Question 1

The seller has an insurable interest in goods even though he no longer owns them if he continues to retain a security interest in them.

Accepted Answer

A) True 
 B)False  True

Question 2

Clara obtained a necklace by larceny.If she sells the necklace to Sherry,who is a good faith purchaser for value,Sherry obtains valid title.

Accepted Answer

A) True 
 B)False  True

Question 3

Under a shipment contract,the seller passes title to the buyer when the goods arrive.

Accepted Answer

A) True 
 B)False  False

Question 4

Growingreen,a gourmet fresh food store,orders 100 lbs.of peaches from Western Fruits "on approval." Growingreen has never dealt with Western before this transaction.Since it only sells the highest quality fruits,Growingreen asked for and received these special terms.The peaches arrived on Saturday,but the owners of Growingreen were too busy to open the crates.Sunday they are closed.Monday at 4 p.m. ,they opened the boxes and inspected the peaches.They did not meet the high standards of Growingreen,so they nailed the crates shut and ordered a truck to return them the next day.They arrived at Western on Thursday,totally spoiled,a week after they were sent.This is the first time Western knew they were not being accepted.Who is responsible for the damages to the peaches?

Accepted Answer

A)  Growingreen,since it did not,within a reasonable time,notify Western of its election to return the peaches 
B)  Growingreen;the risk of loss was on them when the peaches arrived 
C)  Western,since they retained the risk of loss until approval 
D)  Western,because they agreed to take the goods back 
A)  Growingreen,since it did not,within a reasonable time,notify Western of its election to return the peaches 
B)  Growingreen;the risk of loss was on them when the peaches arrived 
C)  Western,since they retained the risk of loss until approval 
D)  Western,because they agreed to take the goods back

Question 5

Jack is a guest in Harry's home.While there,he goes into the library and picks up a music box that is part of Harry's collection.Jack overwinds the stem and it breaks.Hoping Harry won't notice,Jack takes the music box for repair to a jeweler who sells similar ones.The jeweler fixes it,but forgets to tag it and an unsuspecting clerk sells it to Robert.Jack is frantic.Can Harry get the music box from Robert?

Accepted Answer

A)  No,the jeweler gives good title to a bona fide purchaser for value 
B)  No,the jeweler was not a merchant with regard to the music box 
C)  Yes,Robert was not a buyer in the ordinary course of business 
D)  Yes,Robert has assumed only Jack's title,which is no title at all 
A)  No,the jeweler gives good title to a bona fide purchaser for value 
B)  No,the jeweler was not a merchant with regard to the music box 
C)  Yes,Robert was not a buyer in the ordinary course of business 
D)  Yes,Robert has assumed only Jack's title,which is no title at all

Question 6

At common law,the risk of loss or damage to goods identified under a contract of sale falls upon:

Accepted Answer

A)  the buyer. 
B)  the seller. 
C)  the party who had title or ownership of the goods at the time of the loss or damage. 
D)  the designated party as determined by the court. 
A)  the buyer. 
B)  the seller. 
C)  the party who had title or ownership of the goods at the time of the loss or damage. 
D)  the designated party as determined by the court.

Question 7

A seller has the right to transfer title:

Accepted Answer

A)  in any case in which the seller has possession of the goods. 
B)  in all cases in which the seller has the power to transfer title. 
C)  even if the seller does not have either possession of or title to the goods,if he has authority to sell the goods for the rightful owner. 
D)  only if the seller is the rightful owner of the goods. 
A)  in any case in which the seller has possession of the goods. 
B)  in all cases in which the seller has the power to transfer title. 
C)  even if the seller does not have either possession of or title to the goods,if he has authority to sell the goods for the rightful owner. 
D)  only if the seller is the rightful owner of the goods.

Question 8

Inga runs a Swedish health spa in Connecticut.She orders 100 loofah sponges from a company in California.They are sent "F.O.B.Hartford,Connecticut," but they never arrive at Inga's.What consequence?

Accepted Answer

A)  Inga has to pay anyway since it was a destination contract. 
B)  The California company is required to bear the loss since the sponges had not yet reached the F.O.B.point. 
C)  The California company and Inga will have to split the loss since they did not specify in their contract when the risk of loss would pass to Inga. 
D)  It cannot be determined from the information given who has the risk of loss. 
A)  Inga has to pay anyway since it was a destination contract. 
B)  The California company is required to bear the loss since the sponges had not yet reached the F.O.B.point. 
C)  The California company and Inga will have to split the loss since they did not specify in their contract when the risk of loss would pass to Inga. 
D)  It cannot be determined from the information given who has the risk of loss.

Question 9

Jerry bought a car stereo from SX Company "on approval." The risk of loss passed to Jerry when he took possession of the stereo.

Accepted Answer

A) True 
 B)False

Question 10

Future goods that have not yet been identified and do not yet exist can still be the subject of a present sale.

Accepted Answer

A) True 
 B)False

Question 11

A(n)____ is a delivery of possession of personal property to an agent for sale by the agent.

Accepted Answer

A)  sale on approval 
B)  consignment 
C)  sale or return 
D)  None of these. 
A)  sale on approval 
B)  consignment 
C)  sale or return 
D)  None of these.

Question 12

According to the Code,identification takes place:

Accepted Answer

A)  upon the making of a contract if it is for future goods. 
B)  when the seller ships,marks,or otherwise designates the goods as those to which the contract refers if the contract is for goods that are already existing and identified. 
C)  when the crops are planted or start growing if the contract is for crops to be grown within twelve months. 
D)  when the young animals are born if the contract is for offspring of animals to be born within twelve months. 
A)  upon the making of a contract if it is for future goods. 
B)  when the seller ships,marks,or otherwise designates the goods as those to which the contract refers if the contract is for goods that are already existing and identified. 
C)  when the crops are planted or start growing if the contract is for crops to be grown within twelve months. 
D)  when the young animals are born if the contract is for offspring of animals to be born within twelve months.

Question 13

If the owner of goods entrusts them to a merchant,the merchant can transfer good title to the goods to a buyer in the ordinary course of business even if the original owner does not want to sell the goods.

Accepted Answer

A) True 
 B)False

Question 14

The UCC and the common law are essentially the same in regard to their treatment of risk of loss or damage to identified goods.

Accepted Answer

A) True 
 B)False

Question 15

New Horizons delivers 20 dozen blankets to its agent,Marketall,for sale by Marketall.Marketall maintains a place of business where it sells bedding under its own name.A creditor of Marketall may obtain possession of New Horizons' blankets:

Accepted Answer

A)  under the Code,since a consignment is regarded as a sale or return. 
B)  but cannot prevail against New Horizons because New Horizons keeps title in a consignment until the goods are sold to a third party. 
C)  and will prevail against New Horizons even if Marketall had a sign,in compliance with state law,evidencing New Horizons' ownership interest in the blankets. 
D)  and will prevail against New Horizons even if Marketall can establish that it is generally known by its creditors to be substantially engaged in selling the goods of others. 
A)  under the Code,since a consignment is regarded as a sale or return. 
B)  but cannot prevail against New Horizons because New Horizons keeps title in a consignment until the goods are sold to a third party. 
C)  and will prevail against New Horizons even if Marketall had a sign,in compliance with state law,evidencing New Horizons' ownership interest in the blankets. 
D)  and will prevail against New Horizons even if Marketall can establish that it is generally known by its creditors to be substantially engaged in selling the goods of others.

Question 16

Matthew buys a trampoline for his sons.The transaction is considered a sale of goods under the UCC.

Accepted Answer

A) True 
 B)False

Question 17

If goods are sold and delivered to buyer with an option to return them,the risk is on the buyer until they are returned.

Accepted Answer

A) True 
 B)False

Question 18

Mario,a minor,sells his bicycle to Jimmy for $150.A week later,Kelly,who does not know Mario,buys the bike from Jimmy for $200.Mario,upon learning about Jimmy's sale of the bike,disaffirms his contract with Jimmy.Kelly does not have valid title and must return the bike to Mario.

Accepted Answer

A) True 
 B)False

Question 19

Amanda ordered fifty personalized sweatshirts from King Manufacturing Company.After the shirts were specially imprinted,but before they were mailed,Amanda called King Manufacturing to disavow the contract.The next day the sweatshirts were stolen.Who must bear the loss?

Accepted Answer

A)  Amanda must pay the entire purchase price,because she breached the contract. 
B)  King will have to bear the entire loss,because it had not yet mailed the shirts. 
C)  Amanda must bear the entire loss,because the shirts were identified to the contract. 
D)  King must first seek payment from its insurance carrier,and then collect from Amanda for any amount not covered by insurance. 
A)  Amanda must pay the entire purchase price,because she breached the contract. 
B)  King will have to bear the entire loss,because it had not yet mailed the shirts. 
C)  Amanda must bear the entire loss,because the shirts were identified to the contract. 
D)  King must first seek payment from its insurance carrier,and then collect from Amanda for any amount not covered by insurance.

Question 20

With regard to UCC Article 6,which of the following is true?

Accepted Answer

A)  The 1988 joint recommendation of the National Conference of Commissioners on Uniform State Laws and the American Law Institute was for states to adopt the revised version of Article 6,which the majority of states have done. 
B)  At least 45 states have repealed Article 6. 
C)  Article 60 is a revision of Article 6. 
D)  Article 6 applies to sales of live goods such as cattle,chickens and hogs. 
A)  The 1988 joint recommendation of the National Conference of Commissioners on Uniform State Laws and the American Law Institute was for states to adopt the revised version of Article 6,which the majority of states have done. 
B)  At least 45 states have repealed Article 6. 
C)  Article 60 is a revision of Article 6. 
D)  Article 6 applies to sales of live goods such as cattle,chickens and hogs.

Exam 23: Transfer of Title and Risk of Loss

The seller has an insurable interest in goods even though he no longer owns them if he continues to retain a security interest in them.

Clara obtained a necklace by larceny.If she sells the necklace to Sherry,who is a good faith purchaser for value,Sherry obtains valid title.

Under a shipment contract,the seller passes title to the buyer when the goods arrive.

At common law,the risk of loss or damage to goods identified under a contract of sale falls upon:

A seller has the right to transfer title:

Inga runs a Swedish health spa in Connecticut.She orders 100 loofah sponges from a company in California.They are sent "F.O.B.Hartford,Connecticut," but they never arrive at Inga's.What consequence?

Jerry bought a car stereo from SX Company "on approval." The risk of loss passed to Jerry when he took possession of the stereo.

Future goods that have not yet been identified and do not yet exist can still be the subject of a present sale.

A(n)____ is a delivery of possession of personal property to an agent for sale by the agent.

According to the Code,identification takes place:

If the owner of goods entrusts them to a merchant,the merchant can transfer good title to the goods to a buyer in the ordinary course of business even if the original owner does not want to sell the goods.

The UCC and the common law are essentially the same in regard to their treatment of risk of loss or damage to identified goods.

New Horizons delivers 20 dozen blankets to its agent,Marketall,for sale by Marketall.Marketall maintains a place of business where it sells bedding under its own name.A creditor of Marketall may obtain possession of New Horizons' blankets:

Matthew buys a trampoline for his sons.The transaction is considered a sale of goods under the UCC.

If goods are sold and delivered to buyer with an option to return them,the risk is on the buyer until they are returned.

Mario,a minor,sells his bicycle to Jimmy for $150.A week later,Kelly,who does not know Mario,buys the bike from Jimmy for $200.Mario,upon learning about Jimmy's sale of the bike,disaffirms his contract with Jimmy.Kelly does not have valid title and must return the bike to Mario.

Amanda ordered fifty personalized sweatshirts from King Manufacturing Company.After the shirts were specially imprinted,but before they were mailed,Amanda called King Manufacturing to disavow the contract.The next day the sweatshirts were stolen.Who must bear the loss?

With regard to UCC Article 6,which of the following is true?

Introduction to Law

Business Ethics and the Social Responsibility of Business

Civil Dispute Resolution

Constitutional Law

Administrative Law

A: Administrative Law

Criminal Law

Intentional Torts

Negligence and Strict Liability

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Consideration

Illegal Bargains

Contractual Capacity

Contracts in Writing

Third Parties to Contracts

Performance,breach,and Discharge

Contract Remedies

Relationship of Principal and Agent

Relationship With Third Parties

Introduction to Sales and Leases

Performance

Products Liability: Warranties and Strict Liability in Tort

Sales Remedies

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits,collections,and Funds Transfers

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature,formation,and Powers

Financial Structure

Management Structure

Fundamental Changes

Secured Transactions and Suretyship

Bankruptcy

Protection of Intellectual Property

Antitrust

Consumer Protection Double

Employment Law

Securities Regulation

Accountants Legal Liability

Environmental Law

International Business Law

Introduction to Property,property Insurance,bailments,and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

Trusts and Decedents Estates

Legal Terminology: Understanding Criminal and Civil Law Systems

Contract Law Terminology

Exploring the Legal Concepts of Agency and Fiduciary Duty

Understanding Key Legal Concepts in Sales and Contracts

Understanding the Terminology of Banking and Finance: Key Concepts and Definitions

Exploring Legal Concepts and Processes in Business Partnerships

Understanding Corporate Law: A Guide to Ultra Vires Acts, Subscribers, Debt Securities, and More

Understanding Key Terms in Secured Transactions and Bankruptcy Law

Legal Topics and Terms

Legal Topics in Property Ownership and Management

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