Question 1

Ann boards her horse Blaze at Cora's Ranch. Ann sells the horse to Dan and tells Cora, "I sold Blaze to Dan." Cora says, "Okay." That night, Blaze is kicked in the head by another horse and dies. Who suffers the loss?

Accepted Answer

The answer of Ann boards her horse Blaze at Cora's...

Question 2

Martin buys 1,000 bales of hay from Nuevo Farms. The parties agree that the hay will be transported F.A.S. via Overland Transport Company. Nuevo Farms' truck carrying the hay explodes before reach?ing Overland Transport. The loss is suffered by

Accepted Answer

A)  Martin and Nuevo Farms, but not Overland Transport. 
B)  Martin, Nuevo Farms, and Overland Transport. 
C)  Martin only. 
D)  Nuevo Farms only.

Question 3

Diner's Cafe orders five gallons of transfat-free olive oil from EZ Distributors, Inc. EZ mistakenly ships soy oil, which Diner's keeps, despite the nonconform?ity. The oil is destroyed in a fire. The loss is suffered by

Accepted Answer

A)  Diner's and EZ, but not Diner's customers. 
B)  Diner's, EZ, and Diner's customers. 
C)  Diner's only. 
D)  EZ only.

Question 4

If a seller is a merchant, and not required to move the goods, the risk of loss passes to a buyer when the buyer takes physical possession of the goods.

Accepted Answer

A) True 
 B)False

Question 5

Fungible goods are goods that can be delivered only by transport.

Accepted Answer

A) True 
 B)False

Question 6

When goods are in a consignee's possession, his or her creditors will prevail over the consignor in an action to repossess the goods.

Accepted Answer

A) True 
 B)False

Question 7

In all circumstances, title passes to the buyer at the time and place at which the seller physically delivers the goods.

Accepted Answer

A) True 
 B)False

Question 8

My-Tee Purchasing Corporation orders from National Sales, Inc., goods that are stored in a Outstate Properties, 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

Accepted Answer

A)  orders the goods. 
B)  pays for the goods. 
C)  receives the negotiable warehouse receipt. 
D)  moves the goods out of the warehouse.

Question 9

If a seller is not a merchant, and not required to move the goods, the risk of loss passes to a buyer only when the buyer takes physical possession of the goods.

Accepted Answer

A) True 
 B)False

Question 10

If a lessor is a merchant, the risk of loss passes to a lessee when the lessee takes physical possession of the goods.

Accepted Answer

A) True 
 B)False

Question 11

Real Tea Company and Savory Stores, Inc., enter into a contract for a sale of tea. The contract includes the term "F.O.B. Upriver City," which is Savory's location. This means that the contract is

Accepted Answer

A)  a bailment contract. 
B)  a destination contract. 
C)  a shipment contract. 
D)  a transportation contract.

Question 12

A receipt issued by a warehouser for goods stored in a warehouse is a bill of lading.

Accepted Answer

A) True 
 B)False

Question 13

Town Style Stores orders leather jackets from Unique Clothing Company. Unique mistakenly ships denim jackets, which Town re?jects and returns via Value Transport, Inc. During the return, the jack?ets are lost. The loss is suffered by

Accepted Answer

A)  Town and Unique, but not Value. 
B)  Town only. 
C)  Town, Unique, and Value. 
D)  Unique only.

Question 14

Under a shipment contract, the risk of loss passes to the buyer only when the seller tenders conforming goods to the buyer at the specified destination.

Accepted Answer

A) True 
 B)False

Question 15

XL Electronics orders thirty hard drives from Yang Computers, Inc. The hard drives are stored in City Warehouse. Under the terms of the or?der, Yang must give XL a warehouse receipt for the goods, which XL will then pick up. Title to the goods passes to XL when

Accepted Answer

A)  City Warehouse stores the goods. 
B)  XL orders the goods. 
C)  XL picks up the goods. 
D)  Yang gives XL a warehouse receipt for the goods.

Question 16

A contract in which a buyer is allowed to take goods on a trial basis is a consignment.

Accepted Answer

A) True 
 B)False

Question 17

Fungible goods are goods that cannot be delivered by physical transport.

Accepted Answer

A) True 
 B)False

Question 18

Orange Computer Corporation sells Pad-brand MP3 players to Quik Discount Stores and other retailers. Orange will have an insurable in?ter?est in the players as long as

Accepted Answer

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

Question 19

When a buyer breaches a contract, the risk of loss immediately shifts to the buyer.

Accepted Answer

A) True 
 B)False

Question 20

If a seller is not a merchant, and the goods are not to be moved, the risk of loss cannot pass to a buyer.

Accepted Answer

A) True 
 B)False

Exam 21: Title, Risk, and Insurable Interest

Ann boards her horse Blaze at Cora's Ranch. Ann sells the horse to Dan and tells Cora, "I sold Blaze to Dan." Cora says, "Okay." That night, Blaze is kicked in the head by another horse and dies. Who suffers the loss?

Martin buys 1,000 bales of hay from Nuevo Farms. The parties agree that the hay will be transported F.A.S. via Overland Transport Company. Nuevo Farms' truck carrying the hay explodes before reach?ing Overland Transport. The loss is suffered by

Diner's Cafe orders five gallons of transfat-free olive oil from EZ Distributors, Inc. EZ mistakenly ships soy oil, which Diner's keeps, despite the nonconform?ity. The oil is destroyed in a fire. The loss is suffered by

If a seller is a merchant, and not required to move the goods, the risk of loss passes to a buyer when the buyer takes physical possession of the goods.

Fungible goods are goods that can be delivered only by transport.

When goods are in a consignee's possession, his or her creditors will prevail over the consignor in an action to repossess the goods.

In all circumstances, title passes to the buyer at the time and place at which the seller physically delivers the goods.

If a seller is not a merchant, and not required to move the goods, the risk of loss passes to a buyer only when the buyer takes physical possession of the goods.

If a lessor is a merchant, the risk of loss passes to a lessee when the lessee takes physical possession of the goods.

Real Tea Company and Savory Stores, Inc., enter into a contract for a sale of tea. The contract includes the term "F.O.B. Upriver City," which is Savory's location. This means that the contract is

A receipt issued by a warehouser for goods stored in a warehouse is a bill of lading.

Town Style Stores orders leather jackets from Unique Clothing Company. Unique mistakenly ships denim jackets, which Town re?jects and returns via Value Transport, Inc. During the return, the jack?ets are lost. The loss is suffered by

Under a shipment contract, the risk of loss passes to the buyer only when the seller tenders conforming goods to the buyer at the specified destination.

XL Electronics orders thirty hard drives from Yang Computers, Inc. The hard drives are stored in City Warehouse. Under the terms of the or?der, Yang must give XL a warehouse receipt for the goods, which XL will then pick up. Title to the goods passes to XL when

A contract in which a buyer is allowed to take goods on a trial basis is a consignment.

Fungible goods are goods that cannot be delivered by physical transport.

Orange Computer Corporation sells Pad-brand MP3 players to Quik Discount Stores and other retailers. Orange will have an insurable in?ter?est in the players as long as

When a buyer breaches a contract, the risk of loss immediately shifts to the buyer.

If a seller is not a merchant, and the goods are not to be moved, the risk of loss cannot pass to a buyer.