Question 1

Which of the following statements about the good faith purchaser is correct?

Accepted Answer

A) He is also known as the bona fide purchaser. 
B) He gave value for the goods. 
C) He may acquire good title from a seller with voidable title. 
D) All of the above. 
A) He is also known as the bona fide purchaser. 
B) He gave value for the goods. 
C) He may acquire good title from a seller with voidable title. 
D) All of the above.

Question 2

Crops are considered identified when they are harvested.

Accepted Answer

A) True 
 B)False

Question 3

Brian left his computer with CompuGeeks for repair.The following week,when he goes back to the shop to pick up his computer,he finds out that CompuGeeks sold it to Ian,a customer who was looking for a used computer.Brian can have his computer back from Ian.

Accepted Answer

A) True 
 B)False

Question 4

Graham,an adult,purchases a car from a minor,and subsequently sells it to Harlow,another adult.Harlow paid full value for the car and had no reason to know that Graham had purchased the car from a minor.Which of the following best describes this situation?

Accepted Answer

A) Graham had good title and Harlow gets good title. 
B) Graham had good title and Harlow gets a voidable title. 
C) Graham had voidable title and Harlow gets good title. 
D) Graham had void title and Harlow gets void title. 
A) Graham had good title and Harlow gets good title. 
B) Graham had good title and Harlow gets a voidable title. 
C) Graham had voidable title and Harlow gets good title. 
D) Graham had void title and Harlow gets void title.

Question 5

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 6

Which of the following sales would fall within the bulk sales provisions of Article 6?

Accepted Answer

A) The sale of a substantial part of the equipment of a business. 
B) The sale of a substantial part of a store's inventory. 
C) The sale of an office building. 
D) The sale of the chairs in a barber's shop. 
A) The sale of a substantial part of the equipment of a business. 
B) The sale of a substantial part of a store's inventory. 
C) The sale of an office building. 
D) The sale of the chairs in a barber's shop.

Question 7

Bernie's stereo has been damaged when his niece spilled some juice on it.He takes it to High Fidelity Co.to be fixed.Five days later,when he returns to the store to pick it up,he finds out that a clerk had sold it to a customer,thinking it was part of their used items inventory.Which of the following is true?

Accepted Answer

A) High Fidelity did not have the power to transfer Bernie's rights in the stereo.Bernie may recover his stereo from the third party. 
B) If the third party buyer was a good faith purchaser, Bernie will not be able to get his stereo back as he entrusted his stereo to High Fidelity. 
C) Bernie may recover his stereo provided he was given a receipt by High Fidelity. 
D) Bernie may recover his stereo if he can prove that the clerk at High Fidelity was not a good faith seller. 
A) High Fidelity did not have the power to transfer Bernie's rights in the stereo.Bernie may recover his stereo from the third party. 
B) If the third party buyer was a good faith purchaser, Bernie will not be able to get his stereo back as he entrusted his stereo to High Fidelity. 
C) Bernie may recover his stereo provided he was given a receipt by High Fidelity. 
D) Bernie may recover his stereo if he can prove that the clerk at High Fidelity was not a good faith seller.

Question 8

The term F.O.B.:

Accepted Answer

A) can indicate a destination or shipment contract. 
B) stands for "freight on board." 
C) requires the seller to insure the goods for the buyer's benefit. 
D) shifts the risk of loss to the buyer when the goods are identified. 
A) can indicate a destination or shipment contract. 
B) stands for "freight on board." 
C) requires the seller to insure the goods for the buyer's benefit. 
D) shifts the risk of loss to the buyer when the goods are identified.

Question 9

Discuss the concept of insurable interests.

Accepted Answer

An insurable interest arises when a part

Question 10

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 11

In the case Harmon v.Dunn,the court addressed the issue of:

Accepted Answer

A) The passing of risk of loss in case of the sale of a stolen good. 
B) The passing of risk of loss in case of breach of contract. 
C) The passing of risk of loss when there is no breach of contract and the goods are held by a bailee. 
D) The passing of risk of loss in case of death of the bailee. 
A) The passing of risk of loss in case of the sale of a stolen good. 
B) The passing of risk of loss in case of breach of contract. 
C) The passing of risk of loss when there is no breach of contract and the goods are held by a bailee. 
D) The passing of risk of loss in case of death of the bailee.

Question 12

Mike uses fraudulent means to induce Wanda to enter a sales contract.Mike obtains a voidable title to the goods.

Accepted Answer

A) True 
 B)False

Question 13

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 14

Jamie purchased a compound bow from Tyler.Jamie can prove he is a BFP by showing only that he gave value and acted in good faith.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A) under any circumstances. 
B) only if Sid knew that the camcorder was stolen from Jane. 
C) only if Sid did not know that the camcorder was stolen from Jane. 
D) only if Sid paid less than the fair market value for the camcorder. 
A) under any circumstances. 
B) only if Sid knew that the camcorder was stolen from Jane. 
C) only if Sid did not know that the camcorder was stolen from Jane. 
D) only if Sid paid less than the fair market value for the camcorder.

Question 16

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:

Accepted Answer

A) both Ruppart and Teachers have an insurable interest in the supplies. 
B) only Ruppart has an insurable interest in the supplies. 
C) only Teachers has an insurable interest in the supplies. 
D) neither Ruppart nor Teachers has an insurable interest in the supplies. 
A) both Ruppart and Teachers have an insurable interest in the supplies. 
B) only Ruppart has an insurable interest in the supplies. 
C) only Teachers has an insurable interest in the supplies. 
D) neither Ruppart nor Teachers has an insurable interest in the supplies.

Question 17

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 18

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 19

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.

Accepted Answer

A) True 
 B)False

Question 20

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:

Accepted Answer

A) Mays' having to bear the loss, because it shipped nonconforming goods to Bubba. 
B) Mays' having to bear the loss, because it failed to insure the chips. 
C) Bubba's having to bear the loss, because he accepted delivery of the nonconforming chips. 
D) Bubba's having to bear the loss, because it was a sale on approval contract. 
A) Mays' having to bear the loss, because it shipped nonconforming goods to Bubba. 
B) Mays' having to bear the loss, because it failed to insure the chips. 
C) Bubba's having to bear the loss, because he accepted delivery of the nonconforming chips. 
D) Bubba's having to bear the loss, because it was a sale on approval contract.

Exam 19: Ownership and Risk

Which of the following statements about the good faith purchaser is correct?

Crops are considered identified when they are harvested.

Brian left his computer with CompuGeeks for repair.The following week,when he goes back to the shop to pick up his computer,he finds out that CompuGeeks sold it to Ian,a customer who was looking for a used computer.Brian can have his computer back from Ian.

Graham,an adult,purchases a car from a minor,and subsequently sells it to Harlow,another adult.Harlow paid full value for the car and had no reason to know that Graham had purchased the car from a minor.Which of the following best describes this situation?

Which of the following sales would fall within the bulk sales provisions of Article 6?

The term F.O.B.:

Discuss the concept of insurable interests.

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.

In the case Harmon v.Dunn,the court addressed the issue of:

Mike uses fraudulent means to induce Wanda to enter a sales contract.Mike obtains a voidable title to the 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:

Jamie purchased a compound bow from Tyler.Jamie can prove he is a BFP by showing only that he gave value and acted in good faith.

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

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

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.

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