Omega 3 capsules to Good Health stores, but before Good Health takes physical possession, the cases are lost. Under the UCC, the parties’ rights and obligations with respect to the loss depends on the concept of

risk of loss.

Ocean Vessels, Inc., and Pacific Harbor Company enter into a contract for a sale of a boat. Ocean is a merchant who deals in goods of the kind sold. The goods are defective. Under the UCC, the implied warranty of merchantability is breached

regardless of what Ocean knew or could have discovered.

Outdoor Outfitters Store contracts to buy fifty tents from Pitched Camp, Inc. Unless the contract states otherwise, it is assumed to be

a shipment contract.

Omni Metals Company and Piecework Fabrication, Inc., enter into a contract under which Omni agrees to deliver a certain quantity of sheet metal to Piecework each month. The contract does not include a price term. In a suit between the parties over the price, a court will

determine a reasonable price at the time for delivery.

On July 10, Pet Supply Store orders fifty small dog collars from Quality Collars, Inc. to be delivered by July 15. On July 13, Quality Collars tenders fifty large dog collars. Pet Supply rejects the shipment. Quality Collars has

until July 15 to cure.

Phoenix, a salesperson for Quality Fruit, Inc., shows Robert, a buyer for Sweet Home Fruit Company, samples of peaches, stating that any shipment will match the samples. This statement is

an express warranty.

Pine Mills Inc. and Quality Lumber Company enter into a contract for a sale of plywood to be delivered under a destination contract. This contract requires Pine Mills, the seller, to

deliver the goods to a particular destination.

Pipes & Culverts Company orders six irrigation pumps from Quality Plumbing, Inc. The pumps are stored in Restorers Warehouse. Under the terms of the order, Quality must give Pipes & Culverts a warehouse receipt for the goods, which the buyer will then pick up. Title to the goods passes to Pipes & Culverts when

Quality gives Pipes a warehouse receipt for the pumps.

Pavers Inc. contracts to buy some heavy equipment from Earthmovers, Inc. Before either party performs, Earthmovers sells its assets to Excavation Corporation. On learning of the sale, Pavers is concerned about its contract with Earthmovers. Pavers should

demand assurances of performance from the seller.

Quest Outdoor Store orders RiverRun-brand kayaks from Sports Merchandise, Inc. Sports Merchandise mistakenly ships kayaks of the wrong size, which Quest rejects and returns via Trans-State Shipping Company. During the return, the kayaks are lost. The loss is suffered by

Sports Merchandise.

Refined Grains, Inc., agrees to sell to Sunny Cereal Company a certain quantity of refined oats each week but no mention is made of where the goods are to be delivered. In general, the UCC requires that the delivery take place at

Refined’s place of business.

Rice River Farms, who only produces Grade A quality rice, offers to sell Sensei Restaurants, Inc. five hundred bushels of rice. Sensei responds, “We agree to buy five hundred bushels only if the rice is Grade A quality.” This statement is

an acceptance.

TackMaker, Inc., and Silver Stallion Stables enter into a contract for a sale of bridles, saddlery, and other equine equipment. TackMaker delivers, but Silver Stallion does not pay. TackMaker can normally recover as damages

the purchase price plus incidental damages.

Tarts & Pies Bakery contracts with Sweet Fruits for strawberries to be delivered by Refrigerated Trucking Company. On the day of delivery, the refrigeration on the trucks is not working. Sweet Fruits

may ship the strawberries to the buyer using a different carrier.