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PlastiCo Contracted to Buy 45,000 Litres of a Chemical from Natural

Question 20

Multiple Choice

PlastiCo. contracted to buy 45,000 litres of a chemical from Natural Chemicals Ltd. The chemical still had to be refined at the time the contract was made. Once it was refined, Natural had it pumped into 2,200-litre barrels, and loaded them onto a truck owned by Heavy Haulage Inc., a common carrier. Suppose PlastiCo. is petitioned into bankruptcy and Natural hears about this the day after Heavy Haulage picks up the barrels. Which of the following statements is true?


A) Since only the buyer may normally recover goods from a carrier, Natural cannot intercept the shipment and repossess it, so Natural may never receive payment for it if there are many creditors with a better claim to PlastiCo's assets.
B) If a buyer is bankrupt before delivery of goods, it cannot take title to them so title will remain with Natural and it can repossess them.
C) If Natural and PlastiCo. had inserted a clause into the contract which said that title would remain with Natural until the goods were paid for in full by PlastiCo., it would not be effective because it would conflict with the Sale of Goods Act.
D) None of the responses are true.
E) All of the responses are true.

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