Exam 19: Title to Goods and Risk of Loss

The term ________ refers to a type of sale in which there is no actual sale unless and until the buyer accepts the goods.

Which of the following is an example of delivery of goods without moving them?

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

Steve brings his watch to Knell Watches to be repaired. Knell Watches sells and repairs watches. Steve entrusts his watch at Knell's until it is repaired. The watch store repairs the watch, but then sells it to Kevin, who buys the watch with a fraudulent check that bounced. Kevin then resells the watch to his friend Jonathan, who is unaware of the stolen nature of the watch. According to the entrustment rule, what legal recourse does Steve have to reclaim the watch or collect damages?

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

Which of the following contracts is an example of future goods?

An entrusted merchant has the power to transfer all rights in the goods to a buyer in the ordinary course of business.

Jason orders one hundred remote-controlled toy cars from RyBy Toys. In the contract, it is stipulated that RyBy Toys will transport the toy cars via FlyByNight, a national carrier service. RyBy Toys makes the arrangements and hands over the toys to FlyByNight without the remote-controllers. In the event that the goods are destroyed in transit, which of the following parties would bear the risk of loss as per the sales contract?

What is the role of a financing statement in a consignment if the consignor files it?

In which of the following cases is a buyer in breach of a sales contract?

In the case of an ordinary lease, if the lessor is a merchant, the risk of loss remains with the lessor even after the lessee receives the goods.

Nebula Crystals, a firm in New York that manufactures crystal figurines, was contracted by Ruth from Florida to deliver a thousand such crystal figurines. The contract required the firm to deliver and tender the goods alongside the vessel SS Dew Express at the New York harbor. Which of the following shipment term expresses such conditions?

________ is a shipping term in a contract that requires the seller to bear the expense and risk of loss until the goods are unloaded from the ship at its port of destination.

Kenneth purchased a car from his local dealership, Quartent Cars. However, since the car was not available in the color that Kenneth favored, the sales contract stipulated that Kenneth could immediately pick up the car of his preferred color from a nearby warehouse. The warehouse was owned by Mr. Henderson. Kenneth received the document of title for the car upon payment and presented it to Mr. Henderson a week later. But Mr. Henderson informed Kenneth that the car was damaged during a fire at the warehouse. What role does Mr. Henderson fulfill in the contract?

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

Thomas signed a sales contract with Bricklay's, a firm that supplies bricks for private individuals. The contract specified the type and amount of bricks needed, and that Thomas would pick up the bricks from the Bricklay's warehouse 15 days later. Thomas received a document of title, but failed to pick up the goods on the stipulated date. In this scenario, at what point of time is the title to goods passed over to Thomas?

If a document of title is required, title must pass when and where the seller delivers the goods to the buyer.

Which of the following could contain the term "no-arrival, no-sale" in their contract?

Article 2A (Leases) of the UCC establishes rules regarding title and risk of loss for leased goods.

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