Exam 21: Transfer of Title and Risk of Loss

Duncan Supply has consigned goods to Huffman Hardware. Huffman's creditors may take possession of the consigned goods to satisfy their claims against Huffman.

The Heinrich v. Titus-Will Sales, Inc. case stands for the principle that:

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

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

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?

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

a. Arthur brings his new computer to the Quick Fix Repair Shop to be fixed. Two days later, a buyer comes into the shop, and Quick Fix inadvertently sells Arthur's computer. Arthur now wants his computer back. Can Arthur get his computer back? Explain. b. Why do you think the Code follows this rule in situations such as the one above? Explain.

The UCC and the common law are essentially the same in regard to their treatment of risk of loss or damage to identified goods.

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

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

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?

Growingreen, a gourmet fresh food store that sells only the highest quality fruits, orders 100 lbs. of peaches from Western Fruits "on approval." Growingreen has never dealt with Western before this transaction. 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?

Future goods cannot be the subject of a present sale.

Alex sees Mona's ring, and he thinks it is very valuable. He uses physical duress to cause her to give him the ring, and he quickly sells it to unsuspecting Hanna's Antique Jewelry Shop for $5,000. A month later, Mona discovers her ring on sale at Hanna's. Can Mona get the ring back?

When goods have been damaged without the fault of either the seller or buyer, if the risk of loss is placed on the seller, the seller has no right to recover the purchase price from the buyer and has no right to the return of the damaged goods.

Security interests, defined by the Code as interests in personal property or fixtures that ensure payment or performance of obligations, are governed by Article 6 of the UCC.

Which of the following is necessary to be considered a good faith purchaser?

In a lease, the lessee obtains the right to possess and use the goods for a period of time in return for consideration, but title does not pass.

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

When delivery is to be made without moving the goods, unless otherwise agreed, title passes: