Question 1

Good Food Corporation buys from Home Farms,Inc.,a rice crop that Home Farms plans to plant and harvest during the next growing season.Good Food plans to sell the rice to Interstate Grocery Stores.After the rice is planted,but before it is harvested,an insurable interest in the rice ex?ists in

Accepted Answer

A) Good Food and Home Farms,but not Interstate Grocery. 
B) Good Food,Home Farms,and Interstate Grocery. 
C) Good Food only. 
D) Home Farms only.

Question 2

Summit Sales Corporation orders goods from OverStock Company.Summit plans to market the goods to consumers generally.OverStock identifies the goods.Before they are shipped to Summit,an insurable interest in the goods exists in

Accepted Answer

A) Summit and OverStock,but not consumers generally. 
B) Summit,OverStock,and consumers generally. 
C) Summit only. 
D) OverStock only.

Question 3

Identification,risk of loss,and insurable interest are all concepts that are involved in determining the rights and liabilities of parties to a contract.

Accepted Answer

A) True 
 B)False

Question 4

Big Red Drinks,Inc.contracts to buy two tons of cranberries from Super Fruits,Inc.The contract states that Super Fruits is required to ship the cranberries to Big Red Drinks by Speedy Wind Air Freight.The contract is

Accepted Answer

A) a bill of lading. 
B) a destination contract. 
C) a shipment contract. 
D) a warehouse receipt.

Question 5

If a lessor is a merchant,the risk of loss passes to a lessee when the lessee takes physical possession of the goods.

Accepted Answer

A) True 
 B)False

Question 6

Twyla buys an HD TV from Viewpoint Electronics store,which agrees to keep the TV for Twyla until she picks it up.Before she gets the TV,a fire destroys the store and the set.The loss is suffered by

Accepted Answer

A) neither Twyla nor Viewpoint 
B) Twyla and Viewpoint. 
C) Twyla only. 
D) Viewpoint only.

Question 7

If a seller is not a merchant,and the goods are not to be moved,the risk of loss passes to a buyer on tender of delivery.

Accepted Answer

A) True 
 B)False

Question 8

Southern Distribution,Inc.,signs a receipt for goods that will also serve as a contract for the goods' transport. This is

Accepted Answer

A) a bill of lading. 
B) a destination contract. 
C) a shipment contract. 
D) a warehouse receipt.

Question 9

Grace purchases three tons of fine merino wool on behalf of Woolen Creations.Woolen Creations wants the wool to remain in the warehouse where it is being stored until it is needed.Grace makes an offer for the wool on Monday.The offer is accepted on Tuesday.The warehouser gives Woolen Creations a warehouse receipt on Wednesday.Woolen Creations picks up the wool from the warehouse three months after the sale.Title for the wool passed to Woolen creations

Accepted Answer

A) on Monday. 
B) on Tuesday. 
C) on Wednesday. 
D) three months after the sale.

Question 10

When a lessee sells leased equipment to a third party,the lessor cannot,under any circumstances,recover the equipment from the buyer.

Accepted Answer

A) True 
 B)False

Question 11

Fungible goods are goods that are alike naturally or by agreement or trade usage.

Accepted Answer

A) True 
 B)False

Question 12

A buyer and a seller cannot normally have an insurable interest in iden?tical goods at the same time.

Accepted Answer

A) True 
 B)False

Question 13

Jason contracts with Golf Carts Unlimited,Inc.to buy five golf carts.The contract lists the five carts as GC001,GC002,GC003,GC004,GC005.Identification

Accepted Answer

A) requires that Jason verify his identity to take possession of the carts. 
B) has taken place. 
C) cannot take place until the contract is reviewed by a court. 
D) will take place only when Jason pays for the golf carts.

Question 14

Home Products Store buys furniture from Relax-o Furniture,Inc.The parties agree that the furniture will be shipped "F.O.B.Relax-o's ware?house" to Home Products via Swift Shipping Corporation.The furniture is lost in transit.The loss is suffered by

Accepted Answer

A) Home Products and Relax-o Furniture,but not Swift Shipping. 
B) Home Products,Relax-o Furniture,and Swift Shipping. 
C) Home Products only. 
D) Relax-o Furniture only.

Question 15

Regal Recreation Sales,Inc.,allows Sandy to take a Regal boat for a "test run." Sandy tries the boat for a few hours,returns,and buys it.This is

Accepted Answer

A) a bailment. 
B) a consignment. 
C) a sale on approval. 
D) a sale or return.

Question 16

In contracts involving a sale of unborn animals to be born within twelve months,identification takes place when the animals are born.

Accepted Answer

A) True 
 B)False

Question 17

Kip,a representative for Lite-Weight Shipping Company,delivers a bill of lading to Meg,the owner of Capacity Storage Warehouse.A bill of lading is

Accepted Answer

A) an invoice for payment for loading and carting. 
B) an order to ship goods by carrier to a certain destination. 
C) a receipt for goods signed by a carrier. 
D) a receipt issued by a warehouser for goods in a warehouse.

Question 18

Fay pays $800 for a new iPad to Global Goods,Inc.Global holds the iPad until Fay picks it up.Global is

Accepted Answer

A) a bailee. 
B) a consignee. 
C) a lessee. 
D) a seller.

Question 19

Future goods are goods that are not both existing and identified to the contract.

Accepted Answer

A) True 
 B)False

Question 20

If a sale of goods is conditional on the buyer's resale of the purchased goods,then the transaction is a sale or return.

Accepted Answer

A) True 
 B)False

Exam 19: Title and Risk of Loss

Good Food Corporation buys from Home Farms,Inc.,a rice crop that Home Farms plans to plant and harvest during the next growing season.Good Food plans to sell the rice to Interstate Grocery Stores.After the rice is planted,but before it is harvested,an insurable interest in the rice ex?ists in

Summit Sales Corporation orders goods from OverStock Company.Summit plans to market the goods to consumers generally.OverStock identifies the goods.Before they are shipped to Summit,an insurable interest in the goods exists in

Identification,risk of loss,and insurable interest are all concepts that are involved in determining the rights and liabilities of parties to a contract.

Big Red Drinks,Inc.contracts to buy two tons of cranberries from Super Fruits,Inc.The contract states that Super Fruits is required to ship the cranberries to Big Red Drinks by Speedy Wind Air Freight.The contract is

If a lessor is a merchant,the risk of loss passes to a lessee when the lessee takes physical possession of the goods.

Twyla buys an HD TV from Viewpoint Electronics store,which agrees to keep the TV for Twyla until she picks it up.Before she gets the TV,a fire destroys the store and the set.The loss is suffered by

If a seller is not a merchant,and the goods are not to be moved,the risk of loss passes to a buyer on tender of delivery.

Southern Distribution,Inc.,signs a receipt for goods that will also serve as a contract for the goods' transport. This is

When a lessee sells leased equipment to a third party,the lessor cannot,under any circumstances,recover the equipment from the buyer.

Fungible goods are goods that are alike naturally or by agreement or trade usage.

A buyer and a seller cannot normally have an insurable interest in iden?tical goods at the same time.

Jason contracts with Golf Carts Unlimited,Inc.to buy five golf carts.The contract lists the five carts as GC001,GC002,GC003,GC004,GC005.Identification

Home Products Store buys furniture from Relax-o Furniture,Inc.The parties agree that the furniture will be shipped "F.O.B.Relax-o's ware?house" to Home Products via Swift Shipping Corporation.The furniture is lost in transit.The loss is suffered by

Regal Recreation Sales,Inc.,allows Sandy to take a Regal boat for a "test run." Sandy tries the boat for a few hours,returns,and buys it.This is

In contracts involving a sale of unborn animals to be born within twelve months,identification takes place when the animals are born.

Kip,a representative for Lite-Weight Shipping Company,delivers a bill of lading to Meg,the owner of Capacity Storage Warehouse.A bill of lading is

Fay pays $800 for a new iPad to Global Goods,Inc.Global holds the iPad until Fay picks it up.Global is

Future goods are goods that are not both existing and identified to the contract.

If a sale of goods is conditional on the buyer's resale of the purchased goods,then the transaction is a sale or return.