Exam 21: Ownership And Risk

Murphy stops at a garage sale and purchases an oak rocking chair.Murphy and the seller agree that Murphy will pick up the rocking chair the next day when Murphy will return with a truck.That night,there is an earthquake and the rocking chair is swallowed up by earth and totally destroyed.In this case,the seller had the risk of loss and must refund the purchase price to Murphy.

Tuan,Inc.contracted to buy 200 monogrammed blankets from Titex,Inc.Tuan paid for the blankets in advance.Before segregating and monogramming the blankets,Tuan filed for bankruptcy.Tuan will not be able to recover the blankets because:

Rayco Ski Shop purchased 500 pairs of skis from Skitron.Rayco is located in Colorado.Skitron's business is in Tennessee.The purchase order included the following term: "F.O.B.Colorado." The contract makes no mention of risk of loss or title.The contract can be described as a:

Assume that Bubba orders 15 cases of BBQ chips from Mays Potato Chips for his restaurant,Bubba's BBQ.Mays ships 15 cases of regular chips by mistake.If Bubba decides to keep the regular chips,in spite of the nonconformity with the contract,then the destruction of the chips when a water pipe breaks in the food storage room will result in:

Ruppart Manufacturing has a contract for the sale of 100 cases of teaching supplies to Teachers Co-op,Inc.Payment of the order is to be made in installments over the next year.Ruppart Manufacturing keeps a security interest in the cases sold to assure payment by Teachers Co-op,Inc.When the order is completed,Ruppart ships the order.Legally:

George's Greenery orders two dozen live dogwood trees from Nancy's Nursery.George's is to keep the dogwoods healthy by keeping them in a greenouse following certain instructions to keep the air at the right temperature,etc.The sale is made on a trial basis and George's may return all unsold dogwood trees at the end of 30 days.This contract is a:

In the case of Lindholm v.Brant,the court ruled:

A gun manufacturer in Helena,Montana agrees to sell guns and ammunition to the ATF in Washington,D.C.The terms of the contract specify that the goods are to be shipped "FOB,Chicago." When does the buyer acquire title and risk of loss?

Explain the concept and significance of identification of goods.Discuss how identification takes place.

Marco sells goods to Byron for his personal use on the basis that the goods may be returned if Byron is not satisfied with them.The sale is:

Crops are considered identified when they are planted.

Regardless of the language of the contract,title to goods passes to the buyer at the time and place at which the seller physically delivers the goods.

The term F.O.B.:

Roger purchased a tennis racquet from Rafael.Roger can prove he is a BFP by showing only that he gave value and acted in good faith.

Dick steals Jane's camcorder and sells it to Sid.Jane can recover the camcorder from Sid:

Sanco contracted to sell 1,000 cases of oil to AMF.The oil is located in a public warehouse,which has issued a warehouse receipt for it.Which of the following is correct?

Arco sells to Melvin 1,000 computers that are stored in Arco's warehouse.Arco gives Melvin the ownership documents and Melvin will pick up the computers at the warehouse.Title has passed to Melvin.

Hill Computers is a retailer,which buys its inventory from Acme Co.on credit,giving Acme a security interest in the inventory.Hubert buys a computer from Hill in the normal course of business.Hubert's title in the computer is:

Oceanside entered into a contract with the seller Old Tennessee,for the purchase of $6,431 worth of plants.The terms were sale and delivery C.O.D.with the express provision of "No Risk to Supplier," and a large logo at the top of papers stating: "NOTICE: ALL SHIPMENTS TRAVEL AT RISK AND COST OF PURCHASER." The plants were shipped by an experienced truck common carrier.Upon arrival in New York,it appeared as though some plants were in a poor state because of excessive heat.Although the carrier on its own marked the bill of lading to indicate that the temperature in the truck should be 50 degrees,this was not done for at least a portion of the journey.Oceanside rejected the shipment by writing "rejected" on the back of the trucker's bill of lading.However,the plants were retained "on consignment" at Oceanside's premises.There were no other formal written rejections or official notices of breach or defects given by the buyer to seller at any point prior to trial.Discuss who has the risk of loss.

A buyer has an insurable interest in goods when they are identified.