Question 1

The UCC looks solely upon "title" to determine ownership in goods.

Accepted Answer

A) True 
 B)False

Question 2

Tuan,Inc.contracted to buy 200 monogrammed blankets from Titex,Inc.Before Titex segregated and monogrammed the blankets,Tuan filed for bankruptcy.Tuan does not own title to the blankets because

Accepted Answer

A) Tuan is a merchant. 
B) the blankets were not identified to the contract. 
C) Tuan became bankrupt after the contract was formed. 
D) the goods were specially manufactured. 
A) Tuan is a merchant. 
B) the blankets were not identified to the contract. 
C) Tuan became bankrupt after the contract was formed. 
D) the goods were specially manufactured.

Question 3

Marco Manufacturing contracted to sell Kurtz Industries 3,000 iron clasps.The contract specified: F.O.B.Kurtz Industries.Upon arrival and inspection,the goods were rejected by Kurtz Industries because they did not conform to the contract specifications.In transit back to Marco Manufacturing,the common carrier's truck overturned and completely destroyed the clasps.Which statement is correct?

Accepted Answer

A) Marco may sue Kurtz for the contract price, as risk of loss transferred to Kurtz at the F.O.B.point. 
B) Kurtz will not be liable for the purchase price. The risk of loss had not yet transferred since the goods were nonconforming. 
C) The loss will be split between the parties upon a 50/50 basis. 
D) The loss will be assigned to the party who could best bear the loss. 
A) Marco may sue Kurtz for the contract price, as risk of loss transferred to Kurtz at the F.O.B.point. 
B) Kurtz will not be liable for the purchase price. The risk of loss had not yet transferred since the goods were nonconforming. 
C) The loss will be split between the parties upon a 50/50 basis. 
D) The loss will be assigned to the party who could best bear the loss.

Question 4

Both the buyer and seller may have an insurable interest in the same goods at the same time.

Accepted Answer

A) True 
 B)False

Question 5

You leave your watch with Bryte Jewelers for repair.Bryte could not transfer ownership interests in the watch to a customer of the jewelry shop without your permission.

Accepted Answer

A) True 
 B)False

Question 6

The buyer of a product is located in Des Moines,Iowa and the seller is located in Sacramento,California.The contract specifies F.O.B.Des Moines.What type of contract is this?

Accepted Answer

A) A destination contract 
B) A mixed contract 
C) A shipment contract 
D) A carrier contract 
A) A destination contract 
B) A mixed contract 
C) A shipment contract 
D) A carrier contract

Question 7

Which of the following warranties provides that the goods will be useable for the ordinary purposes for which they are used?

Accepted Answer

A) Disclaimer 
B) Fitness for a particular purpose 
C) Merchantability 
D) Title 
A) Disclaimer 
B) Fitness for a particular purpose 
C) Merchantability 
D) Title

Question 8

Baker Furniture sold 50 living room sets to King's Department Store.The parties did not agree on passage of title,but the delivery term was F.O.B.place of shipment.Discuss title and risk of loss regarding the furniture.

Accepted Answer

Since the goods are to be moved,title pa

Question 9

Ruppart Manufacturing has a contract for the sale of 100 cases of teaching supplies to Teachers Co-op,Inc.Payment of the order is to be made in installments over the next year.Ruppart Manufacturing keeps a security interest in the cases sold to assure payment by Teachers Co-op,Inc.When the order is completed,Ruppart ships the order.Legally

Accepted Answer

A) both Ruppart and Teachers have an insurable interest in the supplies. 
B) only Ruppart has an insurable interest in the supplies. 
C) only Teachers has an insurable interest in the supplies. 
D) neither Ruppart nor Teachers has an insurable interest in the supplies. 
A) both Ruppart and Teachers have an insurable interest in the supplies. 
B) only Ruppart has an insurable interest in the supplies. 
C) only Teachers has an insurable interest in the supplies. 
D) neither Ruppart nor Teachers has an insurable interest in the supplies.

Question 10

Mark,a power tool salesman,promises Jill,a customer,that the Turbo Power Hedge Trimmer 1000 will easily cut through bamboo up to 3 inches thick.Mark's statement constitutes an express warranty if Jill purchases the hedge trimmer.

Accepted Answer

A) True 
 B)False

Question 11

A buyer obtains an insurable interest when the goods are identified to the contract.

Accepted Answer

A) True 
 B)False

Question 12

A sales representative at Oxtren,Inc.orally told the purchasing agent at Wety,Inc.that its industrial saw is exceptional.Which statement is correct concerning the claim that the saw is exceptional?

Accepted Answer

A) The claim is an express warranty. 
B) The claim is an implied warranty of merchantability. 
C) The claim is not a warranty because it is not in writing. 
D) The claim is not a warranty because it is sales puffery. 
A) The claim is an express warranty. 
B) The claim is an implied warranty of merchantability. 
C) The claim is not a warranty because it is not in writing. 
D) The claim is not a warranty because it is sales puffery.

Question 13

Crytrin Manufacturing,Inc.contracted with Molfrey,Inc.to manufacture three large pieces of equipment.The contract contained a clause stating that Crytrin agreed to repair or replace any defective equipment,but that was the only remedy Molfry would have.This clause

Accepted Answer

A) is an effective disclaimer. 
B) will not keep Molfry from obtaining consequential damages since, under the UCC, consequential damages cannot be excluded. 
C) is a limitation of remedy clause, which limits or excludes normal remedies permitted under the UCC. 
D) limits any express warranties made by Crytrin. 
A) is an effective disclaimer. 
B) will not keep Molfry from obtaining consequential damages since, under the UCC, consequential damages cannot be excluded. 
C) is a limitation of remedy clause, which limits or excludes normal remedies permitted under the UCC. 
D) limits any express warranties made by Crytrin.

Question 14

If a seller includes an express warranty in the written sales contract,any disclaimer is invalid.

Accepted Answer

A) True 
 B)False

Question 15

Alice's Aspirin Inc.,produces and packages aspirin for sale to retail stores.Bob buys a bottle of Alice's aspirin at Dahl's Food Stores.Two days later Bob takes two aspirin and within minutes,becomes very ill and is rushed to the hospital,where it is found that a defect in the aspirin caused the reaction.Which of the following is correct?

Accepted Answer

A) Bob can sue both Alice's Aspirin Inc.and Dahl's because he suffered personal injury due to the defective product. 
B) Bob cannot sue anyone because he assumed the risk of taking the aspirin. 
C) Bob cannot sue anyone because he is not in privity with Dahl's or Alice's. 
D) Bob can sue but will not be able to recover consequential damages for his medical expenses. 
A) Bob can sue both Alice's Aspirin Inc.and Dahl's because he suffered personal injury due to the defective product. 
B) Bob cannot sue anyone because he assumed the risk of taking the aspirin. 
C) Bob cannot sue anyone because he is not in privity with Dahl's or Alice's. 
D) Bob can sue but will not be able to recover consequential damages for his medical expenses.

Question 16

In a shipment contract,the risk passes to the buyer when the goods are properly tendered at the destination point.

Accepted Answer

A) True 
 B)False

Question 17

A tag attached to a tree in a nursery identifying the tree as a Southern Magnolia creates an express warranty.

Accepted Answer

A) True 
 B)False

Question 18

The term F.O.B.:

Accepted Answer

A) can indicate a destination or shipment contract. 
B) stands for "freight on board." 
C) requires the seller to insure the goods for the buyer's benefit. 
D) shifts the risk of loss to the buyer when the goods are identified. 
A) can indicate a destination or shipment contract. 
B) stands for "freight on board." 
C) requires the seller to insure the goods for the buyer's benefit. 
D) shifts the risk of loss to the buyer when the goods are identified.

Question 19

Generally,a contract may include language that limits or alters the damages recoverable for a breach of warranty,as long as the restrictions are not unconscionable.

Accepted Answer

A) True 
 B)False

Question 20

In January,Eddie contracts to sell 100 bushels of soybeans in the fall.This contract

Accepted Answer

A) is void.He cannot contract to sell a crop before it is even planted; the goods must be in existence. 
B) is void. The soybeans must be identified to the contract at the time he contracts to sell them. 
C) can be valid; but title to the soybeans cannot pass until the soybeans exist. 
D) can be valid, and title to the soybeans passes when the contract is signed. 
A) is void.He cannot contract to sell a crop before it is even planted; the goods must be in existence. 
B) is void. The soybeans must be identified to the contract at the time he contracts to sell them. 
C) can be valid; but title to the soybeans cannot pass until the soybeans exist. 
D) can be valid, and title to the soybeans passes when the contract is signed.

Exam 22: Ownership, Risk and Warranties

The UCC looks solely upon "title" to determine ownership in goods.

Tuan,Inc.contracted to buy 200 monogrammed blankets from Titex,Inc.Before Titex segregated and monogrammed the blankets,Tuan filed for bankruptcy.Tuan does not own title to the blankets because

Both the buyer and seller may have an insurable interest in the same goods at the same time.

You leave your watch with Bryte Jewelers for repair.Bryte could not transfer ownership interests in the watch to a customer of the jewelry shop without your permission.

The buyer of a product is located in Des Moines,Iowa and the seller is located in Sacramento,California.The contract specifies F.O.B.Des Moines.What type of contract is this?

Which of the following warranties provides that the goods will be useable for the ordinary purposes for which they are used?

Baker Furniture sold 50 living room sets to King's Department Store.The parties did not agree on passage of title,but the delivery term was F.O.B.place of shipment.Discuss title and risk of loss regarding the furniture.

Mark,a power tool salesman,promises Jill,a customer,that the Turbo Power Hedge Trimmer 1000 will easily cut through bamboo up to 3 inches thick.Mark's statement constitutes an express warranty if Jill purchases the hedge trimmer.

A buyer obtains an insurable interest when the goods are identified to the contract.

A sales representative at Oxtren,Inc.orally told the purchasing agent at Wety,Inc.that its industrial saw is exceptional.Which statement is correct concerning the claim that the saw is exceptional?

Crytrin Manufacturing,Inc.contracted with Molfrey,Inc.to manufacture three large pieces of equipment.The contract contained a clause stating that Crytrin agreed to repair or replace any defective equipment,but that was the only remedy Molfry would have.This clause

If a seller includes an express warranty in the written sales contract,any disclaimer is invalid.

In a shipment contract,the risk passes to the buyer when the goods are properly tendered at the destination point.

A tag attached to a tree in a nursery identifying the tree as a Southern Magnolia creates an express warranty.

The term F.O.B.:

Generally,a contract may include language that limits or alters the damages recoverable for a breach of warranty,as long as the restrictions are not unconscionable.

In January,Eddie contracts to sell 100 bushels of soybeans in the fall.This contract

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