Question 1

When a document of title is required,title passes to a buyer when and where the document is delivered.

Accepted Answer

A) True 
 B)False

Question 2

If a seller is not a merchant,the seller holds the goods,and the buyer is to pick them up,the risk of loss passes to the buyer on tender of delivery.

Accepted Answer

A) True 
 B)False

Question 3

If a contract involves a sale of an unborn animal to be born within twelve months,identification takes place when the animal is conceived.

Accepted Answer

A) True 
 B)False

Question 4

Angie buys a lamp from Brite Lites Store,which agrees to keep it for Angie until she picks it up.Before Angie gets the lamp,a fire destroys the store and the lamp.The loss is suffered by

Accepted Answer

A) Angie and Brite Lites. 
B) Angie only. 
C) Brite Lites only. 
D) neither Angie nor Brite Lites

Question 5

If a seller is not a merchant,and the goods are not to be moved,the risk of loss remains with the seller until the buyer sells or otherwise disposes of the goods.

Accepted Answer

A) True 
 B)False

Question 6

Deep Storage Company holds goods for EZ Sales Corporation,which con?tracts to sell them to Fabric Stores,Inc.The goods are to be delivered without being moved and are represented by a negotiable bill of lading.The risk of loss passes to Fabric Stores

Accepted Answer

A) if Deep refuses to honor the bill of lading. 
B) if EZ gives the bill of lading to Deep. 
C) if the goods are lost due to an "act of God." 
D) when Fabric Stores receives the bill of lading.

Question 7

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 exists 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 8

When an owner holds fungible goods as a tenant in common,the owner can pass title to the goods to a buyer only by physi?cally sepa?rating the goods.

Accepted Answer

A) True 
 B)False

Question 9

When no document of title is required and delivery is made without moving the goods,title to identified goods passes when a contract for their sale is made.

Accepted Answer

A) True 
 B)False

Question 10

A warehousing company that normally issues documents of title for goods it receives is a bailee.

Accepted Answer

A) True 
 B)False

Question 11

A contract between Fresh Fruit Corporation and Green Grocer,Inc. ,re?quires Fresh Fruit to deliver goods to Green Grocer's place of business.This is

Accepted Answer

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

Question 12

Dazzle Products Corporation contracts with Excel Trucking Company to take goods to Flight Airlines,Inc. ,with Flight to transport the goods to a Geo Storage Company warehouse.Excel,Flight,and Geo each acknowledge possession of the goods by a document of title.Excel,Flight,and Geo are

Accepted Answer

A) bailees. 
B) consignees. 
C) lessees. 
D) sellers.

Question 13

Timekeep Watches,Inc. ,ships an assortment of timepieces to Unique Jewelers,Inc. ,which agrees to pay for items that are not re?turned within six months.This is

Accepted Answer

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

Question 14

Global Produce Corporation in Hawaii sells fifty tons of pineapple to Ideal Groceries,Inc. ,in California,F.O.B.Hawaii.The cost of transport?ing the produce to California will be paid by

Accepted Answer

A) California. 
B) Global Produce 
C) Ideal Groceries. 
D) Hawaii.

Question 15

Under a shipment contract,the risk of loss passes to the buyer when the seller places conforming goods in the possession of the carrier.

Accepted Answer

A) True 
 B)False

Question 16

Tone Style Stores orders leather jackets from Universa Clothing Company.Universa mistakenly ships denim jackets,which Tone rejects and returns via Valu Transport,Inc.During the return,the jackets are lost.The loss is suffered by

Accepted Answer

A) Tone only. 
B) Tone and Universa,but not Valu. 
C) Tone,Universa,and Valu. 
D) Universa only.

Question 17

Dirk steals Effie's necklace and sells it to Fiona.Effie can recover the neck?lace from Fiona

Accepted Answer

A) only if Fiona did not know that the necklace was stolen. 
B) only if Fiona gave legally sufficient consideration for the necklace. 
C) only if Fiona knew that the necklace was stolen. 
D) under any circumstances.

Question 18

If a seller is a merchant,and the goods are not to be moved,the risk of loss passes to a buyer when the buyer takes physical possession of the goods.

Accepted Answer

A) True 
 B)False

Question 19

Mica buys 1,000 bales of hay from Nuevo Farms.The parties agree that the hay will be transported F.A.S.via Overland Transport,Inc.Nuevo Farms' truck carrying the hay explodes before reaching Overland Transport.The loss is suffered by

Accepted Answer

A) Mica and Nuevo Farms,but not Overland Transport. 
B) Mica,Nuevo Farms,and Overland Transport. 
C) Mica only. 
D) Nuevo Farms only.

Question 20

Rite Hardware Store orders 100 cases of galvanized nails from Safe-T Fastener Company's 1,000-case lot.Safe-T separates 100 cases from the lot.Title and risk of loss

Accepted Answer

A) remain with Safe-T until Rite acknowledges tender of delivery. 
B) remain with Safe-T until Rite accepts 100 cases. 
C) shift to Rite after it accepts the nails and inspects them for defects. 
D) shift to Rite when Safe-T separates the cases.

Exam 15: Title and Risk of Loss

When a document of title is required,title passes to a buyer when and where the document is delivered.

If a seller is not a merchant,the seller holds the goods,and the buyer is to pick them up,the risk of loss passes to the buyer on tender of delivery.

If a contract involves a sale of an unborn animal to be born within twelve months,identification takes place when the animal is conceived.

Angie buys a lamp from Brite Lites Store,which agrees to keep it for Angie until she picks it up.Before Angie gets the lamp,a fire destroys the store and the lamp.The loss is suffered by

If a seller is not a merchant,and the goods are not to be moved,the risk of loss remains with the seller until the buyer sells or otherwise disposes of the goods.

Deep Storage Company holds goods for EZ Sales Corporation,which con?tracts to sell them to Fabric Stores,Inc.The goods are to be delivered without being moved and are represented by a negotiable bill of lading.The risk of loss passes to Fabric Stores

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 exists in

When an owner holds fungible goods as a tenant in common,the owner can pass title to the goods to a buyer only by physi?cally sepa?rating the goods.

When no document of title is required and delivery is made without moving the goods,title to identified goods passes when a contract for their sale is made.

A warehousing company that normally issues documents of title for goods it receives is a bailee.

A contract between Fresh Fruit Corporation and Green Grocer,Inc. ,re?quires Fresh Fruit to deliver goods to Green Grocer's place of business.This is

Dazzle Products Corporation contracts with Excel Trucking Company to take goods to Flight Airlines,Inc. ,with Flight to transport the goods to a Geo Storage Company warehouse.Excel,Flight,and Geo each acknowledge possession of the goods by a document of title.Excel,Flight,and Geo are

Timekeep Watches,Inc. ,ships an assortment of timepieces to Unique Jewelers,Inc. ,which agrees to pay for items that are not re?turned within six months.This is

Global Produce Corporation in Hawaii sells fifty tons of pineapple to Ideal Groceries,Inc. ,in California,F.O.B.Hawaii.The cost of transport?ing the produce to California will be paid by

Under a shipment contract,the risk of loss passes to the buyer when the seller places conforming goods in the possession of the carrier.

Tone Style Stores orders leather jackets from Universa Clothing Company.Universa mistakenly ships denim jackets,which Tone rejects and returns via Valu Transport,Inc.During the return,the jackets are lost.The loss is suffered by

Dirk steals Effie's necklace and sells it to Fiona.Effie can recover the neck?lace from Fiona

If a seller is a merchant,and the goods are not to be moved,the risk of loss passes to a buyer when the buyer takes physical possession of the goods.

Mica buys 1,000 bales of hay from Nuevo Farms.The parties agree that the hay will be transported F.A.S.via Overland Transport,Inc.Nuevo Farms' truck carrying the hay explodes before reaching Overland Transport.The loss is suffered by

Rite Hardware Store orders 100 cases of galvanized nails from Safe-T Fastener Company's 1,000-case lot.Safe-T separates 100 cases from the lot.Title and risk of loss