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[Scuba Supplies] the Dive Shop Ordered Ten Mega2000 Diving Tanks

Question 86

Multiple Choice

[Scuba Supplies] The Dive Shop ordered ten Mega2000 Diving Tanks, ten SuperSlick wetsuits, and ten pairs of Awesome swim fins from ScubaCo under a destination contract. The tanks were scheduled to be delivered first, and the remaining items would arrive the following day. Upon the first delivery, The Dive Shop noticed that ScubaCo sent ten Mega500 Diving Tanks, an inferior model. The Dive Shop's owner called ScubaCo and was told that ScubaCo had sold out of the Mega2000 model, but the Mega500 was the same price, was "pretty much the same", and The Dive Shop had to pay for the order or it would be in breach of contract. The following day, ScubaCo checked the remainder of the order which consisted of the wetsuits and fins and verified it to be correct. It delivered the remainder of the order, however, The Dive Shop refused delivery. On the way to its next delivery, the carrier truck ran off the side of the road and the goods were lost.
-Toula is buying a delivery vehicle for her business and it will be available for her to pick up on Tuesday. On Monday, the day before her delivery truck is ready, Toula meets with her banker to complete the application for a small business loan. Can Toula use the delivery truck as collateral for the loan?


A) Yes, because the right to encumber goods has nothing to do with title.
B) No, because she does not yet have title to the delivery truck.
C) No, because having title does not mean that one can encumber the goods.
D) Yes, because she has a right to encumber the goods.
E) No, because risk of loss has not yet passed to her.

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