Exam 21: Transfer of Title and Risk of Loss

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. In this case:

When one party breaches the sales contract, the Code places the risk of loss on that party.

A voidable title is no title.

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.

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

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?

Fungible goods are goods for which one unit is the equivalent of any other unit.

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

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

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.

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

How has the Code affected the rights of good faith purchasers with respect to minors?

The parties, by agreement, may divide the risk and shift the allocation of risk.

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

In Robinson v. Durham , the court found:

In a sale on approval:

Title to goods passes according to rules under the Code if the parties have no explicit agreement as to transfer of title.

Tom makes pottery in his spare time. Jackie asks if he'd sell her a covered bowl. Later that day, he telephones her and says she can have it for $50. She agrees, so he tells her he'll wrap it up for her and it will be ready in half an hour. Six days later, Jackie had not yet come for the bowl when a dog knocks the box off the shelf and breaks the bowl. Who is liable?

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.

Duncan Supply has consigned goods to Huffman Hardware. Huffman's creditors may not take possession of the consigned goods to satisfy their claims against Huffman.