RV Company Agrees to Buy a Certain Quantity of Vintage

question 38

Multiple Choice

RV Company agrees to buy a certain quantity of vintage campers from Sales Inc. Their contract limits consequential damages for lost profits resulting from the use of the goods. This limit is not necessarily unconscionable because

• A)the loss would be commercial in nature.
• B)consequential damages cover only reasonable foreseeable losses.
• C)lost profits are indirect losses.
• D)the transaction is a sale, not a lease.

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Definitions:

Implied Warranty

An unstated guarantee that goods sold or services provided meet certain quality standards and fit for the purpose intended.

Breach

A violation or infraction of a law, obligation, tie, or standard.

Secured Interest

A legal claim or lien on collateral that has been pledged, often in relation to loans, to secure payment.

Deposit

A sum of money placed in trust or paid as a first installment on the purchase of something or as a guarantee of the buyer's intent to complete the purchase.