1) Sheila desperately needed money, so she took her ring (which was worth $1000) to Paul's Pawn Shop. The Pawn Shop and Sheila signed an agreement, and the essential terms stated that Sheila received from the Pawn Shop $500 cash for a 60-day period. If Sheila returned within 60 days with $750, she would receive her ring back. If she did not, the Pawn Shop would be free to sell the ring after 60 days. Within the 60-day period, Sheila returned to the Pawn Shop to exchange $750 for her ring. However, the Pawn Shop had already sold the ring to Fred's Fine Antique Jewelry for $1000. Fred's Jewelry is a retail establishment that regularly sells rings and other fine old jewelry. Fred's had no knowledge of the agreement between Sheila and Paul's Pawn Shop. Sheila sues Fred's for return of her ring. Under these facts:

A.Fred's will likely be able to keep the ring, because it bought it in good faith and without knowledge of Sheila's ownership.

B.Fred's will likely be able to keep the ring, because it buys jewelry in the regular course of business

.C.Fred's will likely be able to keep the ring, because Sheila has no legal recourse against Paul's Pawn Shop; therefore, she has no legal recourse against Fred's.

D.Both A and B.E.All of the above.

2) On May 1, 2003 Seller contracts to sell Buyer a toaster that it warrants for five years. On May 5, 2003, Seller delivers the toaster to Buyer. The toaster self-destructs on April 30, 2004, but Buyer is out of town and does not discover (and could not have discovered) this until May 3, 2004. Buyer does not sue Seller until May 6, 2007. Has Buyer sued within the time period permitted by Article 2's statute of limitations?

A.No, because the lawsuit was filed more than 4 years after Seller purchased the toaster.

B.No, because the lawsuit was filed more than 4 years after Seller delivered the toaster.

C.Yes, because the lawsuit was filed within 4 years after Buyer discovered the toaster's defect.

D.Yes, because the toaster was still under its five year warranty.

3) If a seller breaches his contract with a buyer, which of the following remedies is the buyer least likely to obtain? Assume that the goods in question can be obtained elsewhere.

A.Buying substitute goods and recovering any associated extra expense from the seller.

B.Recovering the difference between the contract price and the market price of the goods.

C.Recovering the difference between the value of the goods the buyer received and the value of the nonconforming goods the buyer actually received.

D.Specific performance of the contract.

4) Ace, who resides in New York, contracts to buy goods from Bob's Blankets, who does business in Chicago. The contract says that shipment is "FOB Chicago." This means, among other things, that the risk of loss stays with Bob's until it delivers the goods to a carrier in Chicago.

True

False

5) Certain that Al Gore would emerge victorious from the post-election chaos, Melvin's Decorations ordered 50,000 "President Al Gore" medallions from Medallions, Inc. on December 1, 2000 for $5 per medallion. Delivery was to be on January 10, 2001. By that date, the value of the medallions had fallen to $1 per medallion. Melvin's Decorations refused to accept the medallions because it was clear that George Bush would keep the presidency, and Medallions, Inc. sued for Melvin's breach. What can Medallions recover? (Assume that there was nothing wrong with the medallions and that Melvin's did breach the contract).

A.Medallions' lost profit on the deal.

B.The difference between the contract price and the market price.

C.Either A or B.

D.Neither A nor B.