Question 1

In an ordinary lease in which there is no agreement as to who bears the risk of loss,the risk of loss remains with the lessor.

Accepted Answer

A) True 
 B)False

Question 2

In a consignment situation,when are goods subject to the claims of the buyer's creditors?

Accepted Answer

A)  when the seller files a financing statement 
B)  when the seller fails to file a financing statement 
C)  whenever the goods are in the buyer's place of business 
D)  only if there is a written agreement that the consigned goods are subject to the claims of the buyer's creditors 
E)  only if the creditor seeks the consigned goods within 30 days of the time they are placed in the buyer's place of business 
A)  when the seller files a financing statement 
B)  when the seller fails to file a financing statement 
C)  whenever the goods are in the buyer's place of business 
D)  only if there is a written agreement that the consigned goods are subject to the claims of the buyer's creditors 
E)  only if the creditor seeks the consigned goods within 30 days of the time they are placed in the buyer's place of business

Question 3

In a contract for the sale of goods,identification of the goods is significant because it:

Accepted Answer

A)  allows the contract to be a destination contract. 
B)  is the earliest that title can pass. 
C)  determines when a document of title is needed. 
D)  determines when the implied warranties become effective. 
E)  determines whether a party is entitled to specific performance. 
A)  allows the contract to be a destination contract. 
B)  is the earliest that title can pass. 
C)  determines when a document of title is needed. 
D)  determines when the implied warranties become effective. 
E)  determines whether a party is entitled to specific performance.

Question 4

In a consignment,title passes to the consignee when the consignee takes possession of the goods.

Accepted Answer

A) True 
 B)False

Question 5

Frank is a second-hand furniture dealer.Frank goes to yard sales early every Saturday morning in search of items for his store.One Saturday,Frank finds several items that he likes at one sale.One item is a large heavy leather sofa that he cannot take with him because it won't fit into his van.He arranges with the seller to return that evening when he has a truck that the sofa will fit in.Unfortunately,there was a huge sudden downpour in the late afternoon,the seller could not move the sofa inside,and it was ruined.Who bears the risk of loss?

Accepted Answer

Assuming that the seller is no

Question 6

When a seller breaches a contract for the sale of goods by delivering nonconforming goods and the buyer has the right to reject them,the risk of loss:

Accepted Answer

A)  is unaffected by the seller's breach. 
B)  remains on the seller until the nonconformity is cured or the buyer accepts the nonconforming goods. 
C)  remains on the seller indefinitely. 
D)  is transferred to the buyer upon delivery of the nonconforming goods, but is transferred back to the seller if the buyer returns the goods. 
E)  is transferred to the buyer as a matter of law within 24 hours. 
A)  is unaffected by the seller's breach. 
B)  remains on the seller until the nonconformity is cured or the buyer accepts the nonconforming goods. 
C)  remains on the seller indefinitely. 
D)  is transferred to the buyer upon delivery of the nonconforming goods, but is transferred back to the seller if the buyer returns the goods. 
E)  is transferred to the buyer as a matter of law within 24 hours.

Question 7

What is the difference between a sale on approval and a sale or return?

Accepted Answer

A)  There is no difference between a sale on approval and a sale or return because you return the products under both scenarios. 
B)  Under a sale on approval you must return the goods within a reasonable time and under a sale or return you must return the goods within 30 days. 
C)  Under a sale on approval the risk of loss is with the buyer, but under a sale or return the risk of loss is with the seller. 
D)  Under a sale on approval the title is with the buyer, but under a sale or return the title is with the seller. 
E)  Under a sale on approval a buyer cannot resell the goods unless it is consistent with their use, but under a sale or return a buyer may resell goods as and return those that are unsold. 
A)  There is no difference between a sale on approval and a sale or return because you return the products under both scenarios. 
B)  Under a sale on approval you must return the goods within a reasonable time and under a sale or return you must return the goods within 30 days. 
C)  Under a sale on approval the risk of loss is with the buyer, but under a sale or return the risk of loss is with the seller. 
D)  Under a sale on approval the title is with the buyer, but under a sale or return the title is with the seller. 
E)  Under a sale on approval a buyer cannot resell the goods unless it is consistent with their use, but under a sale or return a buyer may resell goods as and return those that are unsold.

Question 8

One way to create a destination contract is to include the term F.A.S.

Accepted Answer

A) True 
 B)False

Question 9

In an ordinary lease,when does the risk of loss pass from the lessor to lessee,if the lessor is a merchant?

Accepted Answer

A)  when the parties sign the lease contract 
B)  when the lessee makes the first lease payment 
C)  when the lessor receives the first lease payment 
D)  when the lessee receives the goods 
E)  when the lessor ships the goods 
A)  when the parties sign the lease contract 
B)  when the lessee makes the first lease payment 
C)  when the lessor receives the first lease payment 
D)  when the lessee receives the goods 
E)  when the lessor ships the goods

Question 10

Unborn young animals (such as unborn cattle)are identified when the young are conceived.

Accepted Answer

A) True 
 B)False

Question 11

What is a title?

Accepted Answer

A)  the name of the goods being sold 
B)  legal, tangible evidence of ownership of the goods 
C)  the contract in which goods pass from seller to buyer 
D)  a record of the sale of goods 
E)  a receipt kept by the buyer, to document the terms of a purchase of goods 
A)  the name of the goods being sold 
B)  legal, tangible evidence of ownership of the goods 
C)  the contract in which goods pass from seller to buyer 
D)  a record of the sale of goods 
E)  a receipt kept by the buyer, to document the terms of a purchase of goods

Question 12

In a no-arrival,no-sale contract the seller has an obligation to replace goods which do not arrive at the appoint destination.

Accepted Answer

A) True 
 B)False

Question 13

Under a sale on approval which of the following is not considered acceptance,sufficient to create a sale?

Accepted Answer

A)  stating, "these look good to me, i'll keep them" 
B)  taking delivery of the goods 
C)  failure to notify the seller of rejection of the goods within the agreed upon time frame 
D)  using the goods inconsistently with the purpose of the trial 
E)  buyer paying for the goods to use them for a trial period. 
A)  stating, "these look good to me, i'll keep them" 
B)  taking delivery of the goods 
C)  failure to notify the seller of rejection of the goods within the agreed upon time frame 
D)  using the goods inconsistently with the purpose of the trial 
E)  buyer paying for the goods to use them for a trial period.

Question 14

Susan orders a great computer from an out-of-state company.The terms of the contract provide F.O.B.place of destination.The seller ships the computer to Susan.Unfortunately,it never arrives.Between Susan and the seller,who is responsible for loss?

Accepted Answer

The seller is responsible for the loss b

Question 15

Fred has 100 tons of stone in a warehouse.Barney agrees to purchase the stone from Fred.The contract states that Barney will pick-up the stone directly from the warehouse.Fred delivers a warehouse receipt to Barney for the stone.Before Barney is able to pick-up the stone,a tornado sweeps through and destroys the stone.Who has the risk of loss?

Accepted Answer

A)  Fred has the risk of loss because Barney did not pick-up the stone yet. 
B)  The warehouse has the risk of loss because Barney did not pick-up the stone yet. 
C)  Barney has the risk loss because the risk of loss was transferred when he received the warehouse receipt. 
D)  Fred, the warehouse and Barney are equally responsible for the risk of loss. 
E)  Fred and the warehouse are equally responsible for the risk of loss. 
A)  Fred has the risk of loss because Barney did not pick-up the stone yet. 
B)  The warehouse has the risk of loss because Barney did not pick-up the stone yet. 
C)  Barney has the risk loss because the risk of loss was transferred when he received the warehouse receipt. 
D)  Fred, the warehouse and Barney are equally responsible for the risk of loss. 
E)  Fred and the warehouse are equally responsible for the risk of loss.

Question 16

What does "the risk of loss" mean?

Accepted Answer

A)  It is the risk that a party may not pay for goods delivered. 
B)  It is the risk that a contract may be unprofitable for a business. 
C)  It is the risk that goods delivered may be nonconforming or have material defects. 
D)  It is the risk that goods in transit may be lost or destroyed. 
E)  It is the risk that a third-party may interfere with the performance of a contract for the delivery of goods. 
A)  It is the risk that a party may not pay for goods delivered. 
B)  It is the risk that a contract may be unprofitable for a business. 
C)  It is the risk that goods delivered may be nonconforming or have material defects. 
D)  It is the risk that goods in transit may be lost or destroyed. 
E)  It is the risk that a third-party may interfere with the performance of a contract for the delivery of goods.

Question 17

A tender of delivery occurs when the seller holds the goods available for the buyer to take delivery and notifies the buyer the goods are available for delivery.

Accepted Answer

A) True 
 B)False

Question 18

Which of the follow is an element of a consignment?

Accepted Answer

A)  The consignee only remits a small fee to the consignor when goods are sold. 
B)  The consignor retains the risk of loss and title. 
C)  A consignee's creditors may have a claim to consigned goods under certain circumstances. 
D)  The consignor retains the risk of loss, but passes title to the consignee. 
E)  The consignor keeps title, but passes the risk of loss to the consignee. 
A)  The consignee only remits a small fee to the consignor when goods are sold. 
B)  The consignor retains the risk of loss and title. 
C)  A consignee's creditors may have a claim to consigned goods under certain circumstances. 
D)  The consignor retains the risk of loss, but passes title to the consignee. 
E)  The consignor keeps title, but passes the risk of loss to the consignee.

Question 19

Which of the following is true regarding a shipment contract?

Accepted Answer

A)  It requires the seller to deliver conforming goods to a specific destination. 
B)  It requires the seller to ship goods conforming to the contract to a buyer via a carrier. 
C)  Such contracts require the seller to bear the risk of loss to the goods during their transportation. 
D)  The risk of loss does not pass until the goods are tendered to the buyer at the specified destination. 
E)  It requires the seller to deliver conforming goods to the buyer by use of the seller's own trucks. 
A)  It requires the seller to deliver conforming goods to a specific destination. 
B)  It requires the seller to ship goods conforming to the contract to a buyer via a carrier. 
C)  Such contracts require the seller to bear the risk of loss to the goods during their transportation. 
D)  The risk of loss does not pass until the goods are tendered to the buyer at the specified destination. 
E)  It requires the seller to deliver conforming goods to the buyer by use of the seller's own trucks.

Question 20

Frank is a jeweler who both sells and repairs jewelry.An elderly woman brought in several pieces of jewelry to be repaired and left them with Frank.Frank called the woman with a question about one of the pieces of jewelry.In that conversation they agreed that Frank would go to the woman's home to examine and possibly purchase some of her jewelry.While at her home,Frank stole several pieces of her jewelry.The following week Frank's employees sold all of the jewelry that she had left at the store and all that Frank had stolen.Can the woman get her jewelry back from the persons who purchased it?

Accepted Answer

The entrustment rule would prevent her f

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

In an ordinary lease in which there is no agreement as to who bears the risk of loss,the risk of loss remains with the lessor.

In a consignment situation,when are goods subject to the claims of the buyer's creditors?

In a contract for the sale of goods,identification of the goods is significant because it:

In a consignment,title passes to the consignee when the consignee takes possession of the goods.

When a seller breaches a contract for the sale of goods by delivering nonconforming goods and the buyer has the right to reject them,the risk of loss:

What is the difference between a sale on approval and a sale or return?

One way to create a destination contract is to include the term F.A.S.

In an ordinary lease,when does the risk of loss pass from the lessor to lessee,if the lessor is a merchant?

Unborn young animals (such as unborn cattle)are identified when the young are conceived.

What is a title?

In a no-arrival,no-sale contract the seller has an obligation to replace goods which do not arrive at the appoint destination.

Under a sale on approval which of the following is not considered acceptance,sufficient to create a sale?

Susan orders a great computer from an out-of-state company.The terms of the contract provide F.O.B.place of destination.The seller ships the computer to Susan.Unfortunately,it never arrives.Between Susan and the seller,who is responsible for loss?

What does "the risk of loss" mean?

A tender of delivery occurs when the seller holds the goods available for the buyer to take delivery and notifies the buyer the goods are available for delivery.

Which of the follow is an element of a consignment?

Which of the following is true regarding a shipment contract?

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