Question 1

Diamond Camera Shop receives lenses from Eye Optical,Inc.,under a sale or return agreement.While the lenses are in Diamond's possession,title is held by

Accepted Answer

The answer of Diamond Camera Shop receives lenses from Eye...

Question 2

Regal Recreation Sales,Inc.,allows Sandy to take a Regal boat for a "test run." Sandy tries the boat for a few hours,returns,and buys it.This is

Accepted Answer

This is a sale on approval, as Sandy was allowed to test the boat before deciding whether or not to purchase it. This means that the sale was only final once Sandy approved the purchase after the test run.

Question 3

Quality Computer Company agrees to sell one hundred hard drives to Retail Electronics,Inc.The hard drives,which Retail Electronics expressly requires to have certain amounts of memory,are to be shipped "F.O.B.Retail Electronics distribution center in Memphis,TN." When the drives arrive,Retail Electronics rejects them and informs Quality Computer that the drives do not conform to Retail Electronics' memory requirement.A few hours later,the drives are destroyed in a fire at Retail Electronics' distribution center.Will Quality Computer succeed in a suit against Retail Electronics for the cost of the goods

Accepted Answer

The answer of Quality Computer Company agrees to sell one...

Question 4

Li'l Jewelry Store orders display racks from Mark-Up Supplies,Inc.(MSI).MSI mistakenly ships racks of the wrong size and color,which Li'l rejects and returns via Nevermind Shipping Company.During the return,the racks are lost.The loss is suffered by

Accepted Answer

The loss is suffered by MSI only because they shipped the wrong items, and Li'l Jewelry Store rejected them. Once rejected, the risk of loss remains with MSI until the goods are correctly delivered.

Question 5

Moto Company sells new and used motorcycles.Some of the motorcycles are held on consignment,including six consigned by Nu Cycles,Inc.While the u cycles are in Moto's possession,title to them is held by

Accepted Answer

The answer of Moto Company sells new and used motorcycles.Some...

Question 6

Office Applications Company (OAC)orders six laser printers from Printing Products,Inc.(PPI),to be delivered by PPI.Before PPI's truck arrives with the goods,OAC tells PPI it will not pay.The printers are lost in transit.The loss is suffered by

Accepted Answer

The answer of Office Applications Company (OAC)orders six laser printers...

Question 7

Tone Style Stores orders leather jackets from Universa Clothing Company.Universa mistakenly ships denim jackets,which Tone rejects and returns via Valu Transport,Inc.During the return,the jackets are lost.The loss is suffered by

Accepted Answer

The loss is suffered by Universa only because Tone rejected the shipment due to the mistake, and the risk of loss remains with Universa until the correct goods are delivered.

Question 8

Diners Cafe orders five gallons of corn oil from EZ Distributors,Inc.EZ mistakenly ships olive oil,which Diners keeps,despite the nonconformity.The oil is destroyed in a fire.The loss is suffered by

Accepted Answer

Diners chose to keep the olive oil despite it being nonconforming, so they are responsible for its loss in the fire. EZ Distributors may be responsible for the initial mistake, but Diners' decision to keep the nonconforming product constitutes acceptance of the goods and transfers the risk of loss to them. Diners' customers are not involved in this situation.

Question 9

In the following situations,two parties claim the same goods.Who is most likely to prevail in each circumstance Explain.
(a)Olan steals Phil's television set and sells it to Quincy,an innocent purchaser,for value.Phil learns Quincy has the set and demands its return.
(b)Riley takes his television set for repair to Silky,a merchant who sells new and used television sets.By accident,one of Silky's employees sells the set to Tuna,an innocent purchaser-customer,who takes possession.Riley wants his set back from Tuna.

Accepted Answer

The answer of In the following situations,two parties claim the...

Question 10

Quik Sales Corporation orders goods from Re Stock Company.Re plans to market the goods to consumers generally.Re identifies the goods.Before they are shipped to Quik,an insurable interest in the goods exists in

Accepted Answer

The answer of Quik Sales Corporation orders goods from Re...

Question 11

Timekeep Watches,Inc.,ships an assortment of timepieces to Unique Jewelers,Inc.,which agrees to pay for items that are not returned within six months.This is

Accepted Answer

This is a sale or return agreement because Timekeep Watches, Inc. is sending an assortment of timepieces to Unique Jewelers, Inc. and Unique Jewelers, Inc. is agreeing to pay for the items that are not returned within six months. This means that it is not a straight sale or a consignment, where the items are sent to the retailer to sell on behalf of the supplier. It is also not a sale on approval, where the retailer has the option to return the items even after they have been paid for. Therefore, the best choice is a sale or return agreement.

Question 12

NuStores accepts a shipment of DVD players from Open-Ur-Eyes Video,Inc.NuStores later discovers a defect in the players,revokes acceptance,and returns the players via Playback,Inc.During the return,the players are lost.The loss is suffered by

Accepted Answer

The answer of NuStores accepts a shipment of DVD players...

Quiz 19: Title and Risk of Loss