Deck 24: Title and Risk of Loss

Question 1

If a buyer purchases goods on approval, the buyer's creditors cannot reach such goods until there is an approval.

Answer 1

True

Question 2

Goods are called identified goods when they have been selected as the goods called for by a sales contract.

Answer 2

True

Question 3

When goods are existing and identified to the contract and there is no document of title, the title to the goods passes to the buyer at the time of the transaction.

Answer 3

True

Question 4

In a sale on approval, the risk of loss passes to the buyer when the buyer takes possession of the goods.

Question 5

COD is a shipping term that requires the buyer to pay in order to gain physical possession of the goods.

Question 6

In a contract for FOB place of shipment, the risk of loss passes to the buyer at the same time as title does: when the goods are delivered to the carrier, that is, at the time and place of shipment.

Question 7

If a seller under a shipment contract sends nonconforming goods, the risk of loss in transit is on the buyer.

Question 8

Title to goods can be transferred without the actual delivery of the goods involved.

Question 9

When a person picks out a specific necktie and purchases it, the transaction involves identified goods.

Question 10

In a sale on approval, the buyer's approval must be demonstrated by express words.

Question 11

A sale or return is a completed sale with an option for the buyer to return the goods.

Question 12

Under a CF contract, the seller must get the goods to a carrier and buy an insurance policy in the buyer's name to cover the goods while in transit.

Question 13

A seller's insurable interest in goods always terminates with the passage of the title to the buyer.

Question 14

A bailee can pass good title to a good-faith purchaser, even when the sale was not authorized by the owner and the bailee has no title to the goods but is in the business of selling those particular types of goods.

Question 15

If a contract contains a delivery term of FOB place of shipment, the seller's obligation under the contract is to deliver the goods to a carrier for shipment.

Question 16

Heterogeneous goods are goods that, when mixed together, are indistinguishable.

Question 17

Title and risk of loss always pass to the buyer at the same time.

Question 18

If partial damage or total destruction occurs after the risk of loss has passed to a buyer, it is the buyer's loss.

Question 19

Future goods are involved when a store is temporarily out of an advertised item but tells you that the item can be ordered from the factory.

Question 20

When negotiable documents of title to goods are sold, the risk of loss and the title to the goods pass to the buyer when the documents are delivered to the buyer.

Question 21

When particular goods have been selected by either the buyer or the seller, or both, as being the goods called for by the sales contract, the goods are said to be

A) identified.
B) actualized.
C) realized.
D) materialized.

Question 22

__________ reserve auctions are those in which the goods must be sold regardless of whether the auctioneer is satisfied with the levels of the bids.

A) With
B) Without
C) Unqualified
D) Unrestricted

Question 23

In a __________, no sale takes place (meaning there is no transfer of title) until the buyer approves, or accepts, the goods.

A) conditional sale
B) contingency sale
C) sale or return
D) sale on approval

Question 24

Anne Robertson obtained telescopes from the See-Well Optics Company at dealer prices on the pretense of being a dealer in optical equipment. See-Well later determined that Robertson was not, had never been, and did not plan to be a dealer in optics. By the time these facts emerged, Robertson had succeeded in selling the telescopes to several individuals located throughout the country. These buyers had responded to advertisements placed by Robertson, who again had represented herself as a dealer in optical equipment. The buyers had purchased the telescopes in good faith at prices consistent with comparable equipment. See-Well located these buyers and demanded that the telescopes be returned as property obtained through fraud. Do the buyers of these telescopes have to return their purchases?

Question 25

Goods that are not yet in existence or are not yet owned by the seller are__________ goods.

A) fraudulent
B) nonexistent
C) future
D) contingent

Question 26

The expense and the risk of return in a sale or return situation is on the:

A) seller.
B) buyer.
C) lienholder.
D) secured creditor.

Question 27

When goods are sold at an auction in separate lots, the title to each lot passes:

A) when the winning bidder tenders payment for the lot.
B) when the lot is received by the winning bidder.
C) only when all lots have been sold.
D) when the auctioneer announces that the lot in question has been sold to the bidder.

Question 28

In a sale on approval, the buyer's approval may be shown by:

A) express words.
B) conduct.
C) lapse of time.
D) all of the above.

Question 29

__________ goods are goods that, when mixed together, are indistinguishable.

A) Tangible
B) Intangible
C) Heterogeneous
D) Fungible

Question 30

__________reserve auctions are those that give the auctioneer the right to withdraw the goods from the sale process if the bids are not high enough.

A) Qualified
B) Restricted
C) With
D) Without

Question 31

If a contract contains a delivery term of __________, the seller's responsibility is to get the goods to the buyer.

A) FOB place of shipment
B) FOB place of destination
C) CIF place of shipment
D) CIF place of destination

Question 32

A consignment sale is treated as a sale or return under UCC Article 2, and the dealer-consignee has full authority to sell the goods for the consignor and can pass title to those goods.

Question 33

In a consignment, the dealer-consignee is often referred to as a(n):

A) remainder.
B) factor.
C) quotient.
D) exponent.

Question 34

"Without reserve" auctions give the auctioneer the right to withdraw the goods from the sale process if the bids are not high enough.

Question 35

A consignment sale is treated as a(n) __________ under UCC Article 2, and the dealer-consignee has full authority to sell the goods for the consignor and can pass title to the goods.

A) ordinary sale
B) final sale
C) sale on approval
D) sale or return
Rrrr

Question 36

The Anderson Balloon Company of Detroit entered into a contract with Johnson's Novelty Shop of Des Moines to sell 1,000 balloons to Johnson's. The contract provided that the balloons were to be manufactured in accordance with Johnson's specifications. The contract further provided that the balloons would be shipped to Johnson's. The balloons were damaged while in transit from Detroit to Des Moines. Johnson's has sued Anderson for damages. Will Johnson's win?

Question 37

Bob Corporation entered into a contract to sell parts to Zeck. The contract provided that the goods would be shipped "FOB Bob's warehouse." Bob shipped parts to Zeck that were stolen from the carrier. When Zeck checked the invoice, Zeck discovered that Bob had sent Model #20B instead of Model #20A, which the contract required. Whose loss? Why?

Question 38

In a sale or return transaction, until the actual return of the goods is made, title and risk of loss remain with the buyer.

Question 39

Most courts hold that when a customer takes an item from the shelf in a self-service store, there is:

A) no sale.
B) a sale.
C) a contract to sell.
D) a conditional sale.

Question 40

A __________ is a completed sale with an option for the buyer to return the goods.

A) conditional sale
B) contingency sale
C) sale or return
D) sale on approval