Question 1

Downtown Construction Co. obtained possession on April 1 of a bulldozer from Bulldozer Sales Co. to use in Downtown's business with a right to return the bulldozer no later than June 1 with no obligation other than to pay for the fuel the bulldozer used. Downtown is owned by Alice who allows her fifteen-year-old son, Bob, to operate the bulldozer on May 1 on a Downtown job. Bob is inexperienced and wrecks the bulldozer. Explain who has the risk of loss.

Accepted Answer

The answer of Downtown Construction Co. obtained possession on April...

Question 2

Lucky Used Cars, using their contracts form, agree to sell Alvin a truck for $5,000. The contract provides that it may not be modified-except by a signed writing. After entering into the contract, Lucky and Alvin orally agree that Lucky will include new floor mats and a bed liner for an extra $100. At the time of delivery, Lucky refuses to provide the new floor mats and bed liner unless Alvin pays an extra $250. Discuss the enforceability of the oral agreement Lucky and Alvin had.

Accepted Answer

The answer of Lucky Used Cars, using their contracts form,...

Question 3

Seth was the highest bidder for an antique chest at an auction sale. There was nothing to indicate whether the auction was with or without reserve. The auctioneer withdrew the chest from the auction without accepting Seth's bid because the bid was too low. Is the auctioneer legally entitled to withdraw the chest from the sale? Explain.

Accepted Answer

The answer of Seth was the highest bidder for an...

Question 4

Sun Supply Co. offered to sell Apartment Management Inc. air conditioner filters at $15 per case in a signed writing that stated the price was good for sixty days. Apartment Management discovered that other sellers charge $20 per case for identical air conditioner filters, but before it can accept Sun Supply's offer, Sun Supply withdrew the offer after only 30 days, stating that changed market conditions had forced it to charge more. Discuss the case.

Accepted Answer

The answer of Sun Supply Co. offered to sell Apartment...

Question 5

Mike and Jane contract to purchase and sell $1,000,000 worth of computer chips to be manufactured in Japan and shipped to San Francisco. The contract is silent about the method of delivery. Mike asserts that delivery is by ship, which is customary in the computer chip industry, but Jane insists that delivery is by air, which is what a previous contract between Mike and Jane provided. Explain how a court will resolve this dispute.

Accepted Answer

The answer of Mike and Jane contract to purchase and...

Question 6

Ralph, of Miami, Florida, ordered "100 red widgets" from Maria's business located in Seattle, Washington. Shipment was f.o.b. Seattle via Red Freight Co. By mistake Maria sent "100 green doodads" to Ralph. The shipment was destroyed when the Red Freight truck was involved in a traffic accident in Oklahoma City. Ralph had insurance coverage that includes "items purchased that are in transit." Explain whether Ralph or Maria has the risk of loss.

Accepted Answer

The answer of Ralph, of Miami, Florida, ordered "100 red...

Question 7

Warren left his watch to be cleaned at a jewelry store. By mistake, a clerk sold the watch to Foley. Foley did not know that the watch rightfully belonged to Warren. Analyze the case.

Accepted Answer

The answer of Warren left his watch to be cleaned...

Question 8

Which of the following is true of insurable interest?

Accepted Answer

Notwithstanding the buyer's right to insure the goods, sellers retain an insurable interest in the goods as long as they have title to them.

Question 9

Big Choppers orally contracts with Jane to make a custom motorcycle for Jane for $30,000. When completed, Jane refuses to accept the motorcycle or pay for it. Discuss the validity of the oral contract.

Accepted Answer

The answer of Big Choppers orally contracts with Jane to...

Question 10

A document of title allows the person who possesses it to:

Accepted Answer

A document of title is a paper giving the person who possesses it the right to receive the goods named in the document.

Question 11

On Saturday, Hussein purchases a sofa from Big Box Furniture Inc. who agrees to deliver the sofa without charge to Hussein at 3 p.m. the following Monday. Hussein forgets about the delivery and is not home at 3 p.m. on Monday when the Big Box delivery truck arrives. The delivery truck takes the sofa back to the Big Box store where it is destroyed in a fire that occurs at 9 p.m. Monday. Discuss the risk of loss in this case.

Accepted Answer

The answer of On Saturday, Hussein purchases a sofa from...

Question 12

Samantha was looking for a certain shade of thread to complete her needlework on a tablecloth. At a local shop, however, she was unable to decide which of the five selected shades would be the closest match to the cloth. The shop owner allows Samantha to take the selected shades home and decide which one she would want to have. This is an example of which of the following?

Accepted Answer

A sale that allows goods to be returned even though they conform to the contract is called a sale on approval when the goods are primarily for the buyer's use.

Quiz 13: Sales Contracts: Formation, Title, and Risk of Loss

Warren left his watch to be cleaned at a jewelry store. By mistake, a clerk sold the watch to Foley. Foley did not know that the watch rightfully belonged to Warren. Analyze the case.

Which of the following is true of insurable interest?

Big Choppers orally contracts with Jane to make a custom motorcycle for Jane for $30,000. When completed, Jane refuses to accept the motorcycle or pay for it. Discuss the validity of the oral contract.

A document of title allows the person who possesses it to: