Exam 23: Transfer of Title and Risk of Loss

If the owner of goods entrusts them to a merchant, the merchant can transfer good title to the goods to a buyer in the ordinary course of business even if the original owner does not want to sell the goods.

Carl ordered 1,000 sq.ft.of green carpet from RS Company.In error, RS Company shipped 1,000 sq.ft.of yellow carpet.In this case, the risk of loss remains with the seller until Carl accepts the yellow carpet or RS Company remedies the defect.

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.

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?

A(n) is a delivery of possession of personal property to an agent for sale by the agent.

Z, a seller in Miami, enters into a contract which states that goods are to be delivered to X, a buyer, in New York. Title is to remain with Z until delivery to X.This is:

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

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.

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.

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?

Mario, a minor, sells his bicycle to Jimmy for $150.A week later, Kelly, who does not know Mario, buys the bike from Jimmy for $200.Mario, upon learning about Jimmy's sale of the bike, disaffirms his contract with Jimmy.Kelly does not have valid title and must return the bike to Mario.

Title to existing, identified goods can pass whenever the parties agree it will pass.

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

Security interests in goods are governed by the common law rather than the UCC.

In a sale on approval:

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.

Howard stole a computer and then sold it to his friend Ivan for $100.Ivan has:

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?

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

A good faith purchaser acts honestly, gives value, and takes the goods without notice or knowledge of any defect in the title.