Assume that Sherrie's Cherries contracts with Dessert World to sell and ship 600 pounds of cherries in three equal installments of 200 pounds each. If the first installment arrives with 5 pounds of spoilage, then Dessert World may:

A. Reject the installment shipment because of the perfect tender rule.
B. Not reject the installment if those in the food industry expect a small percentage of spoilage with fresh fruits or vegetables.
C. Reject the entire contract.
D. Declare a breach and "cover."

If the first installment of 200 pounds of cherries arrives with 5 pounds of spoilage, Dessert World may not reject the installment if those in the food industry expect a small percentage of spoilage with fresh fruits or vegetables.

This is because of the implied warranty of merchantability, which applies to the sale of goods. The implied warranty of merchantability guarantees that goods being sold are fit for their ordinary purpose, free from defects, and of at least average quality.

In the food industry, it is common knowledge that a small percentage of spoilage can be expected in fresh fruits or vegetables. This is known as the "industry standard," which is a recognized level of quality and performance commonly accepted in a particular industry.

Therefore, if the spoilage is within the industry standard, then Dessert World cannot reject the installment based on the perfect tender rule, which requires that the goods be delivered exactly as specified in the contract. However, if the spoilage exceeds the industry standard or makes the cherries unusable, Dessert World may reject the installment, declare a breach, and cover.

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