Question 1

If no carrier is involved,the goods are sold without a document of title,and the goods are identified at the time of contracting,when does title pass?

Accepted Answer

A)  when the buyer pays for them 
B)  at the time of contracting 
C)  when the warranty period expires 
D)  when the buyer picks them up 
A)  when the buyer pays for them 
B)  at the time of contracting 
C)  when the warranty period expires 
D)  when the buyer picks them up B

Question 2

If a contract calls for the goods to be shipped "F.A.S.the Peerless" it means that:

Accepted Answer

A)  The seller must place the goods on the Peerless and will bear the risk of loss until the goods reach their destination. 
B)  The seller must place the goods alongside the Peerless and will bear the risk of loss until the goods are loaded onto the ship. 
C)  The seller must place the goods alongside the Peerless and the risk of loss will shift when this is done. 
D)  The seller must notify the operator of the Peerless as to the location of the goods,and the risk of loss will shift when they are picked up. 
E)  The seller must notify the buyer so that the buyer can make arrangements to get the goods to the Peerless and the risk of loss will shift when the notification has been made. 
A)  The seller must place the goods on the Peerless and will bear the risk of loss until the goods reach their destination. 
B)  The seller must place the goods alongside the Peerless and will bear the risk of loss until the goods are loaded onto the ship. 
C)  The seller must place the goods alongside the Peerless and the risk of loss will shift when this is done. 
D)  The seller must notify the operator of the Peerless as to the location of the goods,and the risk of loss will shift when they are picked up. 
E)  The seller must notify the buyer so that the buyer can make arrangements to get the goods to the Peerless and the risk of loss will shift when the notification has been made. C

Question 3

Thief steals a truckload of appliances from the back of an electronics store.He delivers the property to another store and accepts payment.Representatives from the original electronic store show up and demand that the products be removed from the shelves and returned.What happens?

Accepted Answer

A)  The second store may keep the goods because they are innocent purchasers. 
B)  The original owners may take the goods,but must pay the second store for them. 
C)  The original owners may take the goods,and the second store is entitled to no recourse. 
D)  The original owners may take the goods,and the second store is entitled to recourse against Thief only. 
A)  The second store may keep the goods because they are innocent purchasers. 
B)  The original owners may take the goods,but must pay the second store for them. 
C)  The original owners may take the goods,and the second store is entitled to no recourse. 
D)  The original owners may take the goods,and the second store is entitled to recourse against Thief only. D

Question 4

Which of the following best describes the significance of risk of loss in a carrier case?

Accepted Answer

A)  It determines who will bear the loss for any problems that arise under the contract. 
B)  It determines with certainty which party will pay if the goods are lost or damaged in transit. 
C)  It determines whether the buyer or seller will pay if the goods are lost or damaged in transit,and other possible sources of recovery,such as insurance,do not cover the loss. 
D)  It determines the terms of payment under the contract. 
A)  It determines who will bear the loss for any problems that arise under the contract. 
B)  It determines with certainty which party will pay if the goods are lost or damaged in transit. 
C)  It determines whether the buyer or seller will pay if the goods are lost or damaged in transit,and other possible sources of recovery,such as insurance,do not cover the loss. 
D)  It determines the terms of payment under the contract.

Question 5

Cybermakers has contracted with a computer chip manufacturer to buy a quantity of computer chips for delivery the following month.These computer chips are in the seller's warehouse,and the contract's shipping terms are F.O.B shipping point.At this point,prior to the chips being shipped,who has an insurable interest in the computer chips?

Accepted Answer

A)  the buyer only 
B)  the seller only 
C)  both the buyer and seller 
D)  neither the buyer nor seller 
A)  the buyer only 
B)  the seller only 
C)  both the buyer and seller 
D)  neither the buyer nor seller

Question 6

How does a "no-arrival,no-sale" contract differ from an F.O.B.destination contract?

Accepted Answer

A)  If the goods fail to reach their destination,the seller must replace them in an F.O.B. destination contract,but not in a no-arrival,no-sale contract. 
B)  Risk of loss while the goods are in transit is on the seller in an F.O.B. destination contract,but on the buyer in a no-arrival,no-sale contract. 
C)  Implied warranties exist in the F.O.B. destination contract,but not in the no-arrival,no-sale contract. 
D)  Identification will occur in an F.O.B. destination contract,but not in a no-arrival,no-sale contract. 
A)  If the goods fail to reach their destination,the seller must replace them in an F.O.B. destination contract,but not in a no-arrival,no-sale contract. 
B)  Risk of loss while the goods are in transit is on the seller in an F.O.B. destination contract,but on the buyer in a no-arrival,no-sale contract. 
C)  Implied warranties exist in the F.O.B. destination contract,but not in the no-arrival,no-sale contract. 
D)  Identification will occur in an F.O.B. destination contract,but not in a no-arrival,no-sale contract.

Question 7

What would a seller of goods use to assure payment from the sale of goods overseas?

Accepted Answer

A)  bill of lading 
B)  warehouse receipt 
C)  letter of credit 
D)  negotiable draft 
A)  bill of lading 
B)  warehouse receipt 
C)  letter of credit 
D)  negotiable draft

Question 8

In a carrier case,what is most important in determining when risk of loss passes from the seller to the buyer?

Accepted Answer

A)  the contract's shipping terms 
B)  the buyer's insurance policy terms 
C)  the seller's insurance policy terms 
D)  when title passes 
E)  the price of the goods 
A)  the contract's shipping terms 
B)  the buyer's insurance policy terms 
C)  the seller's insurance policy terms 
D)  when title passes 
E)  the price of the goods

Question 9

Identification of goods is significant because:

Accepted Answer

A)  it allows the contract to be a destination contract 
B)  it is the earliest that risk of loss can pass 
C)  it determines when a document of title is needed 
D)  it determines when the implied warranties become effective 
A)  it allows the contract to be a destination contract 
B)  it is the earliest that risk of loss can pass 
C)  it determines when a document of title is needed 
D)  it determines when the implied warranties become effective

Question 10

One who has voidable title can transfer good title to a good faith purchaser for value.

Accepted Answer

A) True 
 B)False

Question 11

A destination contract requires the seller to deliver to either the buyer's place of business or to another destination specified in the sales contract.

Accepted Answer

A) True 
 B)False

Question 12

In a noncarrier case for the sale of goods,which of the following is most important in determining when risk of loss passes?

Accepted Answer

A)  whether the seller is a merchant 
B)  whether any warranties have been disclaimed 
C)  whether the buyer is a merchant 
D)  when title passes 
A)  whether the seller is a merchant 
B)  whether any warranties have been disclaimed 
C)  whether the buyer is a merchant 
D)  when title passes

Question 13

When a buyer may return goods to a seller if the buyer does not resell them within a stated period of time,this is known under the UCC as:

Accepted Answer

A)  a sale or return 
B)  a sale contingent upon no return 
C)  a consignment sale 
D)  a sale on approval 
E)  a preliminary sale 
A)  a sale or return 
B)  a sale contingent upon no return 
C)  a consignment sale 
D)  a sale on approval 
E)  a preliminary sale

Question 14

For goods to be selected from like items in inventory,identification cannot occur until the specific goods for the specific customer are separated or tagged for that customer.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is true about passage of title?

Accepted Answer

A)  It occurs at the time and place goods are shipped in a shipment contract,and upon reaching the buyer's place of business or other specified location in a destination contract. 
B)  It always occurs when the goods leave the hands of the seller. 
C)  It does not occur until the buyer indicates acceptance of the goods. 
D)  It always passes at the same time that risk of loss passes. 
E)  It occurs at the time payment is made by the buyer. 
A)  It occurs at the time and place goods are shipped in a shipment contract,and upon reaching the buyer's place of business or other specified location in a destination contract. 
B)  It always occurs when the goods leave the hands of the seller. 
C)  It does not occur until the buyer indicates acceptance of the goods. 
D)  It always passes at the same time that risk of loss passes. 
E)  It occurs at the time payment is made by the buyer.

Question 16

C.I.F is a pricing term that indicates the seller is responsible for paying the cost of the goods that are the subject of the sale as well as insurance and freight for their delivery.

Accepted Answer

A) True 
 B)False

Question 17

The function of a letter of credit is to substitute the credit of a recognized international bank for that of the buyer.

Accepted Answer

A) True 
 B)False

Question 18

A shipment contract requires the seller to ship the goods to the buyer via a common carrier.

Accepted Answer

A) True 
 B)False

Question 19

A seller's duty in an F.O.B.destination contract with respect to delivering the goods ends upon placing the goods in the hands of the common carrier.

Accepted Answer

A) True 
 B)False

Question 20

A merchant-seller bears the risk of loss between the time of contracting and the time the buyer picks up the goods.

Accepted Answer

A) True 
 B)False

Exam 19: Title to Goods and Risk of Loss

If no carrier is involved,the goods are sold without a document of title,and the goods are identified at the time of contracting,when does title pass?

If a contract calls for the goods to be shipped "F.A.S.the Peerless" it means that:

Thief steals a truckload of appliances from the back of an electronics store.He delivers the property to another store and accepts payment.Representatives from the original electronic store show up and demand that the products be removed from the shelves and returned.What happens?

Which of the following best describes the significance of risk of loss in a carrier case?

How does a "no-arrival,no-sale" contract differ from an F.O.B.destination contract?

What would a seller of goods use to assure payment from the sale of goods overseas?

In a carrier case,what is most important in determining when risk of loss passes from the seller to the buyer?

Identification of goods is significant because:

One who has voidable title can transfer good title to a good faith purchaser for value.

A destination contract requires the seller to deliver to either the buyer's place of business or to another destination specified in the sales contract.

In a noncarrier case for the sale of goods,which of the following is most important in determining when risk of loss passes?

When a buyer may return goods to a seller if the buyer does not resell them within a stated period of time,this is known under the UCC as:

For goods to be selected from like items in inventory,identification cannot occur until the specific goods for the specific customer are separated or tagged for that customer.

Which of the following is true about passage of title?

C.I.F is a pricing term that indicates the seller is responsible for paying the cost of the goods that are the subject of the sale as well as insurance and freight for their delivery.

The function of a letter of credit is to substitute the credit of a recognized international bank for that of the buyer.

A shipment contract requires the seller to ship the goods to the buyer via a common carrier.

A seller's duty in an F.O.B.destination contract with respect to delivering the goods ends upon placing the goods in the hands of the common carrier.

A merchant-seller bears the risk of loss between the time of contracting and the time the buyer picks up the goods.

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