Question 1

In January,Eddie contracts to sell 100 bushels of soybeans that fall.This contract:

Accepted Answer

The contract can be valid, but title cannot pass until the soybeans actually exist. This is known as an executory contract. Eddie can still forward contract, or contract to sell crops he has not yet planted, but he must own or control the land where the crop will be grown, and the contract must also clearly define the terms of payment, delivery, and quantity.

Question 2

Roger purchased a tennis racquet from Rafael.Roger can prove he is a BFP by showing only that he gave value and acted in good faith.

Accepted Answer

A Bona Fide Purchaser (BFP) is someone who purchases property from someone who does not have the right to sell it. To prove that he is a BFP, Roger needs to show that he gave value for the racquet and he did so in good faith, meaning he had no reason to suspect that Rafael did not have the right to sell the racquet. This will be sufficient to establish his status as a BFP.

Question 3

Both the buyer and seller may have an insurable interest in the same goods at the same time.

Accepted Answer

It is possible for both the buyer and seller to have an insurable interest in the same goods at the same time. For example, the buyer may have an insurable interest in the goods while they are in transit, while the seller may have an insurable interest in the goods while they are in their possession before they are shipped.

Question 4

Regardless of the language of the contract,title to goods passes to the buyer at the time and place at which the seller physically delivers the goods.

Accepted Answer

Title to goods can pass to the buyer at different times based on the terms of the contract, not necessarily at the time and place of physical delivery. The contract can specify different conditions for the transfer of title.

Question 5

Arco sells to Melvin 1,000 computers that are stored in Arco's warehouse.Arco gives Melvin the ownership documents and Melvin will pick up the computers at the warehouse.Title has passed to Melvin.

Accepted Answer

Arco has transferred ownership of the computers to Melvin and given him the ownership documents, indicating that title has passed to Melvin.

Question 6

Under the UCC,the party who has title to the goods always has the risk of loss.

Accepted Answer

Under the UCC, the party who has the risk of loss is determined by the terms of the contract between the buyer and seller. The default rule is that the risk of loss passes from the seller to the buyer upon delivery of the goods. However, the parties can agree to different terms, such as requiring the seller to bear the risk of loss until the buyer receives the goods. Therefore, title ownership and risk of loss are not necessarily the same under the UCC.

Question 7

The UCC looks solely upon "title" to determine ownership in goods.

Accepted Answer

The Uniform Commercial Code (UCC) considers various factors, not just "title," to determine ownership of goods, including possession, security interests, and terms of the contract.

Question 8

A buyer has an insurable interest in goods when they are identified.

Accepted Answer

This is true according to the principle of insurable interest in insurance. Once the buyer has identified the goods they intend to purchase, they have a financial interest in ensuring that those goods are protected against loss or damage.

Question 9

In the case of Lindholm v.Brant,the court ruled:

Accepted Answer

The answer of In the case of Lindholm v.Brant,the court...

Question 10

In a shipment contract,title and risk of loss pass to the buyer when the goods are properly tendered at the destination point.

Accepted Answer

The answer of In a shipment contract,title and risk of...

Question 11

Only one party can have an interest in particular goods at a particular time.

Accepted Answer

Multiple parties can have an interest in particular goods at a particular time, such as in a competitive market where multiple buyers are interested in purchasing the same goods from a seller.

Question 12

You leave your watch with Bryte Jewelers for repair.Bryte could not transfer ownership interests in the watch to a customer of the jewelry shop without your permission.

Accepted Answer

Bryte Jewelers does not have ownership interests in the watch, only possession. Therefore, they cannot transfer ownership to someone else without the owner's permission.

Question 13

Buyer is located in Des Moines,Iowa and seller is located in Sacramento,California.The contract specifies F.O.B.Des Moines.This contract is a:

Accepted Answer

The answer of Buyer is located in Des Moines,Iowa and...

Question 14

George's Greenery orders two dozen live dogwood trees from Nancy's Nursery.George's is to keep the dogwoods healthy by keeping them in a greenhouse following certain instructions to keep the air at the right temperature,etc.The sale is made on a trial basis and George's may return all unsold dogwood trees at the end of 30 days.This contract is a:

Accepted Answer

This is a sale or return contract because George's Greenery is buying the dogwood trees with the option to return any unsold trees within 30 days. The risk of loss remains with Nancy's Nursery until the trees are either sold to a customer or returned by George's Greenery.

Question 15

Ruppart Manufacturing has a contract for the sale of 100 cases of teaching supplies to Teachers Co-op,Inc.Payment of the order is to be made in installments over the next year.Ruppart Manufacturing keeps a security interest in the cases sold to assure payment by Teachers Co-op,Inc.When the order is completed,Ruppart ships the order.Legally:

Accepted Answer

Both parties have an insurable interest in the supplies. Ruppart has a security interest in the cases to assure payment, so if anything happens to the supplies before Teachers Co-op, Inc. pays off the installment, Ruppart would suffer a loss. Teachers Co-op, Inc. also has an insurable interest in the supplies as they are the ones who are purchasing them and will ultimately use them for teaching. Therefore, both parties have an insurable interest in the supplies.

Question 16

Crops are considered identified when they are planted.

Accepted Answer

Crops are considered identified once they are planted, as they have now taken root and can be distinguished from surrounding plants or weeds.

Question 17

A purchaser may acquire better title than the seller had.

Accepted Answer

This is true because a purchaser may acquire title through a lawful process such as a court judgment or adverse possession, which would give them better title than the preceding seller had.

Question 18

If Terrill steals a digital camera and sells it to Samuel,Samuel will get a valid title as long as he can prove he gave value for the camera and acted in good faith.

Accepted Answer

The answer of If Terrill steals a digital camera and...

Question 19

Angela uses fraudulent means to induce Walter to enter a sales contract.Angela obtains a voidable title to the goods.

Accepted Answer

Angela's use of fraudulent means makes the sales contract voidable, meaning that Walter has the option to either affirm or void the contract. However, Angela's possession of the goods is considered a voidable title because she obtained it through fraudulent means.

Question 20

Murphy stops at a garage sale and purchases an oak rocking chair.Murphy and the seller agree that Murphy will pick up the rocking chair the next day when Murphy will return with a truck.That night,there is an earthquake and the rocking chair is swallowed up by earth and totally destroyed.In this case,the seller had the risk of loss and must refund the purchase price to Murphy.

Accepted Answer

The earthquake is considered an unforeseeable event or "Act of God" and therefore the risk of loss is not on the seller. Murphy would not be entitled to a refund.

Quiz 20: Ownership and Warranties