Fred's Fireplaces Enters into a Contract with Miguel's Patio Supply

question 47

Multiple Choice

Fred's Fireplaces enters into a contract with Miguel's Patio Supply in which Miguel's agrees to purchase 20 fireplaces. This is considered a small order. Miguel, who is still running a business and who is still solvent, fails to pay for the fireplaces. Fred's Fireplaces stops delivery as the fireplaces are on the way to Miguel. Did Fred's Fireplaces act appropriately?

• A) No because stopping delivery of goods in transit is permitted when the buyer is solvent only if the quantity shipped is large.
• B) No because filing a lawsuit is required before stopping delivery of goods in transit.
• C) No because stopping delivery of goods in transit is appropriate in the event of breach only if the contract is for at least 50 units of goods.
• D) No, because the UCC requires sellers to notify buyers within 100 days of stopping delivery of goods in transit in the event of a breach.
• E) Yes, a seller may stop delivery any time.

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Definitions:

Auto Leases

Contracts that allow a person to use a car for a set period of time in exchange for regular payments, without owning the vehicle.

Lessee

The party in a lease agreement that gains the right to use an asset in exchange for making payments to the lessor.

Lease

A contractual agreement allowing the lessee to use an asset owned by the lessor for a specified period in exchange for payment.

Lessee

An individual or entity that leases an asset from another, agreeing to make payments in exchange for using the asset for a specified period.