Question 1

In a lease of personal property, title does not pass.

Accepted Answer

A) True 
 B)False

Question 2

Ralph buys a bicycle for his son.The transaction is considered a sale of goods under the UCC.

Accepted Answer

A) True 
 B)False

Question 3

Mark, a college student, agreed to sell his horse to Henry for $1,000.The contract required Mark to take the horse on that same day to Idlewild Stables where Henry was going to board the horse.Henry paid Mark the money, patted the horse and said, "I'm glad you're mine, you beauty," and drove off.Mark then led the horse into the trailer and set off for the two-hour drive to Idlewild.Has there been a sale?

Accepted Answer

A) No, not until delivery to Idlewild. 
B) No, not until Henry sees the horse again. 
C) Yes, since Henry already paid for it. 
D) Yes, since the contract was made earlier in the day. 
A) No, not until delivery to Idlewild. 
B) No, not until Henry sees the horse again. 
C) Yes, since Henry already paid for it. 
D) Yes, since the contract was made earlier in the day.

Question 4

The seller and buyer of goods agree that identification will be made by the seller when it manufactures and separates those particular goods out for the buyer.Identification will actually occur:

Accepted Answer

A) at the time and in the manner agreed upon by the parties. 
B) according to Code Section 2-501, upon the making of the contract of sale. 
C) when the buyer points out the particular goods it wants; the seller cannot identify goods. 
D) when the goods are tendered to the carrier for shipment to the buyer. 
A) at the time and in the manner agreed upon by the parties. 
B) according to Code Section 2-501, upon the making of the contract of sale. 
C) when the buyer points out the particular goods it wants; the seller cannot identify goods. 
D) when the goods are tendered to the carrier for shipment to the buyer.

Question 5

Brett contracts to purchase a particular automobile from Johnson's car lot.At what point does Brett obtain a special property interest that enables him to insure the car?

Accepted Answer

A) When the car is tendered to Brett 
B) When the contract is made 
C) When Brett pays for the car 
D) When Brett accepts the car 
A) When the car is tendered to Brett 
B) When the contract is made 
C) When Brett pays for the car 
D) When Brett accepts the car

Question 6

Which of the following is true regarding identification of the goods under Article 2?

Accepted Answer

A) Only the buyer can identify the goods. 
B) Identification of existing goods gives the buyer a special property interest. 
C) Fungible goods are identified when the seller separates the contracted units from the whole. 
D) All of these are correct. 
A) Only the buyer can identify the goods. 
B) Identification of existing goods gives the buyer a special property interest. 
C) Fungible goods are identified when the seller separates the contracted units from the whole. 
D) All of these are correct.

Question 7

Under the CISG:

Accepted Answer

A) loss of or damage to the goods after the risk of loss has passed to the buyer does not discharge the buyer from the obligation to pay the purchase price. 
B) loss of or damage to the goods after the risk of loss has passed to the buyer discharges the buyer from the obligation to pay the purchase price. 
C) if the buyer is bound to take over the goods at a place other than the seller's place of business, the risk of loss passes when the goods arrive at that location. 
D) if the sales contract does not involve the carriage of the goods, the risk of loss passes to the buyer as soon as the goods are placed at his disposal, regardless of the amount of time it takes him to take possession. 
A) loss of or damage to the goods after the risk of loss has passed to the buyer does not discharge the buyer from the obligation to pay the purchase price. 
B) loss of or damage to the goods after the risk of loss has passed to the buyer discharges the buyer from the obligation to pay the purchase price. 
C) if the buyer is bound to take over the goods at a place other than the seller's place of business, the risk of loss passes when the goods arrive at that location. 
D) if the sales contract does not involve the carriage of the goods, the risk of loss passes to the buyer as soon as the goods are placed at his disposal, regardless of the amount of time it takes him to take possession.

Question 8

Tom makes pottery in his spare time.Jackie asks if he'd sell her a particular covered bowl.Later that day, he telephones her and says she can have it for $50.She agrees, so he tells her he'll wrap it up for her and it will be ready in half an hour.Six days later, Jackie had not yet come for the bowl when a dog knocks the box off the shelf and breaks the bowl.Who is liable?

Accepted Answer

A) Tom, because he is a merchant regarding the pottery and Jackie had not yet received the bowl 
B) Tom, because the bowl was in his possession when the dog broke it 
C) Jackie, because she had identified the bowl 
D) Jackie, because Tom had it ready for her to pick up for nearly a week 
A) Tom, because he is a merchant regarding the pottery and Jackie had not yet received the bowl 
B) Tom, because the bowl was in his possession when the dog broke it 
C) Jackie, because she had identified the bowl 
D) Jackie, because Tom had it ready for her to pick up for nearly a week

Question 9

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 10

A sale exists when the buyer takes:

Accepted Answer

A) title to the goods. 
B) the risk of loss on the goods. 
C) an insurable interest in the goods. 
D) a special property interest in the goods. 
A) title to the goods. 
B) the risk of loss on the goods. 
C) an insurable interest in the goods. 
D) a special property interest in the goods.

Question 11

Which of the following is/are required for a valid tender under the Code? The seller must:

Accepted Answer

A) put and hold conforming goods at the buyer's disposition. 
B) give notice to the buyer that the goods are available. 
C) give notice at a reasonable time and keep the goods available for a reasonable period of time. 
D) All of these are required. 
A) put and hold conforming goods at the buyer's disposition. 
B) give notice to the buyer that the goods are available. 
C) give notice at a reasonable time and keep the goods available for a reasonable period of time. 
D) All of these are required.

Question 12

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

Question 13

A major purpose of the bulk sales provisions of the Code is to protect the seller's creditors.

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

Mary orders a dress for $1,000.Mary doesn't inspect the dress on arrival and therefore doesn't discover a flaw in the fabric until the day before she is to wear it to her first board meeting as president of Tri-State Engineering.This is a month after the dress arrived.She calls the designer and sends the dress back, but it is lost in the mail.Mary's insurance would cover $400 of the loss.The designer's insurance would cover $900.Who is liable?

Accepted Answer

A) Mary will bear the whole loss because she accepted the goods. 
B) The designer will bear the whole loss because Mary returned the nonconforming goods. 
C) Mary will owe $100; the designer, $900. 
D) The risk is Mary's to the extent of $400. 
A) Mary will bear the whole loss because she accepted the goods. 
B) The designer will bear the whole loss because Mary returned the nonconforming goods. 
C) Mary will owe $100; the designer, $900. 
D) The risk is Mary's to the extent of $400.

Question 16

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) All of these. 
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) All of these.

Question 17

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 18

The bulk sales portion of the Code applies only to transfers in the ordinary course of business.

Accepted Answer

A) True 
 B)False

Question 19

Discuss who has the risk of loss in the absence of a breach in a destination contract for the sale of goods.Also discuss the effect of an agreement of the parties.

Accepted Answer

In a destination contract, the seller ha

Question 20

Except in a finance lease, the risk of loss passes to the lessee in a lease of personal property.

Accepted Answer

A) True 
 B)False

Exam 23: Transfer of Title and Risk of Loss

In a lease of personal property, title does not pass.

Ralph buys a bicycle for his son.The transaction is considered a sale of goods under the UCC.

The seller and buyer of goods agree that identification will be made by the seller when it manufactures and separates those particular goods out for the buyer.Identification will actually occur:

Brett contracts to purchase a particular automobile from Johnson's car lot.At what point does Brett obtain a special property interest that enables him to insure the car?

Which of the following is true regarding identification of the goods under Article 2?

Under the CISG:

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?

A sale exists when the buyer takes:

Which of the following is/are required for a valid tender under the Code? The seller must:

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.

A major purpose of the bulk sales provisions of the Code is to protect the seller's creditors.

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

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

The bulk sales portion of the Code applies only to transfers in the ordinary course of business.

Discuss who has the risk of loss in the absence of a breach in a destination contract for the sale of goods.Also discuss the effect of an agreement of the parties.

Except in a finance lease, the risk of loss passes to the lessee in a lease of personal property.

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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