Question 1

A seller with voidable title can transfer good title to a good faith purchaser for value.

Accepted Answer

If a seller with voidable title sells the property to a good faith purchaser for value, the purchaser can acquire a good title to the property. However, if the true owner challenges the sale, the purchaser may lose their rights to the property.

Question 2

"Unless otherwise explicitly agreed," title passes to the buyer at the time at which the seller orally agrees to deliver the goods.

Accepted Answer

Title passes to the buyer at the time and place agreed upon by the parties, as per the Uniform Commercial Code (UCC). An oral agreement to deliver the goods does not necessarily transfer title to the buyer.

Question 3

In a destination contract,the seller is required to deliver the goods to a particular destination.

Accepted Answer

In a destination contract, the seller assumes the responsibility for delivering the goods to a specific destination. Therefore, option A is true.

Question 4

When a lessee sells leased equipment to a third party,the lessor cannot,under any circumstances,recover the equipment from the buyer.

Accepted Answer

The lessor may have the right to recover the equipment if the lease agreement includes a provision giving them the right to repossess the equipment in the event of a sale or transfer without permission. It is important to review the lease agreement carefully to understand the rights and obligations of both parties.

Question 5

A bill of lading serves as a con?tract for the transportation of goods.

Accepted Answer

A bill of lading is a legal document between a shipper and a carrier that details the type, quantity, and destination of goods being transported. It serves as evidence of the contract of carriage, and sets out the terms and conditions of the transportation of the goods.

Question 6

Before any interest in specific goods can pass from the seller to the buyer,the goods must exist and be identified to the contract.

Accepted Answer

This is a basic requirement of a valid contract. The goods must already exist and be identifiable before any transfer of ownership can occur.

Question 7

If a sale involves crops that are to be harvested within twelve months,iden?tification takes place when the seeds for the crops are purchased.

Accepted Answer

According to International Accounting Standards (IAS 41), identification of crops sold only takes place when the agricultural produce is harvested, not when the seeds are purchased.

Question 8

All UCC provisions relating to the passage of title for the sale of goods also apply to the lease of goods.

Accepted Answer

The UCC provisions for the sale of goods are distinct from those for the lease of goods, which are covered under Article 2A, not Article 2.

Question 9

In most situations involving sales,rights and liabilities are determined by who has the title to the goods.

Accepted Answer

The answer of In most situations involving sales,rights and liabilities...

Question 10

Entrusting goods to a merchant who deals in goods of the kind gives the merchant the power to transfer all rights to a buyer in the ordinary course of business.

Accepted Answer

This statement is in accordance with the UCC (Uniform Commercial Code) which recognizes the concept of entrustment and gives the merchant the power to transfer all rights to a buyer in the ordinary course of business.

Question 11

Owners in common are owners with an undivided share of the whole.

Accepted Answer

Owners in common each have an undivided share of the entire property. This means they do not own a particular portion of the property exclusively, but rather each owner has a percentage of ownership in the entire property.

Question 12

Even if goods are not identified to the contract,the title and risk of loss can still pass from the seller to the buyer.

Accepted Answer

The answer of Even if goods are not identified to...

Question 13

Future goods are goods that are not both existing and identified to the contract.

Accepted Answer

Future goods are goods that are not currently in existence or not yet identified at the time of the contract.

Question 14

A receipt issued by a warehouser for goods stored in a warehouse is a warehouse receipt.

Accepted Answer

A warehouse receipt is a document issued by a warehouser acknowledging the receipt and storage of goods in a warehouse. It serves as evidence of ownership of the goods and can be used as collateral for a loan or as a document of title in a commercial transaction.

Question 15

Unless a contract provides otherwise,it is assumed to be a shipment contract.

Accepted Answer

Under the Uniform Commercial Code (UCC), unless the contract provides otherwise, it is assumed to be a shipment contract.

Question 16

Identification,risk of loss,and insurable interest are all concepts that are involved in determining the rights and liabilities of parties to a contract.

Accepted Answer

Identification, risk of loss, and insurable interest are all important factors in determining the rights and liabilities of parties to an insurance contract. Identification refers to the specific property or person being insured, while risk of loss involves the potential for damage or harm to that property or person. Insurable interest refers to the party's financial stake in the property or person being insured. These concepts are all integral to establishing the terms and conditions of an insurance contract.

Question 17

Identification takes place before specific goods are designated as the subject matter of a sales or lease contract.

Accepted Answer

Identification occurs when specific goods are designated as the subject matter of a sales or lease contract, not before.

Question 18

In contracts involving a sale of unborn animals to be born within twelve months,identification takes place when the animals are born.

Accepted Answer

This is because the animals are not yet in existence at the time of the contract, so identification cannot occur until they are born. Once they are born, they become identified and can be delivered to the buyer.

Question 19

Fungible goods are goods that are alike naturally or by agreement or trade usage.

Accepted Answer

Fungible goods are goods that are interchangeable or can be replaced with another identical item without affecting its value or functionality. This can be based on their natural properties (such as grains of rice, barrels of oil), or by agreed-upon standards or trade usage (such as currency, stocks, or commodities traded on an exchange).

Question 20

When a document of title is required,title passes to a buyer when and where the document is delivered.

Accepted Answer

This is true. When a document of title is required (such as a bill of lading or warehouse receipt), title to the goods passes to the buyer when and where the document is delivered. Without the document, the buyer does not have legal claim to the goods.

Quiz 19: Title and Risk of Loss