Exam 20: Title and Risk of Loss

Quest Outdoor Store orders a specified size of RiverRun-brand rafts from Sports Merchandise, Inc. Sports Merchandise mistakenly ships rafts of the wrong size, which Quest rejects and returns via Trans-State Shipping. During the return, the rafts are lost. The loss is suffered by

If a person buys cattle at a livestock auction, unless the parties agree otherwise, title will pass to the buyer when the cattle are physically delivered.

In a destination contract, risk of loss passes to the buyer or lessee when the goods are delivered to the carrier.

If the seller is not a merchant, and the goods are being held by the seller for the buyer to pick up, the risk of loss passes to a buyer on identification.

Sure Good Appliance Corporation contracts with Trucking Company to take a selection of appliances to United Railroad Inc. for United to transport the goods to a VeriSafe Company warehouse. Trucking, United, and VeriSafe each acknowledge possession of the goods by a document of title. These parties are

Growers Mart buys one hundred cases of berries from Hilltop Farm. The parties agree that the berries will be transported "F.O.B. Hilltop Farm" via Intrastate Trucking Company. Intrastate's truck and the berries are lost in a fire following an accident. The loss of the berries is suffered by

Spuds Corporation buys from Tater Farm Inc. a potato crop that Tater plans to plant and harvest during the next growing season. Spuds plans to sell the potatoes to Tasty Food Restaurant. After the potatoes are planted, but before they are harvested, an insurable interest in the crop exists in

Brad leaves an iPod at Computer Sales & Repair (CSR) to have the battery replaced. CSR sells the iPod to Doris, who does not know that it belongs to Brad. Brad can recover from

Identification is not significant for the buyer or lessee.

Commercial Rents Corporation agrees to lease a pressure washer to Delivery Trucks Inc., which agrees to pick it up at E Street Warehouse. Before Delivery Trucks retrieves the washer, it is stolen. The loss is suffered by

Identification is the express designation of the goods provided for in a contract.

When a buyer breaches a contract, risk of loss remains with or reverts to the seller.

On a contract-"F.O.B. New York"-for a sale of almonds by a broker in California, the risk of loss passes to the buyer when conforming goods are placed in the possession of the carrier.

Buyers and lessees have an insurable interest in identified goods.

If the contract calls for the sale or lease of specific goods that are already in existence, identification takes place when the goods are shipped.

Organic Café orders five gallons of PureMaid-brand olive oil from Quico Oil Inc. Quico mistakenly ships Pure soy oil, which Organic keeps, despite the nonconformity. The oil is destroyed in a fire. The loss is suffered by

Liz buys a Miata from Nate's Mazda, paying with a check that is later dishonored. Liz offers to sell the car to Ogden for cash. With respect to this offer, Liz's title to the car is

In most situations involving sales or leases, rights and liabilities are generally not determined by who has title to the goods.

Eve buys from Fiesta Autos a used pick-up truck. The truck was manufactured by GEM Vehicles, Inc., and previously owned by Hal. Regarding title to the truck, Eve acquires

If a lessor is a merchant who is holding the goods for the buyer to pick up, the risk of loss passes to a lessee when the lessee takes physical possession of the goods.