Question 1

Jim's Jewelry Store orders Sho-Off-brand display racks from Kino's Merchandise Presentation,Inc.Kino's mistakenly ships racks of the wrong size and color,which Jim's rejects and returns via Longroad Shipping Company.During the re?turn,the racks are lost.The loss is suffered by

Accepted Answer

The mistake was made by Kino's in shipping the wrong size and color display racks, and the loss occurred during the return shipment. Therefore, Kino's is responsible for the loss.

Question 2

Gene steals Hilary's brooch and sells it to Imelda.Hilary can recover the brooch from Imelda

Accepted Answer

Hilary can recover the brooch from Imelda under any circumstances because stolen property remains the property of the original owner, regardless of the buyer's knowledge or consideration given.

Question 3

Commercial Storage (CS),a bailee,holds goods for Delta Distributors,Inc. ,which has contracted to sell them to Eagle Company.The goods are to be delivered without being moved.The risk of loss will pass to Eagle when Eagle receives

Accepted Answer

The risk of loss passes to the buyer once they receive a negotiable document of title, which in this case would likely be a bill of lading, indicating that they have control over the goods and have assumed responsibility for them.

Question 4

Focus Camera Shop receives Sharpview-brand lenses from Optical,Inc. ,under a sale or return agreement.While the lenses are in Focus's possession,title is held by

Accepted Answer

The answer of Focus Camera Shop receives Sharpview-brand lenses from...

Question 5

Heavy Equipment Corporation leases six forklifts to Inland Refining Company,but as the forklifts are delivered,they are lost in an explosion.Under the UCC,the parties' rights and obligations with respect to the loss depend on the concept of

Accepted Answer

The parties' rights and obligations with respect to the loss depend on the concept of risk of loss. This is because risk of loss determines who bears the loss when goods are damaged or destroyed before the buyer accepts them. In this scenario, the forklifts were lost in an explosion before Inland Refining Company had a chance to accept them, so the question of who bears the loss arises based on the risk of loss provision in the UCC.

Question 6

With a bill of lading,Cartage Common Carrier Company acknowledges possession of certain goods and contracts to deliver them.Cartage is

Accepted Answer

Cartage is a common carrier that acknowledges possession of goods and contracts to deliver them, making them a bailee. The other options do not accurately describe the role of a cartage common carrier company.

Question 7

Juice Café buys 25 bags of Florida navel oranges from Sweet Citrus Company.The parties agree to ship the oranges "F.O.B.Juice Café" via Fresh Harvest Truckline.The oranges rot in transit.The loss is suf?fered by

Accepted Answer

Since the agreement was made F.O.B. Juice Café, it meant that once the oranges were loaded onto the truck, Sweet Citrus Company fulfilled its responsibility and the risk of loss or damage in transit passed on to Juice Café. Therefore, Sweet Citrus is not liable for the loss and Juice Café bears the risk of loss in this scenario.

Question 8

Weightless Workouts,Inc. ,offers to sell a home gym to Jessica and sends it to her on a trial basis.This is

Accepted Answer

The situation described is a sale on approval, which means that the seller has sent the product to the buyer for their inspection and approval before finalizing the sale. The buyer can either accept the product and make the purchase or return it to the seller.

Question 9

Medico Records Company orders thirty hard drives from Nano Computers,Inc.The hard drives are stored in Enviro Warehouse.Under the terms of the order,Nano must give Medico a warehouse receipt for the goods,which Medico will then pick up.Title to the goods passes to Medico when

Accepted Answer

Title to the goods passes to Medico when Nano gives them a warehouse receipt for the drives. This is because the warehouse receipt is a document of title that represents ownership of the goods stored in the warehouse. Therefore, once Medico receives the warehouse receipt from Nano, they become the rightful owner of the hard drives, even though they have not physically picked them up yet.

Question 10

Leo buys a Naturo-brand bicycle from his brother,Mike.Mike agrees to keep the bike at his house until Leo picks it up.During a storm,a tree falls from Ogden's yard onto Mike's garage and destroys the bike.The loss of the bike is suffered by

Accepted Answer

The loss of the bike is suffered by Leo as he is the owner of the bike. Even though the bike was kept at Mike's house, the ownership was already transferred to Leo when he bought the bike from Mike. Therefore, Leo bears the risk of loss in this situation.

Question 11

My-Tee Shirt Corporation orders from Celebrity Sales,Inc. ,goods that are stored in a Realty,Inc. ,warehouse.My-Tee pays for the goods,delivery is via the transfer of a negotiable warehouse receipt,and My-Tee moves the goods out of the warehouse.The risk of loss passes to My-Tee when it

Accepted Answer

The risk of loss passes to My-Tee when it receives the negotiable warehouse receipt, as this indicates the transfer of ownership and control over the goods.

Question 12

A specific grade of corn that fills Dean and Ethel's silo is fungible.This means that the corn is

Accepted Answer

Fungible means that the corn is alike naturally or by agreement or trade usage. So, the grade of corn that Dean and Ethel's silo is filled with is similar to other corn in terms of quality and characteristics, making it interchangeable with other corn of the same grade.

Question 13

Office Reports Corporation (ORC)orders five Zippy-brand inkjet printers from Prime Printers,Inc.(PPI),to be delivered by PPI.Before PPI's truck arrives with the goods,ORC tells PPI it will not pay.The printers are destroyed in transit.The loss is suffered by

Accepted Answer

ORC has title to the goods and is responsible for the loss.

Question 14

Textiles,Inc. ,and Fab Fabric Corporation enter into a contract for a sale of muslin.The terms do not clearly indicate whether it is a destination or shipment contract.A court would most likely presume that it is

Accepted Answer

When the terms of a contract for the sale of goods do not specify whether it is a destination or shipment contract, the UCC (Uniform Commercial Code) provides a default rule. According to UCC, if the contract does not specify a place of delivery, it is presumed to be a shipment contract, which means that the seller is obligated to deliver the goods to a carrier for transportation to the buyer, and the risk of loss transfers to the buyer upon delivery of goods to the carrier. Therefore, in this case, a court would most likely presume that it is a shipment contract, and Fab Fabric Corporation would be responsible for arranging and paying for the transportation of muslin.

Question 15

Orange Computer Corporation sells Pad-brand MP3 players to Quik Discount Stores and other retailers.Orange will have an insurable in?ter?est in the players as long as

Accepted Answer

Orange retains title to the goods, meaning they have a financial interest in them and can insure them against loss or damage. If title had transferred to the retailers, Orange would no longer have an insurable interest.

Question 16

Corona Storage Company holds goods for Durango Sales Corporation,which contracts to sell them to El Dorado Stores,Inc.The goods are to be delivered without being moved and are represented by a negotiable bill of lading.The risk of loss passes to El Dorado

Accepted Answer

According to the scenario, the goods are represented by a negotiable bill of lading. The risk of loss will pass to El Dorado when they receive the bill of lading since it is a negotiable instrument that signifies ownership of the goods. Therefore, choice D is the correct answer.

Question 17

Rita orders 1,000 cases of 1/4-inch nuts from Steel Parts Company's 10,000-case lot.Steel Parts separates 1,000 cases from the lot.Title and risk of loss

Accepted Answer

Title and risk of loss typically pass from the seller to the buyer when goods are separated from a larger lot and identified as the specific goods to be sold. In this case, Steel Parts separates 1,000 cases from the lot, so title and risk of loss would shift to Rita at that point.

Question 18

Geno's Café orders five gallons of PureMaid-brand transfat-free olive oil from Chefs Supply,Inc.Chefs mistakenly ships soy oil,which Geno's keeps,despite the nonconform?ity.The oil is destroyed in a fire.The loss is suffered by

Accepted Answer

Geno's Café accepted the nonconforming goods (soy oil) and thus assumed the risk of loss when they decided to keep it, making them responsible for the loss when the oil was destroyed in a fire.

Question 19

Lou's Bicycle Store contracts to buy fifty bicycles from Mountain Bikes,Inc.Unless the contract states otherwise,this is

Accepted Answer

A shipment contract is a contract where the seller ships goods to the buyer, and the buyer takes delivery from the carrier. This means that the seller is responsible for getting the goods to the carrier, but once the carrier takes custody of the goods, the buyer becomes responsible for them. In this scenario, Lou's Bicycle Store is contracting to buy the bicycles from Mountain Bikes, Inc., but it does not specify who is responsible for delivering the bicycles. Therefore, it is most likely a shipment contract.

Question 20

Sole Savers,Inc. ,and Rite Fit Footwear Stores enter into a contract for a sale of shoes.The contract indicates that the price includes transportation costs to a specific destination by including the term

Accepted Answer

The term F.O.B. (Free On Board) indicates that the seller pays for transportation of the goods to the specified destination, which includes transportation costs.

Quiz 20: A: Title,risk,and Insurable Interest