Question 1

If goods are fungible, identification of a share of undivided goods occurs when the parties enter into the contract.

Accepted Answer

A) True 
 B)False

Question 2

Claraine obtained a necklace by criminal fraud punishable as larceny. If she sells the necklace to Sherry, who is a good faith purchaser for value, Sherry obtains valid title.

Accepted Answer

A) True 
 B)False

Question 3

Identification may be made by either the seller or the buyer.

Accepted Answer

A) True 
 B)False

Question 4

The UCC "risk of loss" rules depend on transfer of title.

Accepted Answer

A) True 
 B)False

Question 5

A major purpose of the bulk sales provisions of the Code is to protect the seller's creditors.

Accepted Answer

A) True 
 B)False

Question 6

The seller and buyer of goods agree that identification will be made by the seller when it manufactures and separates those particular goods out for the buyer. Identification will actually occur:

Accepted Answer

A)  at the time and in the manner agreed upon by the parties. 
B)  according to Code Section 2-501, upon the making of the contract of sale. 
C)  when the buyer points out the particular goods it wants; the seller cannot identify goods. 
D)  when the goods are tendered to the carrier for shipment to the buyer. 
A)  at the time and in the manner agreed upon by the parties. 
B)  according to Code Section 2-501, upon the making of the contract of sale. 
C)  when the buyer points out the particular goods it wants; the seller cannot identify goods. 
D)  when the goods are tendered to the carrier for shipment to the buyer.

Question 7

Mark, a college student, agreed to sell his horse to Henry for $1,000. The contract required Mark to take the horse on that same day to Idlewild Stables where Henry was going to board the horse. Henry paid Mark the money, patted the horse and said, "I'm glad you're mine, you beauty," and drove off. Mark then led the horse into the trailer and set off for the two-hour drive to Idlewild. Has there been a sale?

Accepted Answer

A)  No, not until delivery to Idlewild. 
B)  No, not until Henry sees the horse again. 
C)  Yes, since Henry already paid for it. 
D)  Yes, since the contract was made earlier in the day. 
A)  No, not until delivery to Idlewild. 
B)  No, not until Henry sees the horse again. 
C)  Yes, since Henry already paid for it. 
D)  Yes, since the contract was made earlier in the day.

Question 8

Amanda ordered fifty personalized sweatshirts from King Manufacturing Company. After the shirts were specially imprinted, but before they were mailed, Amanda called King Manufacturing to disavow the contract. The next day the sweatshirts were stolen. Who must bear the loss?

Accepted Answer

A)  Amanda must pay the entire purchase price, because she breached the contract. 
B)  King will have to bear the entire loss, because it had not yet mailed the shirts. 
C)  Amanda must bear the entire loss, because the shirts were identified to the contract. 
D)  King must first seek payment from its insurance carrier, and then collect from Amanda for any amount not covered by insurance. 
A)  Amanda must pay the entire purchase price, because she breached the contract. 
B)  King will have to bear the entire loss, because it had not yet mailed the shirts. 
C)  Amanda must bear the entire loss, because the shirts were identified to the contract. 
D)  King must first seek payment from its insurance carrier, and then collect from Amanda for any amount not covered by insurance.

Question 9

Dividing the risk and the shift of allocation of risk are options by agreement of both parties.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is true regarding identification of the goods under Article 2?

Accepted Answer

A)  Only the buyer can identify the goods. 
B)  Identification of existing goods gives the buyer a special property interest. 
C)  Fungible goods are identified when the seller separates the contracted units from the whole. 
D)  All of these are correct. 
A)  Only the buyer can identify the goods. 
B)  Identification of existing goods gives the buyer a special property interest. 
C)  Fungible goods are identified when the seller separates the contracted units from the whole. 
D)  All of these are correct.

Question 11

In the goods are sold and delivered to the buyer with an option to return them to the seller.

Accepted Answer

A)  a bailment 
B)  a sale on approval 
C)  a sale or return 
D)  entrusting to a merchant 
A)  a bailment 
B)  a sale on approval 
C)  a sale or return 
D)  entrusting to a merchant

Question 12

The Code has expanded the rights of good faith purchasers with respect to sales by minors.

Accepted Answer

A) True 
 B)False

Question 13

With regard to UCC Article 6, which of the following is true?

Accepted Answer

A)  The 1988 joint recommendation of the National Conference of Commissioners on Uniform State Laws and the American Law Institute was for states to adopt the revised version of Article 6, which the majority of states have done. 
B)  At least 45 states have repealed Article 6. 
C)  Article 60 is a revision of Article 6. 
D)  All of these. 
A)  The 1988 joint recommendation of the National Conference of Commissioners on Uniform State Laws and the American Law Institute was for states to adopt the revised version of Article 6, which the majority of states have done. 
B)  At least 45 states have repealed Article 6. 
C)  Article 60 is a revision of Article 6. 
D)  All of these.

Question 14

Growingreen, a gourmet fresh food store, orders 100 lbs. of peaches from Western Fruits "on approval." Growingreen has never dealt with Western before this transaction. Since it only sells the highest quality fruits, Growingreen asked for and received these special terms. The peaches arrived on Saturday, but the owners of Growingreen were too busy to open the crates. Sunday they are closed. Monday at 4 p.m., they opened the boxes and inspected the peaches. They did not meet the high standards of Growingreen, so they nailed the crates shut and ordered a truck to return them the next day. They arrived at Western on Thursday, totally spoiled, a week after they were sent. This is the first time Western knew they were not being accepted. Who is responsible for the damages to the peaches?

Accepted Answer

A)  Growingreen, since it did not, within a reasonable time, notify Western of its election to return the peaches 
B)  Growingreen; the risk of loss was on them when the peaches arrived 
C)  Western, since they retained the risk of loss until approval 
D)  Western, because they agreed to take the goods back 
A)  Growingreen, since it did not, within a reasonable time, notify Western of its election to return the peaches 
B)  Growingreen; the risk of loss was on them when the peaches arrived 
C)  Western, since they retained the risk of loss until approval 
D)  Western, because they agreed to take the goods back

Question 15

Under a shipment contract, the seller passes title to the buyer when the goods arrive.

Accepted Answer

A) True 
 B)False

Question 16

Mary orders a dress for $1,000. Mary doesn't inspect the dress on arrival and therefore doesn't discover a flaw in the fabric until the day before she is to wear it to her first board meeting as president of Tri-State Engineering. This is a month after the dress arrived. She calls the designer and sends the dress back, but it is lost in the mail. Mary's insurance would cover $400 of the loss. The designer's insurance would cover $900. Who is liable?

Accepted Answer

A)  Mary will bear the whole loss because she accepted the goods. 
B)  The designer will bear the whole loss because Mary returned the nonconforming goods. 
C)  Mary will owe $100; the designer, $900. 
D)  The risk is Mary's to the extent of $400. 
A)  Mary will bear the whole loss because she accepted the goods. 
B)  The designer will bear the whole loss because Mary returned the nonconforming goods. 
C)  Mary will owe $100; the designer, $900. 
D)  The risk is Mary's to the extent of $400.

Question 17

Which of the following is/are required for a valid tender under the Code? The seller must:

Accepted Answer

A)  put and hold conforming goods at the buyer's disposition. 
B)  give notice to the buyer that the goods are available. 
C)  give notice at a reasonable time and keep the goods available for a reasonable period of time. 
D)  All of these are required. 
A)  put and hold conforming goods at the buyer's disposition. 
B)  give notice to the buyer that the goods are available. 
C)  give notice at a reasonable time and keep the goods available for a reasonable period of time. 
D)  All of these are required.

Question 18

According to the Code, identification takes place:

Accepted Answer

A)  upon the making of a contract if it is for future goods. 
B)  when the seller ships, marks, or otherwise designates the goods as those to which the contract refers if the contract is for goods that are already existing and identified. 
C)  when the crops are planted or start growing if the contract is for crops to be grown within twelve months. 
D)  when the young animals are born if the contract is for offspring of animals to be born within twelve months. 
A)  upon the making of a contract if it is for future goods. 
B)  when the seller ships, marks, or otherwise designates the goods as those to which the contract refers if the contract is for goods that are already existing and identified. 
C)  when the crops are planted or start growing if the contract is for crops to be grown within twelve months. 
D)  when the young animals are born if the contract is for offspring of animals to be born within twelve months.

Question 19

The buyer and seller of goods may not simultaneously hold insurable interests in the goods.

Accepted Answer

A) True 
 B)False

Question 20

The seller has an insurable interest in goods even though he no longer owns them if he continues to retain a security interest in them.

Accepted Answer

A) True 
 B)False

Exam 23: Transfer of Title and Risk of Loss

If goods are fungible, identification of a share of undivided goods occurs when the parties enter into the contract.

Claraine obtained a necklace by criminal fraud punishable as larceny. If she sells the necklace to Sherry, who is a good faith purchaser for value, Sherry obtains valid title.

Identification may be made by either the seller or the buyer.

The UCC "risk of loss" rules depend on transfer of title.

A major purpose of the bulk sales provisions of the Code is to protect the seller's creditors.

The seller and buyer of goods agree that identification will be made by the seller when it manufactures and separates those particular goods out for the buyer. Identification will actually occur:

Amanda ordered fifty personalized sweatshirts from King Manufacturing Company. After the shirts were specially imprinted, but before they were mailed, Amanda called King Manufacturing to disavow the contract. The next day the sweatshirts were stolen. Who must bear the loss?

Dividing the risk and the shift of allocation of risk are options by agreement of both parties.

Which of the following is true regarding identification of the goods under Article 2?

In the goods are sold and delivered to the buyer with an option to return them to the seller.

The Code has expanded the rights of good faith purchasers with respect to sales by minors.

With regard to UCC Article 6, which of the following is true?

Under a shipment contract, the seller passes title to the buyer when the goods arrive.

Which of the following is/are required for a valid tender under the Code? The seller must:

According to the Code, identification takes place:

The buyer and seller of goods may not simultaneously hold insurable interests in the goods.

The seller has an insurable interest in goods even though he no longer owns them if he continues to retain a security interest in them.

Introduction to Law

Business Ethics and the Social Responsibility of Business

Civil Dispute Resolution

Constitutional Law

Administrative Law

Criminal Law

Intentional Torts

Negligence and Strict Liability

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Consideration

Illegal Bargains

Contractual Capacity

Contracts in Writing

Third Parties to Contracts

Performance, Breach, and Discharge

Contract Remedies

Relationship of Principal and Agent

Relationship With Third Parties

Introduction to Sales and Leases

Performance

Products Liability: Warranties and Strict Liability in Tort

Sales Remedies

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits, Collections, and Funds Transfers

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature, Formation, and Powers

Financial Structure

Management Structure

Fundamental Changes

Secured Transactions and Suretyship

Bankruptcy

Protection of Intellectual Property

Antitrust

Consumer Protection

Employment Law

Securities Regulation

Accountants Legal Liability

Environmental Law

International Business Law

Introduction to Property, Property Insurance, Bailments, and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

Trusts and Decedents Estates

the Legal Environment of Business

Contracts

Agency

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Negotiable Instruments

Unincorporated Business Associations

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Debtor and Creditor Relations

Regulation of Business

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