Deck 18: Transfer of Title and Risk in Sales Con

Question 1

Creditors of the seller are not allowed to seize goods in the belief that the seller owns them.

Answer 1

False

Question 2

If the owner entrusts goods to a merchant who deals in goods of that kind, the merchant does not have the power to transfer the entruster's title to anyone who buys in the ordinary course of business.

Answer 2

False

Question 3

Documents that show ownership are called documents of _____.

A) estoppel
B) consignment
C) bailment
D) title

Answer 3

D

Question 4

Which of the following is true of a sale by entrustee?

A) The entrustee has the power to transfer the title of the goods to a third party in the entruster's name.
B) The goods entrusted are subject to the claims of the entrustee's creditors.
C) The entrustee is not liable to the owner for damages caused by the sale of the goods.
D) The entrustee, as a prospective customer, cannot convey the goods if it is obtained by worthless check or fraud.

Question 5

Which of the following is true of a shipment contract?

A) The carrier is liable for the goods while they are in transit from the seller to the buyer.
B) The title and risk of loss pass to the buyer when the goods are delivered to the carrier.
C) The seller has an insurable interest in the goods until they are delivered to the buyer.
D) The title and risk of loss pass to the buyer when the payment is made by the buyer.

Question 6

A document of title issued by a storage company for goods stored is known as a _____.

A) bailment receipt
B) sales receipt
C) consignment receipt
D) warehouse receipt

Question 7

Which of the following is an example of a consignment?

A) A sells 10 sacks of wheat to B at the market price.
B) A delivers a motorcycle to B for servicing.
C) A sends a shipment of farm produce to B for sale.
D) A sends one ton of wheat to B's warehouse for storage.

Question 8

The right of ownership of property or evidence of ownership is called title.

Question 9

In the event of goods damaged through no fault of either the buyer or the seller, the party with control over the goods bears the risk of loss.

Question 10

In the absence of a contrary agreement, the buyer under a sale or return cannot return all of the goods or any commercial unit thereof.

Question 11

A consignment is the same as a sale with a right to return.

Question 12

Which of the following is true of fungible goods?

A) They are goods that are  not quantifiable in nature.
B) They are goods that are always homogenous in nature.
C) They are goods that are always noncommercial in nature.
D) They are goods that cannot be substituted for other similar goods.

Question 13

In a sale or return contract, the cost and risk of return is borne by the seller.

Question 14

When goods are sold at an auction in separate lots, each lot is considered a separate transaction.

Question 15

Which of the following best describes the term "title"?

A) It is the right to inherit property in the future.
B) It is the temporary transfer of possession of personal property.
C) It is the transfer of possession of goods for the purpose of sale.
D) It is the right of ownership of property or evidence of ownership.

Question 16

Generally, people can sell only such interest or title in goods as they possess.

Question 17

In the absence of an extension of credit, a seller has the right to keep the goods until the buyer pays for them.

Question 18

A temporary transfer of possession of personal property without the intention of further sales is known as a(n) _____.

A) denouement
B) assignment
C) bailment
D) consignment

Question 19

Explain documents of title.

Question 20

A sale on approval is a completed sale with the right of the buyer to return the goods and thereby set aside the sale.