Exam 23: Transfer of Title and Risk of Loss

Jerry bought a stereo from SX Company "on approval." The risk of loss passed to Jerry when he took possession of the stereo.

The UCC uses a transactional approach to risk of loss questions.

Given a transaction involving two innocent persons, the true owner and the good faith purchaser for value, the law will not disturb the legal title but will rule in favor of the one who has it.

A basic tenet of the law, as codified in the UCC, is that a purchaser of goods obtains such title as his transferor had or had the power to transfer.

Property law protects existing ownership of goods. A principal belief underlying this policy is:

If goods are sold and delivered to buyer with an option to return them, the risk is on the buyer until they are returned.

When delivery is to be made by physically moving the goods, title passes at the time and place at which the seller completes performance with reference to delivery of the goods.

The bulk sales portion of the Code applies only to transfers in the ordinary course of business.

Kollenberg's sold a substantial part of its equipment to Castillo Brothers. Nothing else was involved in the sale. The sale of the equipment is a bulk transfer under the Code.

Brenda agrees to lease a new car from Hyland Motors. Which of the following statements is true?

In a sale on approval:

Inga runs a Swedish health spa in Connecticut. She orders 100 loofah sponges from a company in California. They are sent "F.O.B. Hartford, Connecticut," but they never arrive at Inga's. What consequence?

Steve sold his canoe to his neighbor Rhonda for $300. Steve then tells Rhonda, "I'll put the canoe in my driveway and you can pick it up any time tomorrow." Steve retains risk of loss until Rhonda picks up the canoe.

A seller has the right to transfer title:

Ralph buys a bicycle for his son. The transaction is considered a sale of goods under the UCC.

In a lease of personal property, title does not pass.

Answer the following: a. What is a bulk transfer, and under what part of the Code is it governed? b. Identify the central purpose of bulk sales law. _{Section 6­102 of Article 6 of the UCC defines a bulk transfer as "any transfer in}

Alex tells Mona that he thinks her ring is very valuable and that he would like to take it to be appraised. She gives him the ring, and he quickly sells it to unsuspecting Hanna's Antique Jewelry Shop for $2,000. A week later, Mona discovers her ring on sale at Hanna's and uncovers the story. Can Mona get the ring back?

Under the UCC, identifying goods to which a contract refers gives the buyer a special property interest which permits the holder to:

If the goods that are the subject of a sale are in the possession of a bailee and are to be delivered without being moved, when does the risk of loss pass to the buyer?