Question 1

In a case in which a buyer purchases goods from a thief who has stolen them,the purchaser does not acquire title to the goods.

Accepted Answer

A) True 
 B)False  True

Question 2

In a destination contract,title passes to the buyer when the seller tenders delivery of the goods at the specified destination.

Accepted Answer

A) True 
 B)False  True

Question 3

Goods that are already in existence but which are to be sold at a future date are known as future goods.

Accepted Answer

A) True 
 B)False  False

Question 4

In a destination contract,the seller is required to replace any goods lost in transit.

Accepted Answer

A) True 
 B)False

Question 5

In an F.A.S.port of shipment,the buyer bears the shipping costs and the risk of loss during transport.

Accepted Answer

A) True 
 B)False

Question 6

Robert steals a truckload of plasma televisions that belong to Karson Electronics Store.He then resells it to Stu-Mart,which is unaware of the stolen nature of the goods.Karson Electronics Store then traces the plasma televisions to Stu-Mart.Robert is also arrested for the theft.Which of the following is true for Karson's legal course for reclaiming the televisions or recovering damages?

Accepted Answer

A) Stu-Mart is a good-faith purchaser here and as such does not have to hand over the televisions to Karson. 
B) Stu-mart must hand over the televisions to Karson as its title to the goods is void. 
C) Karson's only recourse is against Robert to claim damages. 
D) Karson's cannot reclaim the goods, but can sue Stu-Mart for negligence and damages. 
A) Stu-Mart is a good-faith purchaser here and as such does not have to hand over the televisions to Karson. 
B) Stu-mart must hand over the televisions to Karson as its title to the goods is void. 
C) Karson's only recourse is against Robert to claim damages. 
D) Karson's cannot reclaim the goods, but can sue Stu-Mart for negligence and damages.

Question 7

A shipment contract requires the seller to ship the goods to the buyer via a common carrier.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following parties to a shipment contract bears the risk of loss of goods during transport?

Accepted Answer

A) the seller 
B) the carrier 
C) the buyer 
D) the seller and the carrier 
A) the seller 
B) the carrier 
C) the buyer 
D) the seller and the carrier

Question 9

________ refers to an arrangement in which a seller delivers goods to a buyer to sell on his or her behalf.

Accepted Answer

A) Consignment 
B) Void entitlement 
C) Entrustment 
D) Leasing 
A) Consignment 
B) Void entitlement 
C) Entrustment 
D) Leasing

Question 10

Which of the following is a good faith purchaser?

Accepted Answer

A) a person who pays sufficient consideration for good to someone he honestly believes has good title 
B) a person who buys stolen goods without being aware of it 
C) a buyer who agrees to hold goods for a person until the delivery of the goods is made 
D) a buyer to whom goods are delivered by a seller to sell on the seller's behalf 
A) a person who pays sufficient consideration for good to someone he honestly believes has good title 
B) a person who buys stolen goods without being aware of it 
C) a buyer who agrees to hold goods for a person until the delivery of the goods is made 
D) a buyer to whom goods are delivered by a seller to sell on the seller's behalf

Question 11

How are the shipping terms C.I.F.and F.O.B.point of shipment similar to each other?

Accepted Answer

A) Both require the seller to bear the expense and risk of loss until the goods are tendered to the buyer at the place of destination. 
B) Both require the seller to bear the expenses and risk of loss when handing the shipment to a carrier. 
C) Both require the seller to deliver and tender the goods alongside the named vessel provided by the buyer. 
D) Both require the seller to bear the expense and risk of loss until the goods are unloaded from the ship at its port of destination. 
A) Both require the seller to bear the expense and risk of loss until the goods are tendered to the buyer at the place of destination. 
B) Both require the seller to bear the expenses and risk of loss when handing the shipment to a carrier. 
C) Both require the seller to deliver and tender the goods alongside the named vessel provided by the buyer. 
D) Both require the seller to bear the expense and risk of loss until the goods are unloaded from the ship at its port of destination.

Question 12

Which of the following is true of a destination contract containing a "no-arrival,no-sale" clause?

Accepted Answer

A) The seller is required to bear the expense and risk during transportation. 
B) The seller is required to replace any goods lost in transit. 
C) The buyer does not have to pay for destroyed goods. 
D) The risk of loss passes once the shipping has been arranged. 
A) The seller is required to bear the expense and risk during transportation. 
B) The seller is required to replace any goods lost in transit. 
C) The buyer does not have to pay for destroyed goods. 
D) The risk of loss passes once the shipping has been arranged.

Question 13

Which of the following is true for the shipping term F.O.B.(free on board)point of shipment?

Accepted Answer

A) It requires the seller to bear the expense and risk of loss until the goods are tendered to the buyer at the place of destination. 
B) It refers to a pricing term that includes the cost of the goods and the costs of insurance and freight. 
C) It requires the seller to bear the expense and risk of loss of the goods until delivery has been tendered. 
D) The buyer bears the shipping expense and risk of loss while the goods are in transit. 
A) It requires the seller to bear the expense and risk of loss until the goods are tendered to the buyer at the place of destination. 
B) It refers to a pricing term that includes the cost of the goods and the costs of insurance and freight. 
C) It requires the seller to bear the expense and risk of loss of the goods until delivery has been tendered. 
D) The buyer bears the shipping expense and risk of loss while the goods are in transit.

Question 14

In which of the following does the title to the goods pass from the seller to the buyer?

Accepted Answer

A) option contract 
B) rental agreement 
C) lease 
D) sale of goods 
A) option contract 
B) rental agreement 
C) lease 
D) sale of goods

Question 15

If the bailee refuses to honor a document of title or other direction to deliver,the risk of loss remains on the buyer.

Accepted Answer

A) True 
 B)False

Question 16

If no document of title is required,title only passes at the time and place of delivery.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is a difference between a sale or return contract and a sale on approval contract?

Accepted Answer

A) For sale or return, the risk of loss is borne by the buyer; while in a sale on approval, it is borne by the seller. 
B) For sale or return, the goods are sold to the buyer; while in a sale on approval, the buyer is allowed a time period to test the goods. 
C) For sale or return, failure to notify rejection is not acceptance; while in a sale on approval, failure to notify rejection is acceptance. 
D) For sale or return, goods sold can be returned; while in a sale on approval, goods sold can never be returned. 
A) For sale or return, the risk of loss is borne by the buyer; while in a sale on approval, it is borne by the seller. 
B) For sale or return, the goods are sold to the buyer; while in a sale on approval, the buyer is allowed a time period to test the goods. 
C) For sale or return, failure to notify rejection is not acceptance; while in a sale on approval, failure to notify rejection is acceptance. 
D) For sale or return, goods sold can be returned; while in a sale on approval, goods sold can never be returned.

Question 18

What kinds of goods are termed as future goods?

Accepted Answer

A) goods that exist but are to be sold at a future date 
B) goods that are not yet in existence 
C) goods that can be sold partly in the present and partly at a later date 
D) goods that exist without a title 
A) goods that exist but are to be sold at a future date 
B) goods that are not yet in existence 
C) goods that can be sold partly in the present and partly at a later date 
D) goods that exist without a title

Question 19

The real owner cannot reclaim goods from a good faith purchaser.

Accepted Answer

A) True 
 B)False

Question 20

In a sale on approval,there is no sale unless and until the buyer accepts the goods.

Accepted Answer

A) True 
 B)False

Exam 19: Title to Goods and Risk of Loss

In a case in which a buyer purchases goods from a thief who has stolen them,the purchaser does not acquire title to the goods.

In a destination contract,title passes to the buyer when the seller tenders delivery of the goods at the specified destination.

Goods that are already in existence but which are to be sold at a future date are known as future goods.

In a destination contract,the seller is required to replace any goods lost in transit.

In an F.A.S.port of shipment,the buyer bears the shipping costs and the risk of loss during transport.

A shipment contract requires the seller to ship the goods to the buyer via a common carrier.

Which of the following parties to a shipment contract bears the risk of loss of goods during transport?

________ refers to an arrangement in which a seller delivers goods to a buyer to sell on his or her behalf.

Which of the following is a good faith purchaser?

How are the shipping terms C.I.F.and F.O.B.point of shipment similar to each other?

Which of the following is true of a destination contract containing a "no-arrival,no-sale" clause?

Which of the following is true for the shipping term F.O.B.(free on board)point of shipment?

In which of the following does the title to the goods pass from the seller to the buyer?

If the bailee refuses to honor a document of title or other direction to deliver,the risk of loss remains on the buyer.

If no document of title is required,title only passes at the time and place of delivery.

Which of the following is a difference between a sale or return contract and a sale on approval contract?

What kinds of goods are termed as future goods?

The real owner cannot reclaim goods from a good faith purchaser.

In a sale on approval,there is no sale unless and until the buyer accepts the goods.

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