Deck 23: Title and Risk of Loss

Question 1

In an FOB place of shipment contract the seller's risk of loss for goods under an that are damaged in transit,ends when they are

Answer 1

False

Question 2

Once goods in a contract have been identified the buyer holds an insurable interest in them.

Answer 2

True

Question 3

Someone who finds and resells stolen property passes on a good title to a good faith purchaser.

Answer 3

False

Question 4

In a sale on approval,the buyer's approval must be demonstrated by express words.

Question 5

Supply chain management refers to the management issues of risk and title as goods flow through commerce.

Question 6

In an FOB shipment contract,title to the goods pass to the buyer when goods are delivered to the carrier.

Question 7

A document of title is not sufficient for a creditor to take an interest in goods.

Question 8

Future goods can always be identified before they are manufactured.

Question 9

A buyer with a voidable title cannot pass on valid title to a subsequent good faith purchaser.

Question 10

In an FOB place of shipment contract,the seller's obligation ends when he delivers the goods to a carrier for shipment.

Question 11

Fungible goods are always homogeneous.

Question 12

Title to goods can be transferred without the actual delivery of the goods involved.

Question 13

If a buyer purchases goods on approval,the buyer's creditors cannot reach such goods until there is an approval.

Question 14

In a non-shipment contract involving a merchant-seller,risk of loss passes to the buyer when he actually receives the goods from the merchant.

Question 15

A seller's insurable interest in goods always terminates with the passage of the title to the buyer.

Question 16

Under a CF contract,the cost of shipment is included in the contract price.

Question 17

Generally,a bailee can pass good title to a good-faith purchaser even when the sale was not authorized by the owner.

Question 18

When a person picks out a custom necktie and purchases it,the transaction involves fungible goods.

Question 19

COD is a shipping term that requires the buyer to pay in order to gain physical possession of the goods.

Question 20

Goods are identified when they have been selected as the goods called for by a sales contract.

Question 21

In a __________,no sale takes place (meaning there is no transfer of title)until the buyer accepts the goods.

A) conditional sale
B) contingency sale
C) sale or return
D) sale on approval

Question 22

A consignment sale is treated as a sale or return under UCC Article 2.

Question 23

A consignment sale is treated as a(n)__________ under UCC Article 2,and the dealer-consignee has full authority to sell the goods for the consignor and can pass title to the goods.

A) ordinary sale
B) final sale
C) sale on approval
D) sale or return

Question 24

A sale or return is a completed sale with an option for the buyer to return the goods.

Question 25

"Without reserve" auctions give the auctioneer the right to withdraw the goods from the sale process if the bids are not high enough.

Question 26

Most courts hold that when a customer takes an item from the shelf in a self-service store,there is:

A) no sale.
B) a sale.
C) a contract to sell.
D) a conditional sale.

Question 27

The expense and the risk of return in a sale or return situation is on the:

A) seller.
B) buyer.
C) lienholder.
D) secured creditor.

Question 28

A __________ is a completed sale with an option for the buyer to return the goods.

A) conditional sale
B) contingency sale
C) sale or return
D) sale on approval

Question 29

In a consignment,the dealer-consignee is often referred to as a(n):

A) remainder.
B) factor.
C) quotient.
D) exponent.

Question 30

If shipped goods are damaged or destroyed after risk of loss passes:

A) the contract is avoided
B) the seller has breached the contract
C) the buyer has the option to accept or not accept the goods
D) it is the buyer's loss

Question 31

If an owner has acted in a way that misleads others,the owner may be__________from asserting ownership.

A) estopped
B) voided
C) breached
D) identified

Question 32

In a sale or return transaction,until the actual return of the goods is made,title and risk of loss remain with the buyer.

Question 33

In an FOB Place of Destination shipment Title passes to the buyer:

A) when the goods are tendered at the seller's loading dock.
B) when goods are tendered to the buyer at the destination.
C) when goods are tendered to the carrier.
D) when the goods are identified by the seller.

Question 34

In the case of a nonshipment contract,risk of loss passes to the buyer upon actual receipt of goods:

A) only if the seller is a merchant
B) only if the seller is a nonmerchant
C) only if the buyer has already paid for them
D) in all nonshipment contracts

Question 35

When particular goods have been selected by either the buyer or the seller,or both,as being the goods called for by the sales contract,the goods are said to be

A) identified.
B) actualized.
C) realized.
D) materialized.

Question 36

__________reserve auctions are those that give the auctioneer the right to withdraw the goods from the sale process if the bids are not high enough.

A) Qualified
B) Restricted
C) With
D) Without

Question 37

In a self-service store a sale cannot occur until the goods are paid for.

Question 38

__________ goods are goods that,when mixed together,are indistinguishable.

A) Tangible
B) Intangible
C) Heterogeneous
D) Fungible

Question 39

Goods that are not yet in existence or are not yet owned by the seller are__________ goods.

A) fungible
B) nonexistent
C) future
D) contingent

Question 40

If a contract contains a delivery term of __________,the seller's responsibility is to get the goods to the buyer.

A) FOB place of shipment
B) FOB place of destination
C) CIF place of shipment
D) CIF place of destination

Question 41

When goods are sold at an auction in separate lots,the title to each lot passes:

A) when the winning bidder tenders payment for the lot.
B) when the lot is received by the winning bidder.
C) only when all lots have been sold.
D) when the auctioneer announces that the lot in question has been sold to the bidder.

Question 42

Anne Robertson obtained telescopes from the See-Well Optics Company at dealer prices on the pretense of being a dealer in optical equipment.See-Well later determined that Robertson was not,had never been,and did not plan to be a dealer in optics.By the time these facts emerged,Robertson had succeeded in selling the telescopes to several individuals located throughout the country.These buyers had responded to advertisements placed by Robertson,who again had represented herself as a dealer in optical equipment.The buyers had purchased the telescopes in good faith at prices consistent with comparable equipment.See-Well located these buyers and demanded that the telescopes be returned as property obtained through fraud.Do the buyers of these telescopes have to return their purchases?

Question 43

Anderson Clock Company is in the business of selling and repairing clocks.Jay purchased a grandfather clock from them.Laurie had left the clock at Anderson's for a cleaning and calibration.When Laurie found out the clock had been sold,she contacted Jay and demanded he return it.Must Jay comply with Laurie's demand?What other options does she have?

Question 44

__________ reserve auctions are those in which the goods must be sold regardless of whether the auctioneer is satisfied with the levels of the bids.

A) With
B) Without
C) Unqualified
D) Unrestricted

Question 45

Bob Corporation entered into a contract to sell parts to Zeck.The contract provided that the goods would be shipped "FOB Bob's warehouse." Bob shipped parts to Zeck that were stolen from the carrier.When Zeck checked the invoice,Zeck discovered that Bob had sent Model #20B instead of Model #20A,which the contract required.Whose loss? Why?