Exam 20: Title and Risk of Loss

In a sales contract, the passage of risk of loss from a seller to a buyer gives the buyer the right to insure the goods.

Risk of loss cannot pass from seller to buyer unless the goods are identified to the contract.

Generally, all contracts are assumed to be destination contracts if nothing to the contrary is stated in the contract.

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

A trucking company that normally issues documents of title for goods it receives is a bailee.

Outdoor Outfitters Store contracts to buy fifty tents from Pitched Camp, Inc. Unless the contract states otherwise, this document is assumed to be

Regional Freight LLC delivers a receipt issued by Storage Warehouse for goods stored in its facility to Transnational Inc., a buyer of the goods. This is

When a bailee is holding goods that are to be delivered under a contract without being moved, risk of loss passes when the bailee acknowledges the buyer's right to the goods.

A seller's title to goods being sold is voidable if the goods

An owner in common of fungible goods can pass title and risk of loss to the buyer only by actually separating the goods.

Identification is one of the concepts involved in determining the rights and liabilities of parties to a sales contract.

EverSafe Corporation in New York sells a truckload of protective suits, masks, and other safety gear to Foundry Inc. in Connecticut, "F.O.B. New York." EverSafe arranges with Go Truckline to transport the goods. The cost of the transport will be paid by