Question 1

In a sale or return contract,the risk of loss passes to the buyer when the buyer takes possession of the goods.

Accepted Answer

A) True 
 B)False

Question 2

Do merchant-sellers bear the same risk of loss under carrier cases and noncarrier cases?

Accepted Answer

A)  Yes, in both cases the merchant bears the risk of loss. 
B)  Yes, in both cases the merchant does not bear the risk of loss. 
C)  No, in carrier cases the merchant always bears the risk of loss, but in noncarrier cases the merchant does bear the risk of loss. 
D)  No, in carrier cases the merchant may not bear the risk of loss, but in noncarrier cases the merchant will always bear the risk of loss. 
E)  No, merchant-sellers do not bear the same risk of loss under carrier and noncarrier cases but it depends on whether the buyer is a merchant too. 
A)  Yes, in both cases the merchant bears the risk of loss. 
B)  Yes, in both cases the merchant does not bear the risk of loss. 
C)  No, in carrier cases the merchant always bears the risk of loss, but in noncarrier cases the merchant does bear the risk of loss. 
D)  No, in carrier cases the merchant may not bear the risk of loss, but in noncarrier cases the merchant will always bear the risk of loss. 
E)  No, merchant-sellers do not bear the same risk of loss under carrier and noncarrier cases but it depends on whether the buyer is a merchant too.

Question 3

A title is voidable if the seller has stolen the goods.

Accepted Answer

A) True 
 B)False

Question 4

Why should the rule as to risk of loss be differ between merchant-sellers and nonmerchant-sellers in noncarrier cases in which the sales contract stipulates that the buyer is to pick up the goods?

Accepted Answer

Merchants should be expected to be famil

Question 5

Under the common law,the risk of loss is always on the seller.

Accepted Answer

A) True 
 B)False

Question 6

Why can creditors reach the property of buyer that the buyer has under a sale or return contract or consignment,but not property under a sale on approval contract or lease? Is this difference rational?

Accepted Answer

Creditors can reach the property of a bu

Question 7

If goods are nonconforming,the risk of loss remains on the seller until (1)the defect or nonconformity is cured or (2)the buyer accepts the nonconforming goods.

Accepted Answer

A) True 
 B)False

Question 8

Under the entrustment rule,a seller has no title to the goods.

Accepted Answer

A) True 
 B)False

Question 9

Under Article 2 of the UCC,in which of the following sales contracts,does the risk of loss shift to the buyer upon the buyer taking possession of the goods?

Accepted Answer

A)  sale on approval 
B)  sale or return 
C)  consignment and "sale or return" 
D)  consignment, "sale or return" and "sale on approval" 
E)  "sale or return" and "sale on approval" 
A)  sale on approval 
B)  sale or return 
C)  consignment and "sale or return" 
D)  consignment, "sale or return" and "sale on approval" 
E)  "sale or return" and "sale on approval"

Question 10

Under a sale or return contract,the seller is responsible for the destruction of goods in the buyer's possession.

Accepted Answer

A) True 
 B)False

Question 11

Improper delivery of goods does not effect who bears the risk of loss in a lease contract.

Accepted Answer

A) True 
 B)False

Question 12

Mike owns a mirror shop.Abby is building a ballet studio and needs 50 mirrors.On April 1,Abby contracts with Mike to buy 50 mirrors.The mirrors are located at Mike's shop and the contract states that Abby is free to pick-up the mirrors at anytime.Abby pays for the mirrors on April 15 and picks-up the mirrors on May 1.When does the title pass from Mike to Abby?

Accepted Answer

A)  April 1 
B)  April 15 
C)  May 1 
D)  The title does not pass from Mike to Abby. 
E)  The title passes when Mike identifies the mirrors for Abby. 
A)  April 1 
B)  April 15 
C)  May 1 
D)  The title does not pass from Mike to Abby. 
E)  The title passes when Mike identifies the mirrors for Abby.

Question 13

The identification of goods means distinguishing the goods named in the contract from the seller's or lessor's other goods.

Accepted Answer

A) True 
 B)False

Question 14

In a consignment,the risk of loss remains with the consignor.

Accepted Answer

A) True 
 B)False

Question 15

When does the risk of loss pass to a bailee?

Accepted Answer

A)  When the buyer refuses delivery of the goods. 
B)  When the seller delivers a document of title to the buyer, but before the buyer takes possession of the goods. 
C)  When the contract is made between the buyer and seller, but before the buyer takes possession of the goods. 
D)  If the bailee refuses to acknowledge the buyer's right to the possession of the goods. 
E)  The risk of loss never passes to the bailee. 
A)  When the buyer refuses delivery of the goods. 
B)  When the seller delivers a document of title to the buyer, but before the buyer takes possession of the goods. 
C)  When the contract is made between the buyer and seller, but before the buyer takes possession of the goods. 
D)  If the bailee refuses to acknowledge the buyer's right to the possession of the goods. 
E)  The risk of loss never passes to the bailee.

Question 16

Lessees obtain title to the goods they lease.

Accepted Answer

A) True 
 B)False

Question 17

Goods being shipped by boat are sent F.A.S.

Accepted Answer

A) True 
 B)False

Question 18

Under a destination contract,the title passes to the buyer at the time and place of shipment.

Accepted Answer

A) True 
 B)False

Question 19

"F.O.B.point of shipment" requires the seller to arrange to ship the goods and put the goods in the carrier's possession.

Accepted Answer

A) True 
 B)False

Question 20

Under which of the following shipping terms the shipper bear the risk of loss during transport,but is not under a duty to deliver replacement goods?

Accepted Answer

A)  No-arrival, no-sale 
B)  Ex-ship 
C)  F.O.B. point of shipment 
D)  F.O.B. place of destination 
E)  F.A.S. 
A)  No-arrival, no-sale 
B)  Ex-ship 
C)  F.O.B. point of shipment 
D)  F.O.B. place of destination 
E)  F.A.S.

Exam 17: Performance of Sales, Leases and E-Contracts

In a sale or return contract,the risk of loss passes to the buyer when the buyer takes possession of the goods.

Do merchant-sellers bear the same risk of loss under carrier cases and noncarrier cases?

A title is voidable if the seller has stolen the goods.

Why should the rule as to risk of loss be differ between merchant-sellers and nonmerchant-sellers in noncarrier cases in which the sales contract stipulates that the buyer is to pick up the goods?

Under the common law,the risk of loss is always on the seller.

Why can creditors reach the property of buyer that the buyer has under a sale or return contract or consignment,but not property under a sale on approval contract or lease? Is this difference rational?

If goods are nonconforming,the risk of loss remains on the seller until (1)the defect or nonconformity is cured or (2)the buyer accepts the nonconforming goods.

Under the entrustment rule,a seller has no title to the goods.

Under Article 2 of the UCC,in which of the following sales contracts,does the risk of loss shift to the buyer upon the buyer taking possession of the goods?

Under a sale or return contract,the seller is responsible for the destruction of goods in the buyer's possession.

Improper delivery of goods does not effect who bears the risk of loss in a lease contract.

The identification of goods means distinguishing the goods named in the contract from the seller's or lessor's other goods.

In a consignment,the risk of loss remains with the consignor.

When does the risk of loss pass to a bailee?

Lessees obtain title to the goods they lease.

Goods being shipped by boat are sent F.A.S.

Under a destination contract,the title passes to the buyer at the time and place of shipment.

"F.O.B.point of shipment" requires the seller to arrange to ship the goods and put the goods in the carrier's possession.

Under which of the following shipping terms the shipper bear the risk of loss during transport,but is not under a duty to deliver replacement goods?

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