Exam 21: Title, Risk, and Insurable Interest

Gas & Wood Stove Shop receives Hearthwarm-brand stoves from Independent Dealer, Inc., under a sale or return agreement. While the stoves are in Gas & Wood's possession, title is held by

Organicos Café orders five gallons of PureMaid-brand trans fat-free olive oil from Quico Cooking Supplies, Inc. Quico mistakenly ships soy oil, which Organicos keeps, despite the nonconformity. The oil is destroyed in a fire. The loss is suffered by

When a buyer breaches a contract, the risk of loss immediately shifts to the buyer.

Home Appliance Corporation contracts with Instate Trucking Company to take a selection of appliance repair parts to Journey Airlines, Inc., with Journey to transport the goods to a KeepSafe Company warehouse. Instate Trucking, Journey Airlines, and KeepSafe each acknowledge possession of the goods by a document of title. Instate Trucking, Journey Airlines, and KeepSafe are

If a buyer accepts a shipment of goods and later discovers a defect, acceptance cannot be revoked.

Ron, a representative for Statewide Freight Inc., delivers a receipt issued by Tina, the owner of United Warehouse, for goods in storage to World Products, Inc., a buyer of the goods. This is

In most situations involving sales, rights and liabilities are determined by who has the title to the goods.

In a sale or return, a buyer has an option to return the goods and undo the sale.

Roofing Company buys asphalt roofing tiles from Shingles, Inc. The parties agree that the tile will be shipped "F.O.B. Shingles's warehouse" to Roofing's location via Shipping Corporation. The tiles are lost in transit. The loss is suffered by

ReQwest LLC agrees to sell one hundred servers to Social Media Networks, Inc. The servers, which Social Media Networks expressly requires to have certain amounts of memory, are to be shipped "F.O.B. Social Media Networks distribution center in Tampa, FL." When the servers arrive, Social Media Networks rejects them and informs ReQwest, claiming that the servers do not conform to Social Media Networks' memory requirement. A few hours later, the servers are destroyed in a fire at Social Media Networks' distribution center. Will ReQwest succeed in a suit against Social Media Networks for the cost of the goods?

Commercial Rents Corporation agrees to lease a pressure washer to Delivery Trucks, Inc., which agrees to pick it up at E Street Warehouse. Before Delivery Trucks retrieves the washer, it is stolen. The loss is suffered by

​Paramount Bookstores buys fifty cases of an assortment of books from Quixotic Publishing Company with the right to return the unsold books in lieu of payment. This is

Safety Supply Corporation in New York sells a truckload of protective suits, masks, and other safety gear to Toxic Recovery, Inc., in Connecticut, "F.O.B. New York." Safety Supply arranges with US Truckline to transport the goods. The cost of the transport will be paid by

A seller with voidable title can transfer good title to a good faith purchaser for value.

Mountainside 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​

Title and risk of loss cannot pass to the buyer from the seller before the goods are identified to the contract.

If a sale involves crops that are to be harvested within twelve months, identification takes place when the crops are harvested.

Any explicit understanding between the buyer and the seller determines when title passes.

In a sale or return, title and risk of loss remain with the seller until the buyer accepts the goods.

Fungible goods are goods that are alike naturally or by agreement or trade usage.