Asked by Adrianaya Roettger on Apr 27, 2024
Verified
Fred's Fireplaces enters into a contract with Miguel's Patio Supply in which Miguel's agrees to purchase 20 fireplaces. Miguel fails to pay and Fred's Fireplaces, upon discovering that Miguel is insolvent, 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 never appropriate .
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, because the UCC allows a seller to stop delivery of goods that are in transit.
Insolvent
A financial state in which an individual or an entity cannot meet their debt obligations as they come due because their assets do not exceed their liabilities.
UCC
In the United States, the Uniform Commercial Code is a detailed compilation of statutes that regulate commercial dealings.
Stopping Delivery
Halting the shipment of goods, often by the seller, under specific circumstances outlined in a sales or shipping agreement.
- Identify the entitlements and solutions available to sellers and lessors according to the Uniform Commercial Code (UCC) in response to contractual breaches by purchasers or lessees.
Verified Answer
TC
Tanner Cereghino
Apr 29, 2024
Final Answer :
E
Explanation :
The Uniform Commercial Code (UCC) permits a seller to stop delivery of goods in transit under certain circumstances, such as the buyer's insolvency, which is the case here with Miguel's Patio Supply.
Learning Objectives
- Identify the entitlements and solutions available to sellers and lessors according to the Uniform Commercial Code (UCC) in response to contractual breaches by purchasers or lessees.