Exam 21: Title, Risk, and Insurable Interest

Entrusting goods to a merchant who deals in goods of the kind gives the merchant power to transfer all rights to a buyer in the ordinary course of business.

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

The UCC has replaced the common law concept of title in part with the concept of identification.

In contracts involving a sale of unborn animals to be born within twelve months, identification takes place when the animals are conceived.

Title is one concept that the UCC has substituted for the common law concept of risk of loss.

A contract in which a buyer takes goods primarily for resale, with a right to return any goods that fail to sell, is a sale on approval.

Quiet Soles, Inc., and Retail Footwear Stores enter into a contract for the sale of shoes. The contract indicates that the price includes transportation costs to a specific destination by including the term

A specific grade of corn that fills Dean and Ethel's silo is fungible. This means that the corn is

A warehousing company that normally issues documents of title for goods it receives is a bailee.

A buyer and a seller cannot normally have an insurable interest in iden?tical goods at the same time.

A buyer has an insurable interest in identified goods.

Rani leaves a pair of new shoes at Soles Shoe Store to be dyed. Soles sells the shoes to Tia, who does not know that the shoes belong to Rani. Rani can recover from

In a sale on approval, title and risk of loss pass only when the buyer ac?cepts the goods.

Perfect Furnishings, Inc., agrees to lease a desk to Research Resources, Inc. (RRI), which requests that the desk be left outside Streetside Warehouse for RRI to pick up. Before RRI retrieves the desk, it is stolen. The loss is suf?fered by

A contract between Kwik Import Company in Los Angeles and Macro Retail Corporation in New York does not expressly state which party bears the risk of loss but says only that Kwik is "to ship goods at the seller's expense." At what point does the risk of loss of the goods pass from the seller to the buyer?

When a buyer agrees to buy goods held by a bailee, unless otherwise ex?plicitly agreed, the risk of loss passes to the buyer when the price is paid.

Under the UCC, a bailment is a sale on approval.

In general, a buyer's breach of a contract causes the risk of loss to shift to the buyer.

A sale or return is a conditional sale.

City Storage Company holds goods for Downtown Sales Corporation, which contracts to sell them to eStores, Inc. The goods are to be delivered without being moved and are represented by a negotiable bill of lading. The risk of loss passes to eStores