Question 1

A buyer has an insurable interest in identified goods only if he or she has title to the goods.

Accepted Answer

A) True 
 B)False

Question 2

Motor Vehicles Service Company orders NoBounce-brand shock absorbers from Parts & Tools,Inc.,to be delivered by the seller.Before Parts & Tools' truck arrives with the goods,Motor Vehicles tells Parts & Tools it will not pay.The shock absorbers are destroyed in transit.The loss is suffered by

Accepted Answer

A) all of the parties' insurance companies pro rata. 
B) NoBounce's insurance company. 
C) Motor Vehicles to the extent of a deficiency in Parts & Tools' insurance coverage. 
D) Parts & Tools to the extent of a deficiency in Motor Vehicles' insurance coverage.

Question 3

Roadtrip County Fairs Corporation orders from Stuffed Animal Sales,Inc.,goods that are stored in a Toy Box Maxi-Storage warehouse.Roadtrip pays for the goods,delivery is via the transfer of a negotiable warehouse receipt,and Roadtrip moves the goods out of the warehouse.The risk of loss passes to the buyer when it

Accepted Answer

A) orders the goods. 
B) pays for the goods. 
C) receives the negotiable warehouse receipt. 
D) moves the goods out of the warehouse.

Question 4

Drill Makers,Inc.,and Edge Mine & Mill Supply Stores enter into a contract for a sale of mining drill bits.The contract indicates that the price includes transportation costs to a specific destination by including the term

Accepted Answer

A) C.I.F. 
B) delivery ex-ship. 
C) F.A.S. 
D) F.O.B.

Question 5

When a buyer breaches a contract,the risk of loss remains with the seller.

Accepted Answer

A) True 
 B)False

Question 6

When an agreement is ambiguous as go whether it is a shipment or a destination contract,courts will normally presume that it is a destination contract.

Accepted Answer

A) True 
 B)False

Question 7

Under a destination contract,the risk of loss passes to the buyer when the goods are duly delivered to the carrier.

Accepted Answer

A) True 
 B)False

Question 8

A seller has an insurable interest in goods as long as he or she retains title to the goods.

Accepted Answer

A) True 
 B)False

Question 9

In a sale or return,a buyer has an option to return the goods and undo the sale.

Accepted Answer

A) True 
 B)False

Question 10

Quaff n' Quench Café buys twenty-five crates of oranges from Reynaldo Produce,Inc.The parties agree to ship the oranges "F.O.B.Quaff n' Quench " via Swiftline Trucking Company.The oranges rot in transit.The loss is suffered by

Accepted Answer

A) Quaff n' Quench. 
B) Swiftline. 
C) Columbia. 
D) Reynaldo Produce.

Question 11

Any explicit understanding between the buyer and the seller determines when title passes.

Accepted Answer

A) True 
 B)False

Question 12

The right to cure is the right of a party who tenders nonconforming performance to correct his or her performance within the contract period.

Accepted Answer

A) True 
 B)False

Question 13

Effortless Workouts,Inc.,offers to sell a treadmill to Farouk and sends it to him on a trial basis.This is

Accepted Answer

A) a bailment. 
B) a delivery ex-ship. 
C) a sale on approval. 
D) a sale or return.

Question 14

A bill of lading is a receipt signed by a warehouse for goods stored in a warehouse.

Accepted Answer

A) True 
 B)False

Question 15

Fungible goods are goods that are different naturally,by agreement,or by trade usage.

Accepted Answer

A) True 
 B)False

Question 16

Title and risk of loss can pass to the buyer from the seller before the goods are identified to the contract.

Accepted Answer

A) True 
 B)False

Question 17

A contract between Pacific Import Company in Seattle and Atlantic Coast Retail Corporation in Baltimore does not expressly state which party bears the risk of loss but says only that Pacific Import is "to ship goods at the seller's expense." At what point does the risk of loss of the goods pass from the seller to the buyer

Accepted Answer

The answer of A contract between Pacific Import Company in...

Question 18

Organicos Café orders five gallons of PureMaid-brand transfat-free olive oil from Quico Cooking Supplies,Inc.Quico mistakenly ships soy oil,which Organicos keeps,despite the nonconformity.The oil is destroyed in a fire.The loss is suffered by

Accepted Answer

A) all of the parties as tenants in common in equal measure. 
B) PureMaid. 
C) Organicos Café. 
D) Quico Cooking Supplies.

Question 19

Brett boards her horse Charley at Dallas's Equestrian Stables.Brett sells the horse to Flem and tells Dallas,"I sold Charley to Flem." Dallas says,"Okay." That night,Charley is kicked in the head by another horse and dies.Who suffers the loss

Accepted Answer

The answer of Brett boards her horse Charley at Dallas's...

Question 20

When the risk of loss for goods passes from a seller to a buyer is generally determined by the contract between the parties.

Accepted Answer

A) True 
 B)False

Exam 21: Title,risk,and Insurable Interest

A buyer has an insurable interest in identified goods only if he or she has title to the goods.

Motor Vehicles Service Company orders NoBounce-brand shock absorbers from Parts & Tools,Inc.,to be delivered by the seller.Before Parts & Tools' truck arrives with the goods,Motor Vehicles tells Parts & Tools it will not pay.The shock absorbers are destroyed in transit.The loss is suffered by

Drill Makers,Inc.,and Edge Mine & Mill Supply Stores enter into a contract for a sale of mining drill bits.The contract indicates that the price includes transportation costs to a specific destination by including the term

When a buyer breaches a contract,the risk of loss remains with the seller.

When an agreement is ambiguous as go whether it is a shipment or a destination contract,courts will normally presume that it is a destination contract.

Under a destination contract,the risk of loss passes to the buyer when the goods are duly delivered to the carrier.

A seller has an insurable interest in goods as long as he or she retains title to the goods.

In a sale or return,a buyer has an option to return the goods and undo the sale.

Quaff n' Quench Café buys twenty-five crates of oranges from Reynaldo Produce,Inc.The parties agree to ship the oranges "F.O.B.Quaff n' Quench " via Swiftline Trucking Company.The oranges rot in transit.The loss is suffered by

Any explicit understanding between the buyer and the seller determines when title passes.

The right to cure is the right of a party who tenders nonconforming performance to correct his or her performance within the contract period.

Effortless Workouts,Inc.,offers to sell a treadmill to Farouk and sends it to him on a trial basis.This is

A bill of lading is a receipt signed by a warehouse for goods stored in a warehouse.

Fungible goods are goods that are different naturally,by agreement,or by trade usage.

Title and risk of loss can pass to the buyer from the seller before the goods are identified to the contract.

Organicos Café orders five gallons of PureMaid-brand transfat-free olive oil from Quico Cooking Supplies,Inc.Quico mistakenly ships soy oil,which Organicos keeps,despite the nonconformity.The oil is destroyed in a fire.The loss is suffered by

Brett boards her horse Charley at Dallas's Equestrian Stables.Brett sells the horse to Flem and tells Dallas,"I sold Charley to Flem." Dallas says,"Okay." That night,Charley is kicked in the head by another horse and dies.Who suffers the loss

When the risk of loss for goods passes from a seller to a buyer is generally determined by the contract between the parties.