Question 1

Pipe Company orders six irrigation pumps from Quality Pumps Inc. The pumps are stored in Re-storage Warehouse. Under the terms of the order, Quality must give Pipe a warehouse receipt for the goods, which the buyer will then pick up. Title to the goods passes to Pipe when

Accepted Answer

A)   Quality stores the pumps.
B)   Pipe orders the pumps.
C)   Pipe picks up the pumps.
D)   Quality gives Pipe the warehouse receipt. D

Question 2

Jill buys a kayak from a Lake Craft store, which agrees to keep it for her until she picks it up. Before Jill gets the kayak, an unforeseen tornado destroys the store and the goods. The loss is suffered by

Accepted Answer

A)   Jill.
B)   the maker of the kayak.
C)   Lake Craft.
D)   the government agency that failed to foresee the tornado. C

Question 3

Red Bev LLC contracts to buy two tons of strawberries from Sweet Fruits, Inc. The contract states that Sweet Fruits is required to ship the strawberries to Red Bev by Truck Transport Inc. The contract is

Accepted Answer

A)   a bill of lading.
B)   a destination contract.
C)   a shipment contract.
D)   a warehouse receipt. C

Question 4

In a shipment contract, the seller is required to deliver the goods to a particular destination.

Accepted Answer

A) True 
 B)False

Question 5

Rice that fills Harvest Co-op's silo is fungible if the rice is

Accepted Answer

A)   alike naturally, by agreement, or by trade usage.
B)   fundamentally different.
C)   good, edible, and marketable.
D)   rotting due to a fungus caused by a leaky roof and a delay in shipping.

Question 6

Identification gives

Accepted Answer

A)   the state the right to impose taxes on a sale or lease of goods.
B)   the buyer or lessee the right to insure certain goods.
C)   the seller the right to collect payment for goods before their delivery.
D)   none of the choices.

Question 7

If the seller's title is voidable, a good faith purchaser acquires no title, and the real owner can reclaim the goods.

Accepted Answer

A) True 
 B)False

Question 8

In a sale of oranges from Citrus Grove Farms to Juice Factory Inc. to be delivered after the harvest, a fire destroys the fruit before it is picked. Under the UCC, the rights and liabilities of Citrus and Juice in this circumstance are generally determined by

Accepted Answer

A)   the right of ownership.
B)   who has title.
C)   the concepts of identification and risk of loss.
D)   all of the choices.

Question 9

Confection Corporation orders Double Chocolate Bars from Edible Distribution Company. Edible identifies the goods. Before they are shipped via Fast Shipping LLC, an insurable interest in the goods exists in

Accepted Answer

A)   Confection only.
B)   Edible only.
C)   both Confection and Edible.
D)   Confection, Edible, and Fast.

Question 10

Goods that are not both existing and identified to the contract are called future goods.

Accepted Answer

A) True 
 B)False

Question 11

Title can pass to the buyer from the seller before the goods are identified to the contract.

Accepted Answer

A) True 
 B)False

Question 12

Generally, the party in breach of a sales contract bears the risk of loss.

Accepted Answer

A) True 
 B)False

Question 13

Parties to sales or lease contracts often obtain insurance coverage to protect against damage, loss, or destruction of the goods.

Accepted Answer

A) True 
 B)False

Question 14

In a shipment contract, risk of loss remains with the seller until the goods are delivered to the buyer at the buyer's place of business.

Accepted Answer

A) True 
 B)False

Question 15

Equipment Corporation agrees to lease a woodchipper to Forest Management LLC. Before any interest in the woodchipper can pass from Equipment to Forest, it must be

Accepted Answer

A)   in existence and identified as the goods in the contract.
B)   in Equipment's physical possession.
C)   in Forest's physical possession.
D)   listed in a document of title and filed in the appropriate state office.

Question 16

Roofing Contractor LLC buys roofing tiles from Shingles Inc. The parties agree that the tiles will be shipped "F.O.B. Shingles" to Roofing via Tristate Shipping Corporation. The tiles are lost in transit. The loss is suffered by

Accepted Answer

A)   Tristate.
B)   Shingles.
C)   Roofing.
D)   consumers by an increase in the prices of tiles and shipping.

Question 17

In the following situations, two parties claim the same goods. Who is most likely to prevail in each circumstance? Explain.
(a) Czeslaw steals Denise's Ultra HD TV set and sells it to Ezra, an innocent purchaser, for value. Denise learns that Ezra has the set and demands its return.
(b) Gwendolyn takes her all-terrain vehicle (ATV) for repair to Hank's Sales & Repair, a merchant who fixes and sometimes sells used ATVs. By accident, one of Hank's employees sells Gwendolyn's ATV to John, an innocent purchaser-customer, who takes possession. Gwendolyn wants her ATV back from John.

Accepted Answer

The answer of In the following situations, two parties claim...

Question 18

Appliance Corporation sells Best-brand vacuum cleaners to Cash Discount Stores and other retailers. Appliance will have an insurable interest in the vacuums as long as

Accepted Answer

A)   Appliance remains in business.
B)   Appliance retains title to the goods.
C)   the goods are in existence.
D)   there is no risk of loss.

Question 19

Beef Inc. raises calves to sell. Beef breeds its cows in April, and the cows calve in February of the following year. In January, Cold Cuts Inc. contracts with Beef to buy fifty calves. Identification takes place in

Accepted Answer

A)   January, when the contract is signed.
B)   April, when the calves are conceived.
C)   February, when the calves are born.
D)   when Cold takes possession of the calves.

Question 20

Runners Feet, a shoe store, orders one hundred pair of athletic shoes from Speedster Inc. Absent a contrary agreement between the parties, title will pass to Runners Feet when

Accepted Answer

A)   the parties sign the contract.
B)   the goods exist and are identified.
C)   the seller physically delivers the goods.
D)   the buyer pays for the goods.

Exam 20: Title and Risk of Loss

Pipe Company orders six irrigation pumps from Quality Pumps Inc. The pumps are stored in Re-storage Warehouse. Under the terms of the order, Quality must give Pipe a warehouse receipt for the goods, which the buyer will then pick up. Title to the goods passes to Pipe when

Jill buys a kayak from a Lake Craft store, which agrees to keep it for her until she picks it up. Before Jill gets the kayak, an unforeseen tornado destroys the store and the goods. The loss is suffered by

Red Bev LLC contracts to buy two tons of strawberries from Sweet Fruits, Inc. The contract states that Sweet Fruits is required to ship the strawberries to Red Bev by Truck Transport Inc. The contract is

In a shipment contract, the seller is required to deliver the goods to a particular destination.

Rice that fills Harvest Co-op's silo is fungible if the rice is

Identification gives

If the seller's title is voidable, a good faith purchaser acquires no title, and the real owner can reclaim the goods.

In a sale of oranges from Citrus Grove Farms to Juice Factory Inc. to be delivered after the harvest, a fire destroys the fruit before it is picked. Under the UCC, the rights and liabilities of Citrus and Juice in this circumstance are generally determined by

Confection Corporation orders Double Chocolate Bars from Edible Distribution Company. Edible identifies the goods. Before they are shipped via Fast Shipping LLC, an insurable interest in the goods exists in

Goods that are not both existing and identified to the contract are called future goods.

Title can pass to the buyer from the seller before the goods are identified to the contract.

Generally, the party in breach of a sales contract bears the risk of loss.

Parties to sales or lease contracts often obtain insurance coverage to protect against damage, loss, or destruction of the goods.

In a shipment contract, risk of loss remains with the seller until the goods are delivered to the buyer at the buyer's place of business.

Equipment Corporation agrees to lease a woodchipper to Forest Management LLC. Before any interest in the woodchipper can pass from Equipment to Forest, it must be

Roofing Contractor LLC buys roofing tiles from Shingles Inc. The parties agree that the tiles will be shipped "F.O.B. Shingles" to Roofing via Tristate Shipping Corporation. The tiles are lost in transit. The loss is suffered by

Appliance Corporation sells Best-brand vacuum cleaners to Cash Discount Stores and other retailers. Appliance will have an insurable interest in the vacuums as long as

Beef Inc. raises calves to sell. Beef breeds its cows in April, and the cows calve in February of the following year. In January, Cold Cuts Inc. contracts with Beef to buy fifty calves. Identification takes place in

Runners Feet, a shoe store, orders one hundred pair of athletic shoes from Speedster Inc. Absent a contrary agreement between the parties, title will pass to Runners Feet when