Exam 20: A: Title,risk,and Insurable Interest

A contract's delivery term can affect a buyer's recovery for goods damaged in transit.

Focus Camera Shop receives Sharpview-brand lenses from Optical,Inc. ,under a sale or return agreement.While the lenses are in Focus's possession,title is held by

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

With a bill of lading,Cartage Common Carrier Company acknowledges possession of certain goods and contracts to deliver them.Cartage is

A consignment is similar to a sale or return but normally results in a bailment rather than a sale.

A seller has an insurable interest in goods as long as he or she retains title to the goods.

When the risk of loss for goods passes from a seller to a buyer is generally determined by the contract between the parties.

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

Generally,a contract is assumed to be a destination contract if nothing to the contrary is stated in the contract.

Commercial Storage (CS),a bailee,holds goods for Delta Distributors,Inc. ,which has contracted to sell them to Eagle Company.The goods are to be delivered without being moved.The risk of loss will pass to Eagle when Eagle receives

In a sale or return,a buyer takes goods primarily for resale,with a right to return any goods that fail to sell.

Lou's Bicycle Store contracts to buy fifty bicycles from Mountain Bikes,Inc.Unless the contract states otherwise,this is

Medico Records Company orders thirty hard drives from Nano Computers,Inc.The hard drives are stored in Enviro Warehouse.Under the terms of the order,Nano must give Medico a warehouse receipt for the goods,which Medico will then pick up.Title to the goods passes to Medico when

A buyer has an insurable interest in identified goods.

If goods are so nonconforming that the buyer has the right to reject them,the risk of loss does not pass to the buyer until cure or acceptance.

Under a shipment contract,the risk of loss passes to the buyer when the goods are tendered to the buyer at a specified destination.

Corona Storage Company holds goods for Durango Sales Corporation,which contracts to sell them to El Dorado Stores,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 El Dorado

Textiles,Inc. ,and Fab Fabric Corporation enter into a contract for a sale of muslin.The terms do not clearly indicate whether it is a destination or shipment contract.A court would most likely presume that it is

When a seller keeps the goods for pickup,if the seller is not a merchant,the risk of loss passes to a buyer on tender of delivery.

My-Tee Shirt Corporation orders from Celebrity Sales,Inc. ,goods that are stored in a Realty,Inc. ,warehouse.My-Tee pays for the goods,delivery is via the transfer of a negotiable warehouse receipt,and My-Tee moves the goods out of the warehouse.The risk of loss passes to My-Tee when it