Question 1

Jerry bought a 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 2

Future goods can be the subject of a present sale.

Accepted Answer

A) True 
 B)False

Question 3

The UCC "risk of loss" rules depend on transfer of title.

Accepted Answer

A) True 
 B)False

Question 4

Given a transaction involving two innocent persons, the true owner and the good faith purchaser for value, the law will not disturb the legal title but will rule in favor of the one who has it.

Accepted Answer

A) True 
 B)False

Question 5

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 6

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

Accepted Answer

A) True 
 B)False

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

Community Hospital in Atlanta entered into a contract to buy delicate lab equipment from D & D Company in Denver.The contract states shipping terms as FOB, Denver.While in transit the equipment was damaged beyond repair by the carrier, Fly-by-Nite Air Lines.The carrier is in weak financial condition and refused to pay for the equipment.In this case:

Accepted Answer

A) D & D Company must replace the equipment at no cost to the hospital. 
B) Community Hospital has risk of loss. 
C) D & D Company and Community Hospital will share the loss equally. 
D) risk of loss will depend on which party chose Fly-by-Nite as the carrier. 
A) D & D Company must replace the equipment at no cost to the hospital. 
B) Community Hospital has risk of loss. 
C) D & D Company and Community Hospital will share the loss equally. 
D) risk of loss will depend on which party chose Fly-by-Nite as the carrier.

Question 9

Brenda agrees to lease a new car from Hyland Motors.Which of the following statements is true?

Accepted Answer

A) Brenda has no insurable interest in the car. 
B) Brenda receives title at the time of her contract with Hyland Motors. 
C) Hyland Motors retains an insurable interest in the car unless and until Brenda exercises an option to buy the car. 
D) None of the above. 
A) Brenda has no insurable interest in the car. 
B) Brenda receives title at the time of her contract with Hyland Motors. 
C) Hyland Motors retains an insurable interest in the car unless and until Brenda exercises an option to buy the car. 
D) None of the above.

Question 10

The distinction between a void and voidable title is not important in determining the rights of good faith purchasers of goods.

Accepted Answer

A) True 
 B)False

Question 11

Although he knows the ring is really valuable, Alex tells Mona her ring contains artificial gems, but he would be willing to buy it for $50.Mona agrees.Alex quickly takes the ring to Hanna's Antique Jewelry Shop and sells it for
$1,000.A month later, Mona sees her ring on sale for $2,000 at the shop.Is Mona entitled to get the ring back?

Accepted Answer

A) Yes, she is the true owner of the ring since she was defrauded. 
B) Yes, since Alex had void title to the ring. 
C) No, since Alex had voidable title to the ring and Hanna was a good faith purchaser. 
D) No, since Mona was an entruster. 
A) Yes, she is the true owner of the ring since she was defrauded. 
B) Yes, since Alex had void title to the ring. 
C) No, since Alex had voidable title to the ring and Hanna was a good faith purchaser. 
D) No, since Mona was an entruster.

Question 12

The buyer and seller of goods may not simultaneously hold insurable interests in the goods.

Accepted Answer

A) True 
 B)False

Question 13

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 14

If goods are fungible, identification of a share of undivided goods occurs when the parties enter into the contract.

Accepted Answer

A) True 
 B)False

Question 15

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 16

Kollenberg's sold a substantial part of its equipment to Castillo Brothers.Nothing else was involved in the sale.The
sale of the equipment is a bulk transfer under the Code.

Accepted Answer

A) True 
 B)False

Question 17

Identification may be made by either the seller or the buyer.

Accepted Answer

A) True 
 B)False

Question 18

The Code has expanded the rights of good faith purchasers with respect to sales by minors.

Accepted Answer

A) True 
 B)False

Question 19

Property law protects existing ownership of goods.A principal belief underlying this policy is:

Accepted Answer

A) a person should not be required to retain constant possession of all the goods he owns, yet at the same time, ownership should be indicated by who is in possession of the goods. 
B) while a person should not be required to retain constant possession of all the goods he owns, there must be a method for good faith purchasers for value to be protected so they may make safe acquisitions of goods. 
C) even good faith purchasers should be held responsible for making sure the item they are buying wasn't stolen from the rightful owner. 
D) there must not be conflicts among underlying beliefs. 
A) a person should not be required to retain constant possession of all the goods he owns, yet at the same time, ownership should be indicated by who is in possession of the goods. 
B) while a person should not be required to retain constant possession of all the goods he owns, there must be a method for good faith purchasers for value to be protected so they may make safe acquisitions of goods. 
C) even good faith purchasers should be held responsible for making sure the item they are buying wasn't stolen from the rightful owner. 
D) there must not be conflicts among underlying beliefs.

Question 20

If a contract is not clearly a destination or a shipment contract, the law assumes that it is a shipment contract.

Accepted Answer

A) True 
 B)False

Exam 23: Transfer of Title and Risk of Loss

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

Future goods can be the subject of a present sale.

The UCC "risk of loss" rules depend on transfer of title.

Given a transaction involving two innocent persons, the true owner and the good faith purchaser for value, the law will not disturb the legal title but will rule in favor of the one who has it.

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:

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

A seller has the right to transfer title:

Brenda agrees to lease a new car from Hyland Motors.Which of the following statements is true?

The distinction between a void and voidable title is not important in determining the rights of good faith purchasers of goods.

The buyer and seller of goods may not simultaneously hold insurable interests in the goods.

According to the Code, identification takes place:

If goods are fungible, identification of a share of undivided goods occurs when the parties enter into the contract.

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

Kollenberg's sold a substantial part of its equipment to Castillo Brothers.Nothing else was involved in the sale.The sale of the equipment is a bulk transfer under the Code.

Identification may be made by either the seller or the buyer.

The Code has expanded the rights of good faith purchasers with respect to sales by minors.

Property law protects existing ownership of goods.A principal belief underlying this policy is:

If a contract is not clearly a destination or a shipment contract, the law assumes that it is a shipment contract.

Introduction to Law

Business Ethics and the Social Responsibility of Business

Civil Dispute Resolution

Constitutional Law

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

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

51: The Legal Environment Of Business

52: Contracts.

53: Agency.

54: Sales

55: Negotiable Instruments

56: Unincorporated Business Association

57: Corporations

58: Debtor and Creditor Relation

59: Regulation of Business

60: Property.

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