Question 1

An entrusted merchant has the power to transfer all rights in the goods to a buyer in the ordinary course of business.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is an example of delivery of goods without moving them?

Accepted Answer

A) a contract requiring a document of title 
B) a shipment contract 
C) a destination contract 
D) a contract with the term ex-ship 
A) a contract requiring a document of title 
B) a shipment contract 
C) a destination contract 
D) a contract with the term ex-ship

Question 3

When is a buyer in breach of a sales contract?

Accepted Answer

A buyer breaches a sales contract if he

Question 4

Which of the following is a good faith purchaser?

Accepted Answer

A) a person who buys goods from a person with a voidable title 
B) a person who buys stolen goods without being aware of it 
C) a buyer who agrees to hold goods for a person till the delivery of the goods is made 
D) a buyer to whom goods are delivered by a seller to sell on the seller's behalf 
A) a person who buys goods from a person with a voidable title 
B) a person who buys stolen goods without being aware of it 
C) a buyer who agrees to hold goods for a person till the delivery of the goods is made 
D) a buyer to whom goods are delivered by a seller to sell on the seller's behalf

Question 5

Which of the following is true of a destination contract containing a "no-arrival, no-sale" clause?

Accepted Answer

A) The seller is required to bear the expense and risk during transportation. 
B) The seller is required to replace any goods lost in transit. 
C) The buyer does not have to pay for destroyed goods. 
D) The risk of loss passes once the shipping has been arranged. 
A) The seller is required to bear the expense and risk during transportation. 
B) The seller is required to replace any goods lost in transit. 
C) The buyer does not have to pay for destroyed goods. 
D) The risk of loss passes once the shipping has been arranged.

Question 6

In a sale or return contract, the risk of loss and title is with the seller even when the buyer takes possession of the goods.

Accepted Answer

A) True 
 B)False

Question 7

Article 2 of the UCC adopts rules for risk of loss that are closely tied to title.

Accepted Answer

A) True 
 B)False

Question 8

Steve brings his watch to Knell Watches to be repaired.Knell Watches sells and repairs watches.Steve entrusts his watch at Knells' until it is repaired.The watch store repairs the watch, but then sells it to Kevin, who buys the watch with a fraudulent check that bounced.Kevin then resells the watch to his friend Jonathan, who is unaware of the stolen nature of the watch.
-Who can legally claim ownership over the watch in court?

Accepted Answer

A) Jonathan 
B) Steve 
C) Knell Watches 
D) Kevin 
A) Jonathan 
B) Steve 
C) Knell Watches 
D) Kevin

Question 9

A title for goods obtained by a seller through fraud, impersonation, or a dishonored check is referred to as a ________.

Accepted Answer

A) unenforceable title 
B) voidable title 
C) conditional title 
D) unequivocal title 
A) unenforceable title 
B) voidable title 
C) conditional title 
D) unequivocal title

Question 10

The ________ bears the risk of loss during transportation in a destination contract.

Accepted Answer

A) buyer 
B) seller 
C) carrier 
D) shipper 
A) buyer 
B) seller 
C) carrier 
D) shipper

Question 11

In a sale on approval, the risk of loss and title to the goods remain with seller till the buyer's acceptance.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following would contain the term "no-arrival, no-sale" in their contract?

Accepted Answer

A) shipment contract 
B) destination contract 
C) a contract to sell real estate 
D) consignment contract 
A) shipment contract 
B) destination contract 
C) a contract to sell real estate 
D) consignment contract

Question 13

An undeveloped real estate property is an example of future goods.

Accepted Answer

A) True 
 B)False

Question 14

The bailee acquires the title to the goods when the goods are in his or her possession.

Accepted Answer

A) True 
 B)False

Question 15

The term "Ex-ship" requires the seller to bear the expense and risk of loss until the goods are unloaded from the ship at its port of destination.

Accepted Answer

A) True 
 B)False

Question 16

A document of title requires the seller to deliver the goods at the buyer's destination.

Accepted Answer

A) True 
 B)False

Question 17

In a case in which a buyer purchases goods from a thief who has stolen them, the purchaser does not acquire title to the goods.

Accepted Answer

A) True 
 B)False

Question 18

What is the role of a financing statement in a consignment if the consignor files it?

Accepted Answer

A) It protects the consignor from bearing a risk of loss for the goods. 
B) It protects the consignor from possible payment revocation by the consignee. 
C) It gives the buyer's creditors claim over the goods. 
D) It gives the seller's creditors claim over the goods. 
A) It protects the consignor from bearing a risk of loss for the goods. 
B) It protects the consignor from possible payment revocation by the consignee. 
C) It gives the buyer's creditors claim over the goods. 
D) It gives the seller's creditors claim over the goods.

Question 19

A(n)________ involves the seller entrusting possession of goods to a buyer on a trial basis.

Accepted Answer

A) destination contract 
B) option contract 
C) unequivocal transaction 
D) conditional sale 
A) destination contract 
B) option contract 
C) unequivocal transaction 
D) conditional sale

Question 20

The delivery term of "no-arrival, no-sale" can be added to a shipment contract.

Accepted Answer

A) True 
 B)False

Exam 19: Title to Goods and Risk of Loss

An entrusted merchant has the power to transfer all rights in the goods to a buyer in the ordinary course of business.

Which of the following is an example of delivery of goods without moving them?

When is a buyer in breach of a sales contract?

Which of the following is a good faith purchaser?

Which of the following is true of a destination contract containing a "no-arrival, no-sale" clause?

In a sale or return contract, the risk of loss and title is with the seller even when the buyer takes possession of the goods.

Article 2 of the UCC adopts rules for risk of loss that are closely tied to title.

A title for goods obtained by a seller through fraud, impersonation, or a dishonored check is referred to as a ________.

The ________ bears the risk of loss during transportation in a destination contract.

In a sale on approval, the risk of loss and title to the goods remain with seller till the buyer's acceptance.

Which of the following would contain the term "no-arrival, no-sale" in their contract?

An undeveloped real estate property is an example of future goods.

The bailee acquires the title to the goods when the goods are in his or her possession.

The term "Ex-ship" requires the seller to bear the expense and risk of loss until the goods are unloaded from the ship at its port of destination.

A document of title requires the seller to deliver the goods at the buyer's destination.

In a case in which a buyer purchases goods from a thief who has stolen them, the purchaser does not acquire title to the goods.

What is the role of a financing statement in a consignment if the consignor files it?

A(n)________ involves the seller entrusting possession of goods to a buyer on a trial basis.

The delivery term of "no-arrival, no-sale" can be added to a shipment contract.

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