Question 1

In a consignment contract,the consignee:

Accepted Answer

A)  holds title. 
B)  takes the goods intending to resell them, and the goods are subject to the claims of the creditors of the consignee. 
C)  is the party who leaves goods with the consignor to be resold. 
D)  cannot transfer title since the consignor retains the title. 
A)  holds title. 
B)  takes the goods intending to resell them, and the goods are subject to the claims of the creditors of the consignee. 
C)  is the party who leaves goods with the consignor to be resold. 
D)  cannot transfer title since the consignor retains the title. B

Question 2

A purchaser may acquire better title than the seller had.

Accepted Answer

A) True 
 B)False  True

Question 3

Mayco has received goods from Wallace pursuant to a sale or return agreement.If Mayco subsequently declares bankruptcy,the goods will be:

Accepted Answer

A)  returned to Wallace because title did not pass to Mayco under this type of sale. 
B)  belong to Mayco and will not be a part of the bankruptcy. 
C)  subject to the claims of Mayco's creditors under Section 2-326 of the Uniform Commercial Code. 
D)  will be kept by the bankruptcy judge and clerk. 
A)  returned to Wallace because title did not pass to Mayco under this type of sale. 
B)  belong to Mayco and will not be a part of the bankruptcy. 
C)  subject to the claims of Mayco's creditors under Section 2-326 of the Uniform Commercial Code. 
D)  will be kept by the bankruptcy judge and clerk. C

Question 4

Marco Manufacturing contracted to sell Kurtz Industries 3,000 iron clasps.The contract specified: F.O.B.Kurtz Industries.Upon arrival and inspection,the goods were rejected by Kurtz Industries because they did not conform to the contract specifications.In transit back to Marco Manufacturing,the common carrier's truck overturned and completely destroyed the clasps.Which statement is correct?

Accepted Answer

A)  Marco may sue Kurtz for the contract price, as risk of loss transferred to Kurtz at the F.O.B. point. 
B)  Kurtz will not be liable for the purchase price. The risk of loss had not yet transferred since the goods were nonconforming. 
C)  The loss will be split between the parties upon a 50/50 basis. 
D)  The loss will be assigned to the party who could best bear the loss. 
A)  Marco may sue Kurtz for the contract price, as risk of loss transferred to Kurtz at the F.O.B. point. 
B)  Kurtz will not be liable for the purchase price. The risk of loss had not yet transferred since the goods were nonconforming. 
C)  The loss will be split between the parties upon a 50/50 basis. 
D)  The loss will be assigned to the party who could best bear the loss.

Question 5

The identification of goods permits the buyer to:

Accepted Answer

A)  obtain insurance on the goods. 
B)  take title to the goods in any manner that the parties agree upon. 
C)  enter into a contract with the seller. 
D)  Both a and b 
A)  obtain insurance on the goods. 
B)  take title to the goods in any manner that the parties agree upon. 
C)  enter into a contract with the seller. 
D)  Both a and b

Question 6

Baker Furniture sold 50 living room sets to King's Department Store.The parties did not agree on passage of title,but the delivery term was F.O.B.place of shipment.Discuss title and risk of loss regarding the furniture.

Accepted Answer

Since the goods are to be moved,title pa

Question 7

A contract that requires a seller to deliver goods to the carrier is:

Accepted Answer

A)  a destination contract. 
B)  a shipment contract. 
C)  a C.I.F. contract. 
D)  a C.O.D. contract. 
A)  a destination contract. 
B)  a shipment contract. 
C)  a C.I.F. contract. 
D)  a C.O.D. contract.

Question 8

Discuss the concept of insurable interests.

Accepted Answer

An insurable interest arises when a part

Question 9

Buyer is located in Des Moines,Iowa and seller is located in Sacramento,California.The contract specifies F.O.B.Des Moines.This contract is a:

Accepted Answer

A)  destination contract. 
B)  sale or return. 
C)  shipment contract. 
D)  sale on approval. 
A)  destination contract. 
B)  sale or return. 
C)  shipment contract. 
D)  sale on approval.

Question 10

In a shipment contract,title and risk of loss pass to the buyer when the goods are properly tendered at the destination point.

Accepted Answer

A) True 
 B)False

Question 11

If Terrill steals a digital camera and sells it to Samuel,Samuel will get a valid title as long as he can prove he gave value for the camera and acted in good faith.

Accepted Answer

A) True 
 B)False

Question 12

On impulse,you purchase a travel trailer and ask your acquaintance,Max,if you can leave the trailer at the edge of his restaurant's parking lot until you can have a concrete pad built to store the trailer on your property.Max agrees.When you return for the trailer the next week,it is gone and you find out that Max sold it.You can:

Accepted Answer

A)  recover the trailer because Max did not have any ownership interest to pass. 
B)  recover, but only if Max bought insurance to cover the trailer while it was on his property. 
C)  not recover because you "entrusted" the trailer to Max, who then had a right to sell it. 
D)  not recover because Max had only a voidable title to transfer. 
A)  recover the trailer because Max did not have any ownership interest to pass. 
B)  recover, but only if Max bought insurance to cover the trailer while it was on his property. 
C)  not recover because you "entrusted" the trailer to Max, who then had a right to sell it. 
D)  not recover because Max had only a voidable title to transfer.

Question 13

In which case does the buyer receive no title to the goods he purchases?

Accepted Answer

A) 	Owner has good title. Max steals the goods and sells them to buyer. 
B) 	Owner has good title. Max purchases the goods using deception. He then sells them to buyer who gives value and acts in good faith. 
C) 	Owner has good title. Max purchases the goods using fraud. He then sells them to buyer who is not a BFP. 
D) 	All of the above. 
E) 	Both a and c. 
A) 	Owner has good title. Max steals the goods and sells them to buyer. 
B) 	Owner has good title. Max purchases the goods using deception. He then sells them to buyer who gives value and acts in good faith. 
C) 	Owner has good title. Max purchases the goods using fraud. He then sells them to buyer who is not a BFP. 
D) 	All of the above. 
E) 	Both a and c.

Question 14

Imogene takes her diamond solitaire ring to Sparkle Jewelry Shop to have the prongs holding the diamond retipped and have the ring cleaned.The clerk at Sparkle says she will have to leave the ring and that it should be ready in about a week.When Imogene returns in a week to get her ring,she finds out that the ring has been sold.Which of the following is true?

Accepted Answer

A)  Sparkle Jewelry Shop had the power to transfer all of Imogene's rights in the ring to a good faith buyer in the ordinary course of business. 
B)  This situation was a theft of the ring by Sparkle, and Sparkle must retrieve the ring and return it to Imogene. 
C)  The buyer of the ring must return it to Imogene since the buyer did not fully investigate whether Sparkle had good title to the ring. 
D)  Imogene has lost title to her ring and has no recourse since she is responsible for investigating the merchant's integrity before leaving her property. 
A)  Sparkle Jewelry Shop had the power to transfer all of Imogene's rights in the ring to a good faith buyer in the ordinary course of business. 
B)  This situation was a theft of the ring by Sparkle, and Sparkle must retrieve the ring and return it to Imogene. 
C)  The buyer of the ring must return it to Imogene since the buyer did not fully investigate whether Sparkle had good title to the ring. 
D)  Imogene has lost title to her ring and has no recourse since she is responsible for investigating the merchant's integrity before leaving her property.

Question 15

Garden World orders 120 hand cultivators from Green Thumb,Inc.When the cultivators arrive,they seem fine,so Garden World accepts them.As the stock person is putting the cultivators on display,she notices that the tines are loose on all the cultivators.Garden World returns the cultivators to Green Thumb,but they are lost when the delivery truck slips on an oily spot in the road and drives into a nearby lake.Discuss who bears the risk of loss for the shipment.

Accepted Answer

When a buyer accepts goods but then righ

Question 16

Under the UCC,the party who has title to the goods always has the risk of loss.

Accepted Answer

A) True 
 B)False

Question 17

Rayco entered into a contract to buy Chia Pets from We Grow 'Em.The contract specified that the shipment would be "F.O.B.destination; title to pass on the date of shipment." The goods were destroyed in transit to Rayco.Rayco argues that the loss is We Grow 'Em's.Analyze the situation and determine who is liable for the loss.

Accepted Answer

The question is who had the risk of loss

Question 18

The UCC looks solely upon "title" to determine ownership in goods.

Accepted Answer

A) True 
 B)False

Question 19

Mike sold his car to Beth,who was to pick the car up at Mike's house by 12:00 noon on September 1.Mike was at his house waiting for Beth but she was late.In fact,when Beth arrived she discovered Mike's home and the car destroyed by a fire that started at 1:00 p.m.The risk of loss falls on:

Accepted Answer

A)  Mike because Beth had not taken possession of the car. 
B)  Beth because Mike was ready, willing, and able to tender the car at 12:00 noon. 
C)  Beth because under the UCC, the buyer bears the risk of loss. 
D)  Mike, as he had possession of the car. 
A)  Mike because Beth had not taken possession of the car. 
B)  Beth because Mike was ready, willing, and able to tender the car at 12:00 noon. 
C)  Beth because under the UCC, the buyer bears the risk of loss. 
D)  Mike, as he had possession of the car.

Question 20

You leave your watch with Bryte Jewelers for repair.Bryte could not transfer ownership interests in the watch to a customer of the jewelry shop without your permission.

Accepted Answer

A) True 
 B)False

Exam 21: Ownership And Risk

In a consignment contract,the consignee:

A purchaser may acquire better title than the seller had.

Mayco has received goods from Wallace pursuant to a sale or return agreement.If Mayco subsequently declares bankruptcy,the goods will be:

The identification of goods permits the buyer to:

Baker Furniture sold 50 living room sets to King's Department Store.The parties did not agree on passage of title,but the delivery term was F.O.B.place of shipment.Discuss title and risk of loss regarding the furniture.

A contract that requires a seller to deliver goods to the carrier is:

Discuss the concept of insurable interests.

Buyer is located in Des Moines,Iowa and seller is located in Sacramento,California.The contract specifies F.O.B.Des Moines.This contract is a:

In a shipment contract,title and risk of loss pass to the buyer when the goods are properly tendered at the destination point.

If Terrill steals a digital camera and sells it to Samuel,Samuel will get a valid title as long as he can prove he gave value for the camera and acted in good faith.

In which case does the buyer receive no title to the goods he purchases?

Under the UCC,the party who has title to the goods always has the risk of loss.

The UCC looks solely upon "title" to determine ownership in goods.

Mike sold his car to Beth,who was to pick the car up at Mike's house by 12:00 noon on September 1.Mike was at his house waiting for Beth but she was late.In fact,when Beth arrived she discovered Mike's home and the car destroyed by a fire that started at 1:00 p.m.The risk of loss falls on:

You leave your watch with Bryte Jewelers for repair.Bryte could not transfer ownership interests in the watch to a customer of the jewelry shop without your permission.

Introduction To Law

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