Deck 21: Legal Aspects of Supply Chain Management

Question 1

A building is essential to warehousing.

Answer 1

False

Question 2

A negotiable warehouse receipt states that the goods received will be "delivered to the bearer."

Answer 2

True

Question 3

Field warehousing is the storage of farm crops in the field where they have been grown.

Answer 3

False

Question 4

The rights of a holder of a duly negotiated warehouse receipt are extinguished by the warehouser's surrender of goods to the depositor.

Question 5

General contract law determines whether a limitation clause is a part of the contract between the warehouser and the customer.

Question 6

A public warehouser has a specific lien against the goods stored for reasonable costs incurred from the storage.

Question 7

Warehouse receipts and bills of lading are both considered documents of title.

Question 8

The storage of goods in a warehouse and the shipment of goods by a common carrier are examples of special bailments.

Question 9

The purchase of a warehouse receipt by due negotiation eliminates all prior claims.

Question 10

A contract carrier holds itself out as willing to furnish transportation for compensation without discrimination to all members of the public who apply.

Question 11

A public warehouser is statutorily required to insure all the goods.

Question 12

The rights and duties of warehousers are regulated by the UCC.

Question 13

A negotiable warehouse receipt that provides for delivery of the goods to the order of Jill Jones may be negotiated by delivery of the document to the purchaser.

Question 14

A warehouse receipt may be either negotiable or nonnegotiable.

Question 15

To be engaged in warehousing, an enterprise must have appropriate storage buildings.

Question 16

The rights of a transferee of a negotiable bill of lading are defeated if the goods have been stopped in transit.

Question 17

Bills of lading for intrastate shipments are governed by the UCC, while those for interstate shipments are regulated by the Federal Bills of Lading Act.

Question 18

A bill of lading will be negotiable if its terms are that the goods are to be delivered to "bearer" or to "the order of" a named person.

Question 19

A transferee's rights to a warehouse receipt may be defeated by a good-faith purchaser of the goods from the transferor of the receipt.

Question 20

If a warehouse receipt provides for the delivery of the goods "to the bearer," the receipt may be negotiated by transfer of the document.

Question 21

A bill of lading that consigns the goods "to bearer" is called a:

A) nonnegotiable bill of lading.
B) straight bill of lading.
C) negotiable bill of lading.
D) common bill of lading.

Question 22

A common carrier is liable for all delays in the delivery of goods.

Question 23

As a general rule, a hotelkeeper has a lien on the property of boarders or lodgers.

Question 24

A factor is a special type of bailee.

Question 25

Jeff purchased in good faith a warehouse receipt for 1,000 pairs of running shoes without notice of any defense to it, for value, and in the regular course of his business. Unknown to Jeff, the goods had been stolen from Jane and delivered to the warehouse that issued the receipt purchased by Jeff. Which of the following statements is true?

A) Jeff holds a duly negotiated document of title and is not subject to Jane's title.
B) Jane is entitled to the goods and will prevail over Jeff.
C) Jeff is not a holder of a duly negotiated document.
D) Jane cannot recover the goods but can sue the warehouse for conversion.

Question 26

A warehouser that holds itself out to serve the public generally without discrimination is called a(n):

A) public warehouser.
B) general warehouser.
C) nondiscriminatory warehouser.
D) ordinary warehouser.

Question 27

Myra, a person who attended a wedding reception at the Hotel Miramar, is injured on the dance floor. Miramar is liable to Myra for her injuries.

Question 28

A carrier owned and operated by the shipper is:

A) a common carrier.
B) a common carrier.
C) a private carrier.
D) a consignor.

Question 29

A common carrier transporting goods under a COD shipment is liable if it takes a check in payment and the check bounces.

Question 30

In most states, statutes limit or provide a method of limiting the common law liability of a hotelkeeper.

Question 31

When a carrier accepts goods for land shipment, it ordinarily issues to the shipper a(n):

A) bill of lading.
B) intent to transport memorandum.
C) warehouse receipt.
D) trust receipt.

Question 32

The major purpose of field warehousing is to:

A) create warehouse receipts that the owner can pledge as security for loans.
B) create additional space in the firm's own warehouse.
C) allow warehousers an opportunity to service common carriers.
D) transfer title to buyers without requiring them to pick up merchandise at the plant's location.

Question 33

The rights and duties of a warehouse are for the most part the same as those of a(n):

A) bailee under a bailment for the sole benefit of the bailee.
B) bailee under an ordinary mutual-benefit bailment.
C) bailor under a bailment for the sole benefit of the bailor.
D) bailee under a bailment for the sole benefit of the bailor.

Question 34

If a common carrier delivers goods to the wrong person, the carrier is liable for breach of contract and for the tort of conversion.

Question 35

Contract clauses that limit a common carrier's liability are void as contrary to public policy.

Question 36

All of the following are true statements about warehousers except:

A) A warehouser is a bailee.
B) A warehouser may issue a negotiable or nonnegotiable receipt.
C) A warehouser is an insurer of the goods.
D) A warehouser is liable for damaged goods if damage is caused by the warehouser's negligence.

Question 37

A purchaser of a nonnegotiable warehouse receipt:

A) receives no implied warranties.
B) may acquire rights superior to those of the transferor.
C) acquires only the title and the rights the transferor had authority to transfer.
D) may be considered to have the rights of a holder in due course.

Question 38

The rights of a holder of a warehouse receipt depend on whether the receipt is:

A) negotiable.
B) rescissory.
C) notarized as a document of title.
D) notarized as a bill of lading.

Question 39

A sale by a factor can pass title to goods from the consignor to the purchaser.

Question 40

A hotelkeeper has a bailee's liability regarding property expressly entrusted to a hotelkeeper's care.

Question 41

When goods are delivered to a common carrier for immediate shipment and while they are in transit, who is normally liable for any loss or damage to the goods?

A) the shipper
B) the consignee
C) the carrier
D) the individual designated as responsible in the bill of lading

Question 42

A common carrier is absolutely liable for loss or damage to goods in all of the following situations except:

A) incidents arising from the inherent nature of the goods.
B) incidents involving a public enemy.
C) incidents involving acts of God
D) incidents involving mechanical breakdown of the vehicle.

Question 43

When consigned goods are sold by a factor:

A) When consigned goods are sold by a factor:
B) title passes even if the goods have been stolen, provided the factor is ignorant of this fact.
C) the sale passes the title of the owner to the buyer.
D) strict compliance with the Federal Factors Act is required to pass title.

Question 44

The relationship of guest and hotelkeeper ends when the guest:

A) pays his or her bill.
B) advises the hotelkeeper of his or her departure.
C) leaves or ceases to be a transient.
D) has stayed for 30 days and becomes a boarder.

Question 45

A common carrier transporting goods under a COD shipment may:

A) make delivery without first obtaining payment.
B) not make delivery without first receiving payment.
C) accept a check as payment and have no liability.
D) not avoid liability without a signed release.

Question 46

The hotelkeeper owes a duty as a bailee of personal property in a(n) _______ to ________.

A) bailment for the benefit of the bailor, transient guests.
B) mutual benefit bailment, transient guests.
C) bailment for the benefit of the bailor, permanent boarders.
D) mutual benefit bailment, permanent boarders.

Question 47

Bob Brown entered the Hotel Lux to attend a conference being held within the hotel. Sam Smith arrived to attend the same conference, registered at the front desk, and obtained a room. Sally Jones also intended to participate in the conference and was in essence living at the hotel at the time. What relationship exists between the hotel and each of these individuals? What can be said of the hotel's obligations to each individual under these circumstances?

Question 48

What is not included in a common carrier's lien on goods that it transports?

A) consequential damages
B) demurrage
C) costs of preserving the goods
D) costs of a sale to enforce the lien

Question 49

A(n) ______is owned and operated by the shipper.

A) common carrier
B) public carrier
C) contract carrier
D) private carrier

Question 50

The legal definition of a guest of a hotel requires that the person:

A) live at least five miles from the hotel.
B) is a guest of a registered occupant of the hotel.
C) is a transient.
D) stay at the hotel for at least 24 hours.

Question 51

A transferor of a bill of lading makes all of the following implied warranties to the transferee, except:

A) the transferor has no knowledge of defects.
B) the transfer is rightful.
C) the bill of lading is genuine
D) the goods are market value.

Question 52

The Willett Seed Company stored its goods with the Augusta Warehouse Company and received a negotiable warehouse receipt. The Willett Seed Company then borrowed money from the Georgia Railroad Bank and pledged the warehouse receipt as security. The seed company defaulted, and the bank demanded the goods from the warehouse. The warehouse stated that it already had delivered the goods to the seed company on the strength of that company's promise that it would surrender the receipt shortly thereafter. The bank sued the warehouse for the value of the goods. Will the bank win?

Question 53

Hal was a merchant who deposited 2,000 barrels of olive oil in a public warehouse operated by Welcome Warehouse. Hal was issued a warehouse receipt for the 2,000 barrels that by its terms was deliverable "to bearer." Hal had engaged in many other transactions with Welcome and was in arrears for quite a bit of money to Welcome. Hal duly negotiated the warehouse receipt to Esmeralda Enterprises in payment of cash. Hal's financial affairs continued to deteriorate and Welcome never was paid the debt. When Esmeralda's agent requested the oil and offered to remit the warehouse receipt, Welcome refused to release the oil, claiming a lien on the oil for Hal's debt. Esmeralda sued. Decide the case.