Question 1

Except in a finance lease, risk of loss passes to the lessee and is not retained by the lessor.

Accepted Answer

A) True 
 B)False

Question 2

Mere possession of goods by a bailee authorizes the bailee to sell them.

Accepted Answer

A) True 
 B)False

Question 3

Explain what a trial sale is.Identify the two types of trial sales recognized by the UCC and explain the test for distinguishing between the two types.Discuss transfer of title and risk or loss with each type of trial sale.

Accepted Answer

Some sales are made with the understandi

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

In a contract where the buyer is to pick up the goods at the seller's place of business and the seller is a merchant, the risk of loss passes to the buyer when the goods are tendered to the buyer.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is correct with regard to risk of loss, where the goods are in the possession of a bailee and are covered by a negotiable document of title?

Accepted Answer

A) Risk of loss passes when the buyer receives the document. 
B) Risk of loss passes when the document is tendered to the buyer. 
C) Risk of loss passes when notification of the arrival of the goods is given to the buyer. 
D) If the buyer is a merchant, risk of loss passes to the buyer when the goods are delivered. 
A) Risk of loss passes when the buyer receives the document. 
B) Risk of loss passes when the document is tendered to the buyer. 
C) Risk of loss passes when notification of the arrival of the goods is given to the buyer. 
D) If the buyer is a merchant, risk of loss passes to the buyer when the goods are delivered.

Question 7

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.

Accepted Answer

A) True 
 B)False

Question 8

In a lease, the lessee obtains the right to possess and use the goods for a period of time in return for consideration, but title does not pass.

Accepted Answer

A) True 
 B)False

Question 9

Under a shipment contract, title passes to the buyer at a time and place the seller contracts with the carrier to ship the goods.

Accepted Answer

A) True 
 B)False

Question 10

With regard to Article 6 of the Uniform Commercial Code, which of the following is accurate?

Accepted Answer

A) The National Conference of Commissioners on Uniform State Laws and the American Law Institute jointly issued a recommendation stating "that changes in the business and legal contexts in which sales are conducted have made regulation of bulk sales necessary." 
B) Over two-thirds of the states have repealed Article 6 of the UCC. 
C) Article 60 is a revision of Article 6. 
D) All of the above. 
E) None of the above. 
A) The National Conference of Commissioners on Uniform State Laws and the American Law Institute jointly issued a recommendation stating "that changes in the business and legal contexts in which sales are conducted have made regulation of bulk sales necessary." 
B) Over two-thirds of the states have repealed Article 6 of the UCC. 
C) Article 60 is a revision of Article 6. 
D) All of the above. 
E) None of the above.

Question 11

In a sale on approval:

Accepted Answer

A) possession, but not title, is transferred to the buyer for a stated period of time. 
B) possession and title are transferred to the buyer for a stated period of time. 
C) title, but not possession, is transferred to the buyer for a stated period of time. 
D) neither title nor possession is transferred to the buyer for a stated period of time. 
A) possession, but not title, is transferred to the buyer for a stated period of time. 
B) possession and title are transferred to the buyer for a stated period of time. 
C) title, but not possession, is transferred to the buyer for a stated period of time. 
D) neither title nor possession is transferred to the buyer for a stated period of time.

Question 12

The risk of loss for "sale or return" is the same as for a sale "on approval."

Accepted Answer

A) True 
 B)False

Question 13

A void title may allow good title to pass in special circumstances.

Accepted Answer

A) True 
 B)False

Question 14

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?

Accepted Answer

A) At such time as the contract of sale was entered. 
B) At such time as the buyer receives the negotiable document of title. 
C) When the seller tenders a nonnegotiable document of title to the bailee. 
D) When the bailee is orally notified of the sale. 
A) At such time as the contract of sale was entered. 
B) At such time as the buyer receives the negotiable document of title. 
C) When the seller tenders a nonnegotiable document of title to the bailee. 
D) When the bailee is orally notified of the sale.

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

Future goods can be the subject of a present sale.

Accepted Answer

A) True 
 B)False

Question 17

Article 6 of the Code does not:

Accepted Answer

A) apply to sales of goods in the ordinary course of business. 
B) define "bulk transfer" as any transfer in bulk and not in the ordinary course of business. 
C) apply to merchants whose principal business is the sale of merchandise from stock. 
D) include the transfer of a substantial part of equipment as a bulk transfer under any circumstances. 
E) All of the above. 
A) apply to sales of goods in the ordinary course of business. 
B) define "bulk transfer" as any transfer in bulk and not in the ordinary course of business. 
C) apply to merchants whose principal business is the sale of merchandise from stock. 
D) include the transfer of a substantial part of equipment as a bulk transfer under any circumstances. 
E) All of the above.

Question 18

A "buyer in the ordinary course of business" is necessarily a "good faith purchaser for value."

Accepted Answer

A) True 
 B)False

Question 19

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?

Accepted Answer

A) No, not until delivery to Idlewild. 
B) No, not until Henry sees the horse again. 
C) Yes, since Henry already paid for it. 
D) Yes, since the contract was made earlier in the day. 
A) No, not until delivery to Idlewild. 
B) No, not until Henry sees the horse again. 
C) Yes, since Henry already paid for it. 
D) Yes, since the contract was made earlier in the day.

Question 20

When delivery is to be made without moving the goods, unless otherwise agreed, title passes:

Accepted Answer

A) on delivery of a document of title, when the contract calls for delivery of such document. 
B) when an insurable interest arises. 
C) when a special property interest arises. 
D) only when the buyer or her agent takes actual possession of the goods. 
A) on delivery of a document of title, when the contract calls for delivery of such document. 
B) when an insurable interest arises. 
C) when a special property interest arises. 
D) only when the buyer or her agent takes actual possession of the goods.

Exam 21: Transfer of Title and Risk of Loss

Except in a finance lease, risk of loss passes to the lessee and is not retained by the lessor.

Mere possession of goods by a bailee authorizes the bailee to sell them.

Explain what a trial sale is.Identify the two types of trial sales recognized by the UCC and explain the test for distinguishing between the two types.Discuss transfer of title and risk or loss with each type of trial sale.

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

In a contract where the buyer is to pick up the goods at the seller's place of business and the seller is a merchant, the risk of loss passes to the buyer when the goods are tendered to the buyer.

Which of the following is correct with regard to risk of loss, where the goods are in the possession of a bailee and are covered by a negotiable document of title?

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.

In a lease, the lessee obtains the right to possess and use the goods for a period of time in return for consideration, but title does not pass.

Under a shipment contract, title passes to the buyer at a time and place the seller contracts with the carrier to ship the goods.

With regard to Article 6 of the Uniform Commercial Code, which of the following is accurate?

In a sale on approval:

The risk of loss for "sale or return" is the same as for a sale "on approval."

A void title may allow good title to pass in special circumstances.

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?

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

Future goods can be the subject of a present sale.

Article 6 of the Code does not:

A "buyer in the ordinary course of business" is necessarily a "good faith purchaser for value."

When delivery is to be made without moving the goods, unless otherwise agreed, title passes:

Introduction to Law

Business Ethics

Civil Dispute Resolution

Constitutional Law

Administrative Law

Criminal Law

Intentional Torts

Negligence and Strict Liability

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Consideration

Illegal Bargains

Contractual Capacity

Contracts in Writing

Third Parties to Contracts

Performance, Breach, and Discharge

Contract Remedies

Introduction to Sales and Leases

Performance

Product Liability: Warranties and Strict Liability

Sales Remedies

Form and Content

Transfer

Holder in Due Course

Liability of Parties

Bank Deposits, Collections, and Funds Transfers

Relationship of Principal and Agent

Relationship With Third Parties

Formation and Internal Relations of General Partnerships

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Limited Partnerships and Limited Liability Companies

Nature and Formation of Corporations

Financial Structure of Corporations

Management Structure of Corporations

Fundamental Changes of Corporations

Secured Transactions and Suretyship

Bankruptcy

Securities Regulation

Intellectual Property

Employment Law

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Accountants Legal Liability

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International Business Law

Introduction to Property, Property Insurance, Bailments, and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

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