Question 1

Z, a seller in Miami, enters into a contract which states that goods are to be delivered to X, a buyer in New York. Title is to remain with Z until delivery. This is:

Accepted Answer

A)  a shipment contract. 
B)  an FOB Miami contract. 
C)  a destination contract. 
D)  a consignment.

Question 2

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 3

When goods have been damaged without the fault of either the seller or buyer, if the risk of loss is placed on the seller, the seller has no right to recover the purchase price from the buyer and has no right to the return of the damaged goods.

Accepted Answer

A) True 
 B)False

Question 4

In __________ the goods are sold and delivered to the buyer with an option to return them to the seller.

Accepted Answer

A)  a bailment 
B)  a sale on approval 
C)  a sale or return 
D)  entrusting to a merchant

Question 5

Brett contracts to purchase a particular Chevrolet from Johnson's car lot. Brett obtains a "special property interest" in the car when:

Accepted Answer

A)  the contract is made. 
B)  the car is tendered to Brett. 
C)  Brett pays for the car. 
D)  Brett accepts the car.

Question 6

The buyer and seller of goods may not simultaneously hold insurable interests in the goods.

Accepted Answer

A) True 
 B)False

Question 7

A voidable title is no title.

Accepted Answer

A) True 
 B)False

Question 8

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

The answer of Explain what a trial sale is. Identify...

Question 9

Wayne sells James a forklift, but retains a security interest in the equipment. Wayne no longer has an insurable interest in the forklift since title has passed to James.

Accepted Answer

A) True 
 B)False

Question 10

Louella purchases a steam cleaner from Alden for $120. She must believe Alden is the owner of or has the authority to sell the cleaner in order to receive the protection of a good faith purchaser.

Accepted Answer

A) True 
 B)False

Question 11

A(n) __________ is a delivery of possession of personal property to an agent for sale by the agent.

Accepted Answer

A)  sale on approval 
B)  consignment 
C)  sale or return 
D)  None of these.

Question 12

Mary orders a dress for $1,000. The designer sends the wrong size. Mary doesn't inspect the dress on arrival and therefore doesn't discover the nonconformity until the day before she is to wear it to her first board meeting as president of Tri-State Engineering. She calls the designer and sends the dress back, but it is lost in the mail. Mary's insurance would cover $400 of the loss. The designer's insurance would cover $900. Who is liable?

Accepted Answer

A)  Mary will bear the whole loss because she accepted the goods. 
B)  The designer will bear the whole loss because Mary returned the nonconforming goods. 
C)  Mary will owe $100, the designer $900. 
D)  The risk is Mary's to the extent of $400.

Question 13

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 14

The Heinrich v. Titus-Will Sales, Inc. case stands for the principle that:

Accepted Answer

A)  the UCC requires proper state licensing for a company claiming to be a merchant to actually have merchant status. 
B)  a buyer in the ordinary course of business acquires good title when buying from a merchant seller who was entrusted with possession of the goods. 
C)  risk of loss depends on who has title to the goods at the time the goods are damaged or destroyed. 
D)  a void title is no title.

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

Jack is a guest at Harry's home. While there, he goes into the library and picks up a music box that is part of Harry's collection. Jack overwinds the stem and it breaks. Hoping Harry won't notice, Jack takes the music box for repair to a jeweler who sells similar ones. The jeweler fixes it, but forgets to tag it and an unsuspecting clerk sells it to Robert. Jack is frantic. Can Harry get the music box from Robert?

Accepted Answer

A)  No, the jeweler gives good title to a bona fide purchaser for value. 
B)  No, the jeweler was not a merchant with regard to music boxes. 
C)  Yes, Robert was not a buyer in the ordinary course of business. 
D)  Yes, Robert has assumed only Jack's title, which is no title at all.

Question 17

When goods are to be physically moved by a third-party carrier and delivery is made by physically moving the goods, title passes at the time and place at which the seller completes performance.

Accepted Answer

A) True 
 B)False

Question 18

a. What is a bulk transfer? 
b. What is the purpose of bulk sales law? 
c. What is the effect of a failure to comply with the provisions in Article 6 in those states that still follow this Article?

Accepted Answer

The answer of a. What is a bulk transfer? 
b....

Question 19

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.

Question 20

The Windows, Inc. v. Jordan Panel Systems Corp. case illustrated the concept that:

Accepted Answer

A)  unless the parties expressly specify that the contract requires the seller to deliver to a particular destination, the contract is generally considered to be a shipment contract. 
B)  unless the parties expressly designate the type of contract, it will be interpreted to be a destination contract. 
C)  goods in the possession of a bailee which are to be delivered without being moved will have the risk of loss pass to the buyer when the buyer receives a negotiable document of title. 
D)  express, specific provisions in a contract control as long as they are not unconscionable or grossly unfair to one of the parties.

Exam 21: Transfer of Title and Risk of Loss

Z, a seller in Miami, enters into a contract which states that goods are to be delivered to X, a buyer in New York. Title is to remain with Z until delivery. This is:

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

When goods have been damaged without the fault of either the seller or buyer, if the risk of loss is placed on the seller, the seller has no right to recover the purchase price from the buyer and has no right to the return of the damaged goods.

In __________ the goods are sold and delivered to the buyer with an option to return them to the seller.

Brett contracts to purchase a particular Chevrolet from Johnson's car lot. Brett obtains a "special property interest" in the car when:

The buyer and seller of goods may not simultaneously hold insurable interests in the goods.

A voidable title is no title.

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.

Wayne sells James a forklift, but retains a security interest in the equipment. Wayne no longer has an insurable interest in the forklift since title has passed to James.

Louella purchases a steam cleaner from Alden for $120. She must believe Alden is the owner of or has the authority to sell the cleaner in order to receive the protection of a good faith purchaser.

A(n) __________ is a delivery of possession of personal property to an agent for sale by the agent.

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.

The Heinrich v. Titus-Will Sales, Inc. case stands for the principle that:

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

When goods are to be physically moved by a third-party carrier and delivery is made by physically moving the goods, title passes at the time and place at which the seller completes performance.

a. What is a bulk transfer? b. What is the purpose of bulk sales law? c. What is the effect of a failure to comply with the provisions in Article 6 in those states that still follow this Article?

In a sale on approval:

The Windows, Inc. v. Jordan Panel Systems Corp. case illustrated the concept that: