Mulligan Domestics Co

question 30

Multiple Choice

Mulligan Domestics Co.breached a contract by refusing to accept its order for 60 bolts of fabric from Wellington Mills,although the fabric met the contract specifications.In this situation,Wellington Mills

• A)has at least four remedies under the UCC.
• B)may resell the fabric to someone else and,if it sues Mulligan,Wellington Mills will be awarded the full contract price.
• C)may choose not to resell the fabric and settle for the difference between the contract price and the market value.
• D)would be awarded consequential damages by most courts.

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Definitions:

Debtor

An individual or entity that owes money or is under financial obligation to another, typically as a result of borrowing funds or purchasing goods/services on credit.

Collateral

Assets that are offered to secure a loan or other credit and that can be seized by the lender if the loan is unpaid.

Secured Parties

Creditors who have the right to seize collateral if a debtor fails to fulfill their obligation under a secured agreement.

Unsecured Creditors

Creditors who have extended credit without the protection of collateral, making their claims on a debtor’s assets secondary to those of secured creditors.