Deck 16: Transfer of Title

Question 1

Match each of the numbered definitions with the correct term in the following list. Write the letter of your choice in the answer column.
a. conditional sales contract
b. contract for labor and materials
c. contract to sell
d. insolvency
e. reserve amount
f. sale on approval
g. sale or return
h. title
i. statute of limitations
j. stoppage in transit
Ownership of goods.

Answer 1

Having "ownership of goods" means that you hold the title of ownership over certain goods and you have the right to possess them.
Having a "title over something" can have multiple meanings. "Title" usually refers to having rights of ownership over something. However, it is important to make a distinction between the right of ownership and the right of possession.
For example Mr. A rents a video from B Movie Rentals for a week. Mr. A has the right of possession over the video until the end of the rental agreement, but during the duration of the agreement, B Movie Rentals still retains ownership over the video.
"Ownership of goods" refers to a specific kind of title over something; hence , the correct answer is H.

Question 2

Match each of the numbered definitions with the correct term in the following list. Write the letter of your choice in the answer column.
a. conditional sales contract
b. contract for labor and materials
c. contract to sell
d. insolvency
e. reserve amount
f. sale on approval
g. sale or return
h. title
i. statute of limitations
j. stoppage in transit
A contract for the sale of goods of special design, construction, or manufacture.

Answer 2

A sales contract for items of a certain design, build or manufacture generally refers to a specific kind of contract called a "contract for labor and materials". This type of contract does not always need to be in writing and can be annulled prior to the beginning of the exchange between the seller and buyer.
Thus, the correct answer is b.

Question 3

Match each of the numbered definitions with the correct term in the following list. Write the letter of your choice in the answer column.
a. conditional sales contract
b. contract for labor and materials
c. contract to sell
d. insolvency
e. reserve amount
f. sale on approval
g. sale or return
h. title
i. statute of limitations
j. stoppage in transit
A contract for sale that gives the buyer the title to goods and the opportunity of returning them to the seller at a later time.

Answer 3

The word "title" generally refers to the right to ownership and possession of certain goods. In order to retain goodwill with the buyer, merchants will often allow the buyer to return the purchased goods for any number of reasons within a reasonable time limit after the title over the purchased has passed from seller to buyer. This type of sales agreement is referred to as a sale or return agreement. It is important to note that with this type of agreement, the purchaser has full responsibility for any damage done to the goods while they remain in his/her possession.
Thus, the correct answer is ' g'.

Question 4

Match each of the numbered definitions with the correct term in the following list. Write the letter of your choice in the answer column.
a. conditional sales contract
b. contract for labor and materials
c. contract to sell
d. insolvency
e. reserve amount
f. sale on approval
g. sale or return
h. title
i. statute of limitations
j. stoppage in transit
A sales agreement whereby the seller retains title and the buyer can return the goods.

Question 5

Match each of the numbered definitions with the correct term in the following list. Write the letter of your choice in the answer column.
a. conditional sales contract
b. contract for labor and materials
c. contract to sell
d. insolvency
e. reserve amount
f. sale on approval
g. sale or return
h. title
i. statute of limitations
j. stoppage in transit
An agreement for the sale of future goods.

Question 6

Match each of the numbered definitions with the correct term in the following list. Write the letter of your choice in the answer column.
a. conditional sales contract
b. contract for labor and materials
c. contract to sell
d. insolvency
e. reserve amount
f. sale on approval
g. sale or return
h. title
i. statute of limitations
j. stoppage in transit
An amount used in auction sales that specifies the lowest acceptable bid.

Question 7

Match each of the numbered definitions with the correct term in the following list. Write the letter of your choice in the answer column.
a. conditional sales contract
b. contract for labor and materials
c. contract to sell
d. insolvency
e. reserve amount
f. sale on approval
g. sale or return
h. title
i. statute of limitations
j. stoppage in transit
A sales agreement whereby the seller retains title until the buyer pays for the goods.

Question 8

Match each of the numbered definitions with the correct term in the following list. Write the letter of your choice in the answer column.
a. conditional sales contract
b. contract for labor and materials
c. contract to sell
d. insolvency
e. reserve amount
f. sale on approval
g. sale or return
h. title
i. statute of limitations
j. stoppage in transit
A time limit after which legal remedies are no longer possible.

Question 9

Match each of the numbered definitions with the correct term in the following list. Write the letter of your choice in the answer column.
a. conditional sales contract
b. contract for labor and materials
c. contract to sell
d. insolvency
e. reserve amount
f. sale on approval
g. sale or return
h. title
i. statute of limitations
j. stoppage in transit
A state in which a person is unable to pay his or her debts.

Question 10

Match each of the numbered definitions with the correct term in the following list. Write the letter of your choice in the answer column.
a. conditional sales contract
b. contract for labor and materials
c. contract to sell
d. insolvency
e. reserve amount
f. sale on approval
g. sale or return
h. title
i. statute of limitations
j. stoppage in transit
The right of an unpaid seller to stop goods in transit and order the carrier to hold them for the seller.

Question 11

Indicate whether each of the following statements is true or false by writing T or F in the answer column.
Contracts for sale can be oral or written, express or implied.

Question 12

Indicate whether each of the following statements is true or false by writing T or F in the answer column.
A contract for sale differs from a contract to sell primarily in the point at which title passes.

Question 13

Indicate whether each of the following statements is true or false by writing T or F in the answer column.
In most cases of the sale of future goods, title remains with the seller until the goods are in a deliverable state.

Question 14

Indicate whether each of the following statements is true or false by writing T or F in the answer column.
Goods that physically exist and are owned by the seller at the time of sale are considered existing goods.

Question 15

Indicate whether each of the following statements is true or false by writing T or F in the answer column.
A contract for the sale of various, unrelated articles is considered a divisible contract.

Question 16

Indicate whether each of the following statements is true or false by writing T or F in the answer column.
A contract for labor and materials must always be in writing, regardless of the amount of money involved.

Question 17

Indicate whether each of the following statements is true or false by writing T or F in the answer column.
When goods are sold on approval, the buyer has title during the trial period.

Question 18

Indicate whether each of the following statements is true or false by writing T or F in the answer column.
The buyer of goods sold on approval can indicate his or her consent to keep the goods by retaining them for longer than the agreed time or a reasonable time.

Question 19

Indicate whether each of the following statements is true or false by writing T or F in the answer column.
A buyer whose goods are not delivered within a reasonable time has the right to "cover"-that is, to purchase substitute goods from another seller.

Question 20

Indicate whether each of the following statements is true or false by writing T or F in the answer column.
The title to goods sold with right of return passes to the buyer at the time of sale.

Question 21

Indicate whether each of the following statements is true or false by writing T or F in the answer column.
A contract for special manufacture, construction, or design of goods is considered a contract for labor and materials.

Question 22

Indicate whether each of the following statements is true or false by writing T or F in the answer column.
The notations in an auctioneer's book of sales of more than $500 satisfies the requirements of the Uniform Commercial Code that such contracts be in writing to be enforceable.

Question 23

Indicate whether each of the following statements is true or false by writing T or F in the answer column.
A common carrier is a firm in the business of transporting goods or persons-by rail, truck, plane, or any other mode of transportation.

Question 24

Indicate whether each of the following statements is true or false by writing T or F in the answer column.
Title to goods shipped FOB shipping point remains with the seller until delivery is made to the buyer.

Question 25

Indicate whether each of the following statements is true or false by writing T or F in the answer column.
The buyer of goods that have been shipped FOB destination must bear the loss if the goods are lost or damaged in transit.

Question 26

Answer the following question and discuss them in class.
How can a contract for future goods provide price flexibility for the seller and, at the same time, provide predictability to the buyer?
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Question 27

Answer the following question and discuss them in class.
Why is it important to determine when title passes?
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Question 28

Answer the following question and discuss them in class.
A contract for sale with the right of return gives the buyer both title to the goods and the opportunity to return the goods to the seller at a later time. What are the benefits to the seller of this type of sales transaction?
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Question 29

Answer the following question and discuss them in class.
When a contract provides for the sale of goods subject to the buyer's approval, the transaction is a sale on approval. What are the benefits to the buyer of this type of sales transaction?
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Question 30

Answer the following question and discuss them in class.
Discuss advantages and disadvantages to both sellers and buyers of shipping FOB destination and FOB shipping point.
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Question 31

Answer the following question and discuss them in class.
Explain both sellers' and buyers' remedies for breach of contract.
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Question 32

Answer the following questions, which require you to think critically about the legal principles that you learned in this chapter.
Contract for Labor and Materials A contract for labor and materials need not be in writing, even if it is over $500. Does the buyer of the labor and materials enjoy the same level of legal protection as if the contract were in writing?
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Question 33

Answer the following questions, which require you to think critically about the legal principles that you learned in this chapter.
Internet Auction Compare and contrast online auctions with actual live auctions.
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Question 34

Answer the following questions, which require you to think critically about the legal principles that you learned in this chapter.
Sellers' Remedies How might a seller avoid pitfalls in selling to unknown buyers?
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Question 35

Answer the following questions, which require you to think critically about the legal principles that you learned in this chapter.
Buyers' Remedies How might a buyer avoid pitfalls in buying from unknown sellers?
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Question 36

Answer the following questions, which require you to think critically about the legal principles that you learned in this chapter.
A Question of Ethics Is it fair for a buyer to ask a seller to hold merchandise while the buyer shops for a better price?
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Question 37

Study each of the following cases. Answer the question that follow by writing Yes or No in the answer column.
Contract for Labor and Materials Rios furnished Stern, a carpenter, with a set of sketches for a cabinet she wanted built. They orally agreed on a price of $1,000, the type of wood to be used, and the delivery date. Before Stern had begun work or obtained the necessary materials, Rios canceled the agreement, saying that she planned to move to another apartment and would not need the cabinet.
a. Was this a contract for sale?
b. Was this a contract for labor and materials?
c. Was this a contract to sell?
d. Will Stern be successful in a suit for damages?

Question 38

Study each of the following cases. Answer the question that follow by writing Yes or No in the answer column.
Divisible or Entire Contracts Miro, the owner of a supermarket, contracted with Market Supply Company for one complete checkout counter, including a cash register. After the counter was installed, but before the cash register was delivered, Market Supply Company demanded payment for the checkout counter. Miro refused to pay, claiming that he had contracted for a complete checkout counter, including the cash register, and he would pay when the cash register was installed.
a. Was this a sales contract?
b. Was this a divisible contract?
c. Was this an entire contract?
d. Does Market Supply have grounds for suit to collect for the portion of the order that was delivered?

Question 39

Study each of the cases below. Answer the questions that follow by writing Yes or No in the answer column.
Contract for Labor and Materials Galen, a purchasing agent for Ziff Construction Company, agreed orally with Houk Lumber to purchase 800 preassembled wooden windows. The agreed price was $20,000. When Ziff Construction lost its financial backing, it had to cancel its plans for the houses it had planned to build. Houk sued to collect the purchase price.
a. Was this a contract for sale??______
b. Was this a contract for labor and materials??______
c. Did the contract meet the Uniform Commercial Code requirement of writing??______
d. Is it likely that Houk would win the lawsuit??______

Question 40

Study each of the following cases. Answer the question that follow by writing Yes or No in the answer column.
Sales Contracts Eamons offered to sell his sailboat, complete with boat trailer, to Fitzgerald for $12,000. Fitzgerald agreed to the offer, gave Eamons a deposit of $500, and said that he would pay the balance when he came back with his car to pick up the boat and trailer. While Fitzgerald was away, the boat caught fire and was destroyed.
a. Was this a contract for sale?
b. Did the parties intend title to pass when Fitzgerald picked up the boat?
c. Must Eamons bear the loss?
d. Was this a contract to sell?

Question 41

Study each of the following cases carefully. Briefly state the principle of law and your decision.
Substitute Goods Gagne made a good living selling snacks, hamburgers, and refreshments at athletic events. He placed a written order with Pacific Container Company for 4,000 Styrofoam containers to be used to package hamburgers. Gagne requested that delivery be made three days before the last big football game of the season, and Pacific promised to meet the date. Two days before the game, the order still had not been delivered. In desperation, Gagne ordered 4,000 similar containers from another firm. When his order from Pacific finally arrived, Gagne refused to accept delivery or to pay for it. Pacific Container sued to collect the purchase price. Is Pacific likely to collect?
Principle of Law:
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Decision:
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Question 42

Study each of the following cases carefully. Briefly state the principle of law and your decision.
Auction Sales Bundeson, a farmer, attended an auction of used farm equipment and successfully bid $1,600 for a tractor. When he returned home, he learned that a real estate developer was eager to buy his farm and build a shopping center on the property. Bundeson agreed to sell his farm, but then realized that he would not need the tractor he had just purchased and that it would be to his advantage to avoid the sale. He notified the auctioneer that he would not go through with the sale because the Uniform Commercial Code required a written contract for personal property sales of $500 or more. Will Bundeson succeed in avoiding the contract?
Principle of Law:
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Decision:
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Question 43

Study each of the following cases carefully. Briefly state the principle of law and your decision.
Contract for Services Gates entered into a contract with Mennonite Deaconess Home Hospital for the installation of a new, "one-ply roofing system." The work was to be done by an installer chosen by Mennonite but approved by Gates. When the work was nearly complete, but before Gates had approved the work, the hospital paid the installer 90 percent of the balance due. After inspection, Gates did not approve, and in addition, the roof leaked and had to be replaced at the hospital's expense. The hospital claimed that Gates was responsible for the quality of the work. Gates claimed that he could not be held accountable because service contracts are not covered by the Uniform Commercial Code. Did the contract involve goods or services, and will Gates be held responsible? [ Mennonite Deaconess Home Hospital Inc. v. Gates Engineering Co., 363 N.W.2d 155 (Nebraska)]
Principle of Law:
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Decision:
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Question 44

Complete the following activities. Share your findings with the class.
Working in Teams In teams of three or four, interview owners or managers of small businesses to determine what kinds of contracts they routinely put into writing.
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Question 45

Complete the following activities. Share your findings with the class.
Using Technology Using the Internet and search engines, investigate online auctions to determine the operating rules of the various sites. ______________________________________________________
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