Question 1

A consignment deal would be an example of a(n) ________.

Accepted Answer

A)  unconditional contract 
B)  sale or return contract 
C)  sale or approval contract 
D)  unequivocal contract 
A)  unconditional contract 
B)  sale or return contract 
C)  sale or approval contract 
D)  unequivocal contract

Question 2

The delivery term "no-arrival, no-sale" can be added to a shipment contract.

Accepted Answer

A) True 
 B)False

Question 3

When is a buyer in breach of a sales contract?

Accepted Answer

A buyer breaches a sales contract if he

Question 4

A holder of goods who is not a seller or a buyer is referred to as a(n) ________.

Accepted Answer

A)  consignor 
B)  broker 
C)  bailee 
D)  consignee 
A)  consignor 
B)  broker 
C)  bailee 
D)  consignee

Question 5

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 6

In a no-arrival, no-sale contract, the seller is not required to deliver replacement goods to the buyer.

Accepted Answer

A) True 
 B)False

Question 7

In a sale or return contract, the risk of loss and title is with the seller even when the buyer takes possession of the goods.

Accepted Answer

A) True 
 B)False

Question 8

Explain in detail the risk of loss in lease contracts.

Accepted Answer

The parties to a lease contract are the

Question 9

The UCC allows the title of goods to be passed without its identification.

Accepted Answer

A) True 
 B)False

Question 10

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 11

The term ________ refers to the legal, tangible evidence of ownership of goods.

Accepted Answer

A)  tenure 
B)  title 
C)  possession 
D)  pledge 
A)  tenure 
B)  title 
C)  possession 
D)  pledge

Question 12

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 13

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 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

Common law places the risk of loss of goods on the party who held title.

Accepted Answer

A) True 
 B)False

Question 16

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 17

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

Question 18

The term "Ex-ship" requires the seller to bear the expense and risk of loss until the goods are unloaded from the ship at its port of destination.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is true for the passage of title in a contract requiring a document of title?

Accepted Answer

A)  The title passes when the shipping arrangements are made. 
B)  The title passes at the time and place of contracting. 
C)  The title passes when the destination of delivery is first mentioned in the contract. 
D)  The title passes when and where the seller delivers the document to the buyer. 
A)  The title passes when the shipping arrangements are made. 
B)  The title passes at the time and place of contracting. 
C)  The title passes when the destination of delivery is first mentioned in the contract. 
D)  The title passes when and where the seller delivers the document to the buyer.

Question 20

What is a sale or return contract and who bears the risk of loss of goods in a sale or return contract?

Accepted Answer

In a sale or return contract, the seller

Exam 19: Title to Goods and Risk of Loss

A consignment deal would be an example of a(n) ________.

The delivery term "no-arrival, no-sale" can be added to a shipment contract.

When is a buyer in breach of a sales contract?

A holder of goods who is not a seller or a buyer is referred to as a(n) ________.

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

In a no-arrival, no-sale contract, the seller is not required to deliver replacement goods to the buyer.

In a sale or return contract, the risk of loss and title is with the seller even when the buyer takes possession of the goods.

Explain in detail the risk of loss in lease contracts.

The UCC allows the title of goods to be passed without its identification.

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

The term ________ refers to the legal, tangible evidence of ownership of goods.

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

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

Common law places the risk of loss of goods on the party who held title.

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

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.

The term "Ex-ship" requires the seller to bear the expense and risk of loss until the goods are unloaded from the ship at its port of destination.

Which of the following is true for the passage of title in a contract requiring a document of title?

What is a sale or return contract and who bears the risk of loss of goods in a sale or return contract?

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