Deck 24: Title and Risk of Loss

Question 1

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

Answer 1

False

Question 2

A document of title is not sufficient for a creditor to take an interest in goods.

Answer 2

False

Question 3

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

Answer 3

True

Question 4

Supply chain management refers to the management issues of risk and title as goods flow through commerce.

Question 5

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

Question 6

In a non-shipment contract risk of loss passes to the buyer when the merchant seller makes the goods available to said buyer.

Question 7

In an FOB shipment contract title to the goods pass to the buyer when goods are delivered to the carrier.

Question 8

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

Question 9

Fungible goods are always homogeneous.

Question 10

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

Question 11

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

Question 12

Someone who finds and resells stolen property passes on a good title to a good faith purchaser.

Question 13

Once goods in a contract have been identified the buyer holds an insurable interest in them.

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

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 16

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

Question 17

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

Question 18

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 19

A buyer with a voidable title cannot pass on valid title to a subsequent good faith purchaser.

Question 20

Future goods can be identified before they are manufactured.

Question 21

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

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

Question 22

If an owner has acted in a way that misleads others,the owner may be __________from asserting ownership.

A) estopped
B) voided
C) breached
D) identified

Question 23

Title passes to the buyer at delivery:

A) in all situations
B) when goods are shipped FOB place of destination
C) when goods are shipped FOB shipment
D) never

Question 24

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

Question 25

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 26

A consignment sale is treated as a sale or return under UCC Article 2.

Question 27

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 28

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

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

Question 29

__________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 30

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 31

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

Question 32

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

Question 33

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 34

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

Question 35

If shipped goods are damaged or destroyed after risk of loss passes:

A) the contract is avoided
B) the seller has breached the contract
C) the buyer has the option to accept or not accept the goods
D) it is the buyer's loss

Question 36

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

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

Question 37

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 38

In a self-service store a sale cannot occur until the goods are paid for.

Question 39

In the case of a nonshipment contract,risk of loss passes to the buyer upon actual receipt of goods:

A) only if the seller is a merchant
B) only if the seller is a nonmerchant
C) only if the buyer has already paid for them
D) in all nonshipment contracts

Question 40

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

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

Question 41

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 42

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 43

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 44

__________ 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 45

Anderson Clock Company is in the business of selling and repairing clocks.Jay purchased a grandfather clock from them.Laurie had left the clock at Anderson's for a cleaning and calibration.When Laurie found out the clock had been sold,she contacted Jay and demanded he return it.Must Jay comply with Laurie's demand? What other options does she have?