Question 1

In a sale on approval:

Accepted Answer

A)  possession, but not title, is transferred to the buyer for a stated period of time. 
B)  possession and title are transferred to the buyer for a stated period of time. 
C)  title, but not possession, is transferred to the buyer for a stated period of time. 
D)  neither title nor possession is transferred to the buyer for a stated period of time. 
A)  possession, but not title, is transferred to the buyer for a stated period of time. 
B)  possession and title are transferred to the buyer for a stated period of time. 
C)  title, but not possession, is transferred to the buyer for a stated period of time. 
D)  neither title nor possession is transferred to the buyer for a stated period of time.

Question 2

The bulk sales portion (Article 6) of the Code applies only to transfers in the ordinary course of business.

Accepted Answer

A) True 
 B)False

Question 3

Under a shipment contract, title passes to the buyer at a time and place the seller contracts with the carrier to ship the goods.

Accepted Answer

A) True 
 B)False

Question 4

The Windows, Inc.v.Jordan Panel Systems Corp.case illustrated the concept that:

Accepted Answer

A)  unless the parties expressly specify that the contract requires the seller to deliver to a particular destination, the contract is generally considered to be a shipment contract. 
B)  goods in the possession of a bailee which are to be delivered without being moved will have the risk of loss pass to the buyer when the buyer receives a negotiable document of title. 
C)  unless the parties expressly designate the type of contract, it will be interpreted to be a destination contract. 
D)  express, specific provisions in a contract control as long as they are not unconscionable or grossly unfair to one of the parties. 
A)  unless the parties expressly specify that the contract requires the seller to deliver to a particular destination, the contract is generally considered to be a shipment contract. 
B)  goods in the possession of a bailee which are to be delivered without being moved will have the risk of loss pass to the buyer when the buyer receives a negotiable document of title. 
C)  unless the parties expressly designate the type of contract, it will be interpreted to be a destination contract. 
D)  express, specific provisions in a contract control as long as they are not unconscionable or grossly unfair to one of the parties.

Question 5

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

Accepted Answer

A)  the UCC requires proper state licensing for a company claiming to be a merchant to actually have merchant status. 
B)  risk of loss depends on who has title to the goods at the time the goods are damaged or destroyed. 
C)  a buyer in the ordinary course of business acquires good title when buying from a merchant seller who was entrusted with possession of the goods. 
D)  a void title is no title. 
A)  the UCC requires proper state licensing for a company claiming to be a merchant to actually have merchant status. 
B)  risk of loss depends on who has title to the goods at the time the goods are damaged or destroyed. 
C)  a buyer in the ordinary course of business acquires good title when buying from a merchant seller who was entrusted with possession of the goods. 
D)  a void title is no title.

Question 6

Wayne sells James a forklift, but retains a security interest in the equipment.Wayne no longer has an insurable interest in the forklift since title has passed to James.

Accepted Answer

A) True 
 B)False

Question 7

Darren ordered 1,200 sq.ft.of sea foam green carpet from DalCar Company.In error, DalCar Company shipped 1,200 sq.ft.of sea side blue carpet.In this case, the risk of loss remains with the seller until the seller remedies the defect or until Darren accepts the sea side blue carpet.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

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

Question 9

A voidable title is no title.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

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?

Accepted Answer

A)  No, since Hanna was a good faith purchaser for value. 
B)  Yes, since Alex had void title to the ring. 
C)  Yes, since a true owner can always recover her own property. 
D)  Yes, since Alex had voidable title to the ring. 
A)  No, since Hanna was a good faith purchaser for value. 
B)  Yes, since Alex had void title to the ring. 
C)  Yes, since a true owner can always recover her own property. 
D)  Yes, since Alex had voidable title to the ring.

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

The bulk sales portion (Article 6) of the Code  requires buyers in a bulk sale to provide notice to the seller's creditors and to maintain a list of the seller's creditors and a schedule of property obtained in a bulk sale for six months after the bulk sale takes place.

Accepted Answer

A) True 
 B)False

Question 14

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?

Accepted Answer

A)  When the bailee is orally notified of the sale. 
B)  At such time as the buyer receives the negotiable document of title. 
C)  At such time as the contract of sale was entered. 
D)  When the seller tenders a nonnegotiable document of title to the bailee. 
A)  When the bailee is orally notified of the sale. 
B)  At such time as the buyer receives the negotiable document of title. 
C)  At such time as the contract of sale was entered. 
D)  When the seller tenders a nonnegotiable document of title to the bailee.

Question 15

The UCC "risk of loss" rules assign the loss according to who has ownership of the goods.

Accepted Answer

A) True 
 B)False

Question 16

Explain what a trial sale is.Identify the two types of trial sales recognized by the UCC and explain the test for distinguishing between the two types.Discuss transfer of title and risk or loss with each type of trial sale.

Accepted Answer

Some sales are made with the understandi

Question 17

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.

Accepted Answer

a.Under the Code, Arthur has "entrusted"

Question 18

The risk of loss for "sale or return" is the same as for a sale "on approval."

Accepted Answer

A) True 
 B)False

Question 19

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.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A)  when the goods are identified if they were not identified at the time of contracting. 
B)  at the time and place of contracting under all circumstances. 
C)  at the time the seller completes performance. 
D)  when a document of title is created if a negotiable document of title is involved. 
A)  when the goods are identified if they were not identified at the time of contracting. 
B)  at the time and place of contracting under all circumstances. 
C)  at the time the seller completes performance. 
D)  when a document of title is created if a negotiable document of title is involved.

Exam 21: Transfer of Title and Risk of Loss

In a sale on approval:

The bulk sales portion (Article 6) of the Code applies only to transfers in the ordinary course of business.

Under a shipment contract, title passes to the buyer at a time and place the seller contracts with the carrier to ship the goods.

The Windows, Inc.v.Jordan Panel Systems Corp.case illustrated the concept that:

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

Wayne sells James a forklift, but retains a security interest in the equipment.Wayne no longer has an insurable interest in the forklift since title has passed to James.

Darren ordered 1,200 sq.ft.of sea foam green carpet from DalCar Company.In error, DalCar Company shipped 1,200 sq.ft.of sea side blue carpet.In this case, the risk of loss remains with the seller until the seller remedies the defect or until Darren accepts the sea side blue carpet.

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

A voidable title is no title.

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

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?

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

The bulk sales portion (Article 6) of the Code requires buyers in a bulk sale to provide notice to the seller's creditors and to maintain a list of the seller's creditors and a schedule of property obtained in a bulk sale for six months after the bulk sale takes place.

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?

The UCC "risk of loss" rules assign the loss according to who has ownership of the goods.

Explain what a trial sale is.Identify the two types of trial sales recognized by the UCC and explain the test for distinguishing between the two types.Discuss transfer of title and risk or loss with each type of trial sale.

The risk of loss for "sale or return" is the same as for a sale "on approval."

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.

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

Introduction to Law

Business Ethicspart Ii: the Legal Environment of Business

Civil Dispute Resolution

Constitutional Law

Administrative Law

Criminal Law

Negligence and Strict Liabilitypart Iii: Contracts

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 Remediespart Iv: Sales

Introduction to Sales and Leases

Performance

Product Liability: Warranties and Strict Liability

Sales Remediespart V: Negotiable Instruments

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits, Collections, and Funds Transferspart Vi: Agency

Relationship of Principal and Agent

Relationship With Third Partiespart Vii: Business Associations

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature and Formation of Corporations

Financial Structure of Corporations

Management Structure of Corporations

Fundamental Changes of Corporationspart Viii: Debtor and Creditor Relations

Secured Transactions and Suretyship

Bankruptcypart Ix: Regulation of Business

Securities Regulation

Intellectual Property

Employment Law

Antitrust

Accountants Legal Liability

Consumer Protection

International Business Lawpart X: Property

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

Interests in Real Property

Transfer and Control of Real Property

Trusts and Wills

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