Question 1

A consignment deal would be an example of a(n)________.

Accepted Answer

A)  unconditional contract 
B)  sale or return contract 
C)  sale or approval contract 
D)  unequivocal contract 
A)  unconditional contract 
B)  sale or return contract 
C)  sale or approval contract 
D)  unequivocal contract B

Question 2

How are the shipping terms C.I.F.and F.O.B.point of shipment similar to each other?

Accepted Answer

A)  Both require the seller to bear the expense and risk of loss until the goods are tendered to the buyer at the place of destination. 
B)  Both require the seller to bear the expenses and risk of loss when handing the shipment to a carrier. 
C)  Both require the seller to deliver and tender the goods alongside the named vessel provided by the buyer. 
D)  Both require the seller to bear the expense and risk of loss until the goods are unloaded from the ship at its port of destination. 
A)  Both require the seller to bear the expense and risk of loss until the goods are tendered to the buyer at the place of destination. 
B)  Both require the seller to bear the expenses and risk of loss when handing the shipment to a carrier. 
C)  Both require the seller to deliver and tender the goods alongside the named vessel provided by the buyer. 
D)  Both require the seller to bear the expense and risk of loss until the goods are unloaded from the ship at its port of destination. B

Question 3

Which of the following would contain the term "no-arrival,no-sale" in their contract?

Accepted Answer

A)  shipment contract 
B)  destination contract 
C)  lease contract 
D)  consignment contract 
A)  shipment contract 
B)  destination contract 
C)  lease contract 
D)  consignment contract B

Question 4

Discuss how the risks of loss in lease contracts are mandated under the Uniform Commercial Code (UCC).

Accepted Answer

UCC provides the following risk of loss

Question 5

When are future goods,other than crops and unborn young,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 
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

Question 6

Sam owns a record store that buys and sells old vinyl records.Sam sells some records to Tammy through an online shop.Sam is considered a merchant.Sam ships the records to Tammy.When Tammy receives the records they are broken.In this case,________ bears the risk of loss.

Accepted Answer

A)  Sam 
B)  Tammy 
C)  the carrier 
D)  the online shop 
A)  Sam 
B)  Tammy 
C)  the carrier 
D)  the online shop

Question 7

In a lease transaction,the title to the goods ________.

Accepted Answer

A)  changes when the goods are identified 
B)  changes when the goods are delivered 
C)  does not remain with the lessor 
D)  does not pass to the lessee 
A)  changes when the goods are identified 
B)  changes when the goods are delivered 
C)  does not remain with the lessor 
D)  does not pass to the lessee

Question 8

Kenneth purchased a car from his local dealership,Quartent Cars.However,since the car was not available in the color that Kenneth favored,the sales contract stipulated that Kenneth could immediately pick up the car from a nearby warehouse it was housed in.The warehouse was owned by Mr.Henderson.Kenneth received the document of title for the car upon payment and presented it to Mr.Henderson around a week later.But Mr.Henderson informed Kenneth that the car was damaged during a fire in the warehouse.What role does Mr.Henderson fulfill in the contract?

Accepted Answer

A)  the seller 
B)  the consignee 
C)  the bailee 
D)  the supplier 
A)  the seller 
B)  the consignee 
C)  the bailee 
D)  the supplier

Question 9

If a buyer breaches a sales contract before the risk of loss would normally pass to him,the risk of loss will remain with the seller.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is true of a destination contract containing a "no-arrival,no-sale" clause?

Accepted Answer

A)  The seller is required to bear the expense and risk during transportation. 
B)  The seller is required to replace any goods lost in transit. 
C)  The buyer has to pay for destroyed goods. 
D)  The risk of loss passes once the shipping has been arranged. 
A)  The seller is required to bear the expense and risk during transportation. 
B)  The seller is required to replace any goods lost in transit. 
C)  The buyer has to pay for destroyed goods. 
D)  The risk of loss passes once the shipping has been arranged.

Question 11

Which of the following is true about a sale or return contract?

Accepted Answer

A)  A buyer cannot resell the goods received under the contract. 
B)  A seller need not accept the goods returned by a buyer. 
C)  A sale is considered final if the buyer fails to return the goods within a reasonable time. 
D)  A sale is made on an approval by trial basis. 
A)  A buyer cannot resell the goods received under the contract. 
B)  A seller need not accept the goods returned by a buyer. 
C)  A sale is considered final if the buyer fails to return the goods within a reasonable time. 
D)  A sale is made on an approval by trial basis.

Question 12

The term ________ refers to the legal,tangible evidence of ownership of goods.

Accepted Answer

A)  tenure 
B)  title 
C)  possession 
D)  pledge 
A)  tenure 
B)  title 
C)  possession 
D)  pledge

Question 13

Robert steals a truckload of plasma televisions that belong to Karson Electronics Store in an armed robbery.He then resells it to Stu-Mart,who is unaware of the stolen nature of the goods.Karson Electronics Store then traces the plasma televisions to Stu-Mart.Robert is also arrested for the theft.Which of the following is true for Karson Electronics' legal course for reclaiming the televisions or damages?

Accepted Answer

A)  Stu-Mart is a good-faith purchaser here and as such does not have to hand over the televisions to Karson. 
B)  Stu-mart must hand over the televisions to Karson as their title to the goods is void. 
C)  Karson's only recourse is against Robert to claim damages. 
D)  Karson's cannot reclaim the goods, but can sue Stu-Mart for negligence and damages. 
A)  Stu-Mart is a good-faith purchaser here and as such does not have to hand over the televisions to Karson. 
B)  Stu-mart must hand over the televisions to Karson as their title to the goods is void. 
C)  Karson's only recourse is against Robert to claim damages. 
D)  Karson's cannot reclaim the goods, but can sue Stu-Mart for negligence and damages.

Question 14

In a sale on approval,the goods are subject to the claims of the buyer's creditors before the buyer accepts them.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is a difference between a sale or return contract and a sale on approval contract?

Accepted Answer

A)  For sale or return, the risk of loss is borne by the buyer; while in a sale on approval, it is borne by the seller. 
B)  For sale or return, the goods are sold to the buyer; while in a sale on approval, the buyer is allowed a time period to test the goods. 
C)  For sale or return, failure to notify rejection is not acceptance; while in a sale on approval, failure to notify rejection is acceptance. 
D)  For sale or return, goods sold can be returned; while in a sale on approval, goods sold can never be returned. 
A)  For sale or return, the risk of loss is borne by the buyer; while in a sale on approval, it is borne by the seller. 
B)  For sale or return, the goods are sold to the buyer; while in a sale on approval, the buyer is allowed a time period to test the goods. 
C)  For sale or return, failure to notify rejection is not acceptance; while in a sale on approval, failure to notify rejection is acceptance. 
D)  For sale or return, goods sold can be returned; while in a sale on approval, goods sold can never be returned.

Question 16

Which of the following contracts is an example of future goods?

Accepted Answer

A)  an option contract for a lessor's real estate property 
B)  a contract to buy growing crops 
C)  a preordered video game 
D)  a contract to sell a newborn animal 
A)  an option contract for a lessor's real estate property 
B)  a contract to buy growing crops 
C)  a preordered video game 
D)  a contract to sell a newborn animal

Question 17

Explain with an example the circumstances under which a seller is in breach of a sales contract.

Accepted Answer

A seller breaches a sales contract if he

Question 18

Under the Uniform Commercial Code,the rights and obligations of the buyer,the seller,and the third parties are determined based on who held technical title to the goods.

Accepted Answer

A) True 
 B)False

Question 19

If an owner entrusts the possession of his or her goods to a merchant who deals in goods of that kind,the merchant does not have the power to transfer all rights (including title)in the goods to a buyer in the ordinary course of business.

Accepted Answer

A) True 
 B)False

Question 20

If the movement of goods is not required,and the seller is a nonmerchant,the risk of loss ________.

Accepted Answer

A)  passes to the buyer upon "tender of delivery" of the goods 
B)  remains with the seller after acceptance 
C)  is passed on to a merchant buyer before the goods are shipped 
D)  is to be borne by the carrier responsible for the delivery of the goods 
A)  passes to the buyer upon "tender of delivery" of the goods 
B)  remains with the seller after acceptance 
C)  is passed on to a merchant buyer before the goods are shipped 
D)  is to be borne by the carrier responsible for the delivery of the goods

Exam 17: Title to Goods and Risk of Loss

A consignment deal would be an example of a(n)________.

How are the shipping terms C.I.F.and F.O.B.point of shipment similar to each other?

Which of the following would contain the term "no-arrival,no-sale" in their contract?

Discuss how the risks of loss in lease contracts are mandated under the Uniform Commercial Code (UCC).

When are future goods,other than crops and unborn young,identifiable?

Sam owns a record store that buys and sells old vinyl records.Sam sells some records to Tammy through an online shop.Sam is considered a merchant.Sam ships the records to Tammy.When Tammy receives the records they are broken.In this case,________ bears the risk of loss.

In a lease transaction,the title to the goods ________.

If a buyer breaches a sales contract before the risk of loss would normally pass to him,the risk of loss will remain with the seller.

Which of the following is true of a destination contract containing a "no-arrival,no-sale" clause?

Which of the following is true about a sale or return contract?

The term ________ refers to the legal,tangible evidence of ownership of goods.

In a sale on approval,the goods are subject to the claims of the buyer's creditors before the buyer accepts them.

Which of the following is a difference between a sale or return contract and a sale on approval contract?

Which of the following contracts is an example of future goods?

Explain with an example the circumstances under which a seller is in breach of a sales contract.

Under the Uniform Commercial Code,the rights and obligations of the buyer,the seller,and the third parties are determined based on who held technical title to the goods.

If an owner entrusts the possession of his or her goods to a merchant who deals in goods of that kind,the merchant does not have the power to transfer all rights (including title)in the goods to a buyer in the ordinary course of business.

If the movement of goods is not required,and the seller is a nonmerchant,the risk of loss ________.

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