Exam 21: Transfer of Title and Risk of Loss

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?

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?

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

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

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

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

Tender requires that the seller, at a reasonable time:

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

Future goods can be the subject of a present sale.

Goods that have been entrusted to a merchant may be sold by that merchant even when the merchant has been told not to sell the goods, and when a merchant sells such goods to a buyer in the ordinary course of business, that buyer has title that is superior to the title of the original owner who entrusted them to the merchant.

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.

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

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.

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

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?

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

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

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

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