Question 1

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

Accepted Answer

A) a bill of lading. 
B) a destination contract. 
C) a shipment contract. 
D) a warehouse receipt. 
A) a bill of lading. 
B) a destination contract. 
C) a shipment contract. 
D) a warehouse receipt.

Question 2

Confection Corporation orders Double Chocolate Bars from Edible Distribution Company. Edible identifies the goods. Before they are shipped via Fast Shipping LLC, an insurable interest in the goods exists in

Accepted Answer

A) Confection only. 
B) Edible only. 
C) both Confection and Edible. 
D) Confection, Edible, and Fast. 
A) Confection only. 
B) Edible only. 
C) both Confection and Edible. 
D) Confection, Edible, and Fast.

Question 3

Growers Mart buys one hundred cases of berries from Hilltop Farm. The parties agree that the berries will be transported "F.O.B. Hilltop Farm" via Intrastate Trucking Company. Intrastate's truck and the berries are lost in a fire following an accident. The loss of the berries is suffered by

Accepted Answer

A) Growers. 
B) Hilltop. 
C) Intrastate. 
D) all of the parties as owners in common in equal measure. 
A) Growers. 
B) Hilltop. 
C) Intrastate. 
D) all of the parties as owners in common in equal measure.

Question 4

Roofing Contractor LLC buys roof tiles from Shingles Inc. The parties agree that the tiles will be shipped "F.O.B. Shingles" to Roofing via Tristate Shipping Corporation. The goods are lost in transit. The loss is suffered by

Accepted Answer

A) Tristate. 
B) Shingles. 
C) Roofing. 
D) consumers by an increase in the prices of tiles and shipping. 
A) Tristate. 
B) Shingles. 
C) Roofing. 
D) consumers by an increase in the prices of tiles and shipping.

Question 5

If the contract calls for the sale or lease of specific goods that are already in existence, identification takes place when the goods are shipped.

Accepted Answer

A) True 
 B)False

Question 6

Barley that fills Cultivator Co-op's silo is fungible if the grain is

Accepted Answer

A) alike naturally, by agreement, or by trade usage. 
B) fundamentally different. 
C) good, edible, and marketable. 
D) rotting due to a fungus caused by a leaky roof and a delay in shipping. 
A) alike naturally, by agreement, or by trade usage. 
B) fundamentally different. 
C) good, edible, and marketable. 
D) rotting due to a fungus caused by a leaky roof and a delay in shipping.

Question 7

Spuds Corporation buys from Tater Farm Inc. a potato crop that Tater plans to plant and harvest during the next growing season. Spuds plans to sell the potatoes to Tasty Food Restaurant. After the potatoes are planted, but before they are harvested, an insurable interest in the crop exists in

Accepted Answer

A) Spuds and Tater, but not Tasty. 
B) Spuds, Tater, and Tasty. 
C) Tater only. 
D) none of the choices. 
A) Spuds and Tater, but not Tasty. 
B) Spuds, Tater, and Tasty. 
C) Tater only. 
D) none of the choices.

Question 8

United Wear Inc. and Winter Gear stores enter into a contract for a sale of coats. Their contract can indicate that the price includes transportation costs to a specific destination by including the term

Accepted Answer

A) 
C) I.F. 
B) delivery ex-ship. 
C) F)A.S. 
D) F)O.B. 
A) 
C) I.F. 
B) delivery ex-ship. 
C) F)A.S. 
D) F)O.B.

Question 9

When a buyer breaches a contract, risk of loss remains with or reverts to the seller.

Accepted Answer

A) True 
 B)False

Question 10

Buyers and lessees have an insurable interest in identified goods.

Accepted Answer

A) True 
 B)False

Question 11

Generally, the party in breach of a sales contract bears the risk of loss.

Accepted Answer

A) True 
 B)False

Question 12

Sure Good Appliance Corporation contracts with Trucking Company to take a selection of appliances to United Railroad Inc. for United to transport the goods to a VeriSafe Company warehouse. Trucking, United, and VeriSafe each acknowledge possession of the goods by a document of title. These parties are

Accepted Answer

A) bailees. 
B) buyers. 
C) lessees. 
D) sellers. 
A) bailees. 
B) buyers. 
C) lessees. 
D) sellers.

Question 13

Mountain Coffee Company and Nature's Cuisine Inc. enter into a contract for a sale of coffee beans. The contract includes the term "F.O.B. Ocean City," which is the location of Nature's Cuisine. This means that the contract is

Accepted Answer

A) a bill of lading. 
B) a destination contract. 
C) a shipment contract. 
D) a warehouse receipt. 
A) a bill of lading. 
B) a destination contract. 
C) a shipment contract. 
D) a warehouse receipt.

Question 14

Equip Corporation agrees to lease a woodchipper to Forest Management LLC. Before any interest in the woodchipper can pass from Equip to Forest, it must be

Accepted Answer

A) in existence and identified as the goods in the contract. 
B) in Equip's physical possession. 
C) in Forest's physical possession. 
D) listed in a document of title filed in the appropriate state office. 
A) in existence and identified as the goods in the contract. 
B) in Equip's physical possession. 
C) in Forest's physical possession. 
D) listed in a document of title filed in the appropriate state office.

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

Roasters Corporation and Outdoor Barbecues Inc. enter into a contract for a sale of a commercial grill. The contract requires Roasters to deliver the goods to Speedy Delivery Company for transport to Outdoor. Risk of loss passes to Outdoor when

Accepted Answer

A) Roasters delivers the goods to Speedy. 
B) Roasters and Outdoor enter into their contract. 
C) Speedy transports the goods to Outdoor. 
D) Outdoor begins to use the grill. 
A) Roasters delivers the goods to Speedy. 
B) Roasters and Outdoor enter into their contract. 
C) Speedy transports the goods to Outdoor. 
D) Outdoor begins to use the grill.

Question 17

If a seller supplies ten dishwashers in response to an order for ten washing machines-"F.O.B. the seller's warehouse"-and the goods are damaged in transit to the buyer's store, the loss falls on the seller.

Accepted Answer

A) True 
 B)False

Question 18

Elena buys from Fiesta Autos a used pick-up truck. The truck was manufactured by Gem Vehicles, Inc., and previously owned by Hanna. Regarding title to the truck, Elena acquires

Accepted Answer

A) whatever title Fiesta had. 
B) whatever title Gem had. 
C) whatever title Hanna had. 
D) no title. 
A) whatever title Fiesta had. 
B) whatever title Gem had. 
C) whatever title Hanna had. 
D) no title.

Question 19

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.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 21: Title Risk and Insurable Interest

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

Confection Corporation orders Double Chocolate Bars from Edible Distribution Company. Edible identifies the goods. Before they are shipped via Fast Shipping LLC, an insurable interest in the goods exists in

Growers Mart buys one hundred cases of berries from Hilltop Farm. The parties agree that the berries will be transported "F.O.B. Hilltop Farm" via Intrastate Trucking Company. Intrastate's truck and the berries are lost in a fire following an accident. The loss of the berries is suffered by

Roofing Contractor LLC buys roof tiles from Shingles Inc. The parties agree that the tiles will be shipped "F.O.B. Shingles" to Roofing via Tristate Shipping Corporation. The goods are lost in transit. The loss is suffered by

If the contract calls for the sale or lease of specific goods that are already in existence, identification takes place when the goods are shipped.

Barley that fills Cultivator Co-op's silo is fungible if the grain is

Spuds Corporation buys from Tater Farm Inc. a potato crop that Tater plans to plant and harvest during the next growing season. Spuds plans to sell the potatoes to Tasty Food Restaurant. After the potatoes are planted, but before they are harvested, an insurable interest in the crop exists in

United Wear Inc. and Winter Gear stores enter into a contract for a sale of coats. Their contract can indicate that the price includes transportation costs to a specific destination by including the term

When a buyer breaches a contract, risk of loss remains with or reverts to the seller.

Buyers and lessees have an insurable interest in identified goods.

Generally, the party in breach of a sales contract bears the risk of loss.

Mountain Coffee Company and Nature's Cuisine Inc. enter into a contract for a sale of coffee beans. The contract includes the term "F.O.B. Ocean City," which is the location of Nature's Cuisine. This means that the contract is

Equip Corporation agrees to lease a woodchipper to Forest Management LLC. Before any interest in the woodchipper can pass from Equip to Forest, it must be

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

Roasters Corporation and Outdoor Barbecues Inc. enter into a contract for a sale of a commercial grill. The contract requires Roasters to deliver the goods to Speedy Delivery Company for transport to Outdoor. Risk of loss passes to Outdoor when

If a seller supplies ten dishwashers in response to an order for ten washing machines-"F.O.B. the seller's warehouse"-and the goods are damaged in transit to the buyer's store, the loss falls on the seller.

Elena buys from Fiesta Autos a used pick-up truck. The truck was manufactured by Gem Vehicles, Inc., and previously owned by Hanna. Regarding title to the truck, Elena acquires

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.

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