Question 1

Mary orders a dress for $1,000. The designer sends the wrong size. Mary doesn't inspect the dress on arrival and therefore doesn't discover the nonconformity until the day before she is to wear it to her first board meeting as president of Tri-State Engineering. She calls the designer and sends the dress back, but it is lost in the mail. Mary's insurance would cover $400 of the loss. The designer's insurance would cover $900. Who is liable?

Accepted Answer

The risk is Mary's to the extent of $400 because her insurance would cover $400 of the loss.

Question 2

Howard stole a computer and then sold it to his friend Ivan for $100. Ivan has:

Accepted Answer

Ivan has a void title to the computer because Howard, as a thief, never had a legitimate title to transfer. A thief cannot pass good title to stolen property, regardless of the buyer's good faith or payment.

Question 3

a. What is a bulk transfer? 
b. What is the purpose of bulk sales law? 
c. What is the effect of a failure to comply with the provisions in Article 6 in those states that still follow this Article?

Accepted Answer

The answer of a. What is a bulk transfer? 
b....

Question 4

Which of the following is necessary to be considered a good faith purchaser?

Accepted Answer

All of these conditions (acting honestly, giving value for the item, and taking the goods without notice of any defect in title) are necessary to be considered a good faith purchaser.

Question 5

a. Arthur brings his new computer to the Quick Fix Repair Shop to be fixed. Two days later, a buyer comes into the shop, and Quick Fix inadvertently sells Arthur's computer. Arthur now wants his computer back. Can Arthur get his computer back? Explain. 
b. Why do you think the Code follows this rule in situations such as the one above? Explain.

Accepted Answer

The answer of a. Arthur brings his new computer to...

Question 6

Brett contracts to purchase a particular Chevrolet from Johnson's car lot. Brett obtains a "special property interest" in the car when:

Accepted Answer

A "special property interest" in the car is created when the contract is made, as it establishes Brett's right to obtain and use the car according to the terms of the contract.

Question 7

Explain what a trial sale is. Identify the two types of trial sales recognized by the UCC and explain the test for distinguishing between the two types. Discuss transfer of title and risk or loss with each type of trial sale.

Accepted Answer

The answer of Explain what a trial sale is. Identify...

Question 8

a. What is an insurable interest? At what point in a sales transaction does the buyer get an insurable interest? 
b. Is the buyer the only one who has an insurable interest in the goods? Is it possible for both the buyer and the seller to simultaneously hold an insurable interest? Explain.

Accepted Answer

The answer of a. What is an insurable interest? At...

Question 9

How has the Code affected the rights of good faith purchasers with respect to minors?

Accepted Answer

The answer of How has the Code affected the rights...

Question 10

Everett bought a washer and dryer for $1,200 from Neely Appliances, which was to deliver the set in two days, on its regular delivery date for Everett's area. However, on the night of the sale, Neely's suffered an accidental fire and the washer and dryer were destroyed. Who has the risk of loss? Who would have the risk of loss if Everett had instead bought a used washer and dryer from his neighbor who was having a moving sale, and the washer and dryer were destroyed after Everett had paid for them and after the neighbor made them available to Everett but before he picked them up?

Accepted Answer

The answer of Everett bought a washer and dryer for...

Quiz 21: Transfer of Title and Risk of Loss

Howard stole a computer and then sold it to his friend Ivan for $100. Ivan has:

a. What is a bulk transfer? b. What is the purpose of bulk sales law? c. What is the effect of a failure to comply with the provisions in Article 6 in those states that still follow this Article?

Which of the following is necessary to be considered a good faith purchaser?

Brett contracts to purchase a particular Chevrolet from Johnson's car lot. Brett obtains a "special property interest" in the car when:

Explain what a trial sale is. Identify the two types of trial sales recognized by the UCC and explain the test for distinguishing between the two types. Discuss transfer of title and risk or loss with each type of trial sale.

a. What is an insurable interest? At what point in a sales transaction does the buyer get an insurable interest? b. Is the buyer the only one who has an insurable interest in the goods? Is it possible for both the buyer and the seller to simultaneously hold an insurable interest? Explain.

How has the Code affected the rights of good faith purchasers with respect to minors?