Question 1

Under Article 2 of the UCC,what happens to the risk of loss when a buyer breaches a contract by refusing to take delivery of conforming goods?

Accepted Answer

A)  The buyer bears the risk of loss, but only for a commercially reasonable time. 
B)  The buyer bears the risk of loss permanently. 
C)  It shifts back to the seller if it had already shifted to the buyer. 
D)  The buyer bears the risk of loss, but only in the case of an unjustified breach. 
E)  The risk is on the buyer but only for a maximum by law of 7 days. 
A)  The buyer bears the risk of loss, but only for a commercially reasonable time. 
B)  The buyer bears the risk of loss permanently. 
C)  It shifts back to the seller if it had already shifted to the buyer. 
D)  The buyer bears the risk of loss, but only in the case of an unjustified breach. 
E)  The risk is on the buyer but only for a maximum by law of 7 days.

Question 2

What is the common law rule regarding risk of loss? How did the UCC change the common law rule? Which do you think is easier to implement?

Accepted Answer

The common law rule tied who had the ris

Question 3

A non-merchant seller passes the risk of loss to the buyer when the goods are received.

Accepted Answer

A) True 
 B)False

Question 4

If a buyer breaches a sales contract,the buyer only bears the risk of loss after the breach has occurred and not before.

Accepted Answer

A) True 
 B)False

Question 5

The risk of loss rules are the same,regardless of whether a party has breached the sales contract.

Accepted Answer

A) True 
 B)False

Question 6

If a buyer presents a bill of lading to a bailee and the bailee refuses to deliver the goods,the risk of loss remains with the seller.

Accepted Answer

A) True 
 B)False

Question 7

Sam owns a record store that buys and sells old vinyl records.Sam sells some records to Tammy through eBay.Sam is considered a merchant.Sam ships the records to Tammy.When Tammy receives the records they are smashed into a million pieces.Tammy sues Sam for her money back,who wins?

Accepted Answer

A)  Sam wins because the risk of loss passed to Tammy when he shipped the records. 
B)  Sam wins because as a merchant he is only responsible for shipping conforming goods. 
C)  Tammy wins because Sam retained the risk of loss when he shipped the records. 
D)  Tammy wins because Sam is a merchant and therefore has an increased responsibility to make sure the records arrive in one price. 
E)  Tammy and Sam are equally responsible. 
A)  Sam wins because the risk of loss passed to Tammy when he shipped the records. 
B)  Sam wins because as a merchant he is only responsible for shipping conforming goods. 
C)  Tammy wins because Sam retained the risk of loss when he shipped the records. 
D)  Tammy wins because Sam is a merchant and therefore has an increased responsibility to make sure the records arrive in one price. 
E)  Tammy and Sam are equally responsible.

Question 8

When are future goods identifiable?

Accepted Answer

A)  when the parties enter into the contract 
B)  when the buyer pays for the goods 
C)  when the seller begins manufacturing the goods 
D)  when the seller ships the goods 
E)  when the buyer accepts delivery of the goods 
A)  when the parties enter into the contract 
B)  when the buyer pays for the goods 
C)  when the seller begins manufacturing the goods 
D)  when the seller ships the goods 
E)  when the buyer accepts delivery of the goods

Question 9

When a buyer of goods has obtained the goods properly from the seller by check but the check is dishonored,what kind of title does the buyer have?

Accepted Answer

A)  voidable 
B)  void 
C)  good 
D)  joint 
E)  common 
A)  voidable 
B)  void 
C)  good 
D)  joint 
E)  common

Question 10

A buyer acquires goods through a sale or return contract.The buyer defaults on a loan owed to its creditors.The goods acquired through the sale and return contract are subject to the creditors claim.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is a conditional sale?

Accepted Answer

A)  entrustment sale 
B)  good faith sale 
C)  a sale by a merchant to a buyer in the ordinary course of business. 
D)  consignment 
E)  bailment 
A)  entrustment sale 
B)  good faith sale 
C)  a sale by a merchant to a buyer in the ordinary course of business. 
D)  consignment 
E)  bailment

Question 12

When there is no agreement to the contrary,sales contracts are presumed to be shipment contracts.

Accepted Answer

A) True 
 B)False

Question 13

Seller who is located in Atlanta,Georgia contracted to sell a shipment of peaches to the 1910 fruit gum company located in Buffalo,New York.The peaches were sold f.o.b.Buffalo.Seller delivered the peaches to the proper carrier in Atlanta and the peaches were destroyed during shipping.Under these facts:

Accepted Answer

A)  This is a trick question; goods can't be shipped f.o.b. Buffalo. 
B)  Buyer bears the risk of loss and is responsible. 
C)  Seller and buyer share the risk of loss. 
D)  Seller bears the risk of loss and is responsible. 
E)  Neither the seller nor the buyer bear risk of loss, the carrier bears the risk of loss. 
A)  This is a trick question; goods can't be shipped f.o.b. Buffalo. 
B)  Buyer bears the risk of loss and is responsible. 
C)  Seller and buyer share the risk of loss. 
D)  Seller bears the risk of loss and is responsible. 
E)  Neither the seller nor the buyer bear risk of loss, the carrier bears the risk of loss.

Question 14

C.I.T.is a pricing term that indicates the cost for which the seller is responsible.

Accepted Answer

A) True 
 B)False

Question 15

When there is no movement of goods,the risk of loss passes to the buyer when the goods are received,if the seller is a merchant.

Accepted Answer

A) True 
 B)False

Question 16

Goods sent "ex-ship The Maine" makes the buyer solely responsible for the expense and risk of loss while the goods are in route.

Accepted Answer

A) True 
 B)False

Question 17

A warehouse receipt is one form of a document of title.

Accepted Answer

A) True 
 B)False

Question 18

The entrustment rule can have harsh results.Why should the owner not be able to get back the property when it was sold by the merchant with no authorization of the owner? Should the rule be changed? What steps can an entrustor take to minimize the risk of losing the property?

Accepted Answer

The rule is designed to encourage commer

Question 19

Title for goods can pass before they are identified to the contract.

Accepted Answer

A) True 
 B)False

Question 20

Generally,when a sales contract has not been breached and it is a destination contract,the seller is required to replace any goods lost in transit.

Accepted Answer

A) True 
 B)False

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

Under Article 2 of the UCC,what happens to the risk of loss when a buyer breaches a contract by refusing to take delivery of conforming goods?

What is the common law rule regarding risk of loss? How did the UCC change the common law rule? Which do you think is easier to implement?

A non-merchant seller passes the risk of loss to the buyer when the goods are received.

If a buyer breaches a sales contract,the buyer only bears the risk of loss after the breach has occurred and not before.

The risk of loss rules are the same,regardless of whether a party has breached the sales contract.

If a buyer presents a bill of lading to a bailee and the bailee refuses to deliver the goods,the risk of loss remains with the seller.

Sam owns a record store that buys and sells old vinyl records.Sam sells some records to Tammy through eBay.Sam is considered a merchant.Sam ships the records to Tammy.When Tammy receives the records they are smashed into a million pieces.Tammy sues Sam for her money back,who wins?

When are future goods identifiable?

When a buyer of goods has obtained the goods properly from the seller by check but the check is dishonored,what kind of title does the buyer have?

A buyer acquires goods through a sale or return contract.The buyer defaults on a loan owed to its creditors.The goods acquired through the sale and return contract are subject to the creditors claim.

Which of the following is a conditional sale?

When there is no agreement to the contrary,sales contracts are presumed to be shipment contracts.

C.I.T.is a pricing term that indicates the cost for which the seller is responsible.

When there is no movement of goods,the risk of loss passes to the buyer when the goods are received,if the seller is a merchant.

Goods sent "ex-ship The Maine" makes the buyer solely responsible for the expense and risk of loss while the goods are in route.

A warehouse receipt is one form of a document of title.

The entrustment rule can have harsh results.Why should the owner not be able to get back the property when it was sold by the merchant with no authorization of the owner? Should the rule be changed? What steps can an entrustor take to minimize the risk of losing the property?

Title for goods can pass before they are identified to the contract.

Generally,when a sales contract has not been breached and it is a destination contract,the seller is required to replace any goods lost in transit.

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