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Exam 19: Title and Risk of Loss

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Question 31

Multiple Choice

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Li'l Jewelry Store orders display racks from Mark-Up Supplies,Inc.(MSI) .MSI mistakenly ships racks of the wrong size and color,which Li'l rejects and returns via Nevermind Shipping Company.During the return,the racks are lost.The loss is suffered by

A) Li'l only.
B) Li'l and MSI,but not Nevermind.
C) Li'l,MSI,and Nevermind.
D) MSI only.

E) B) and C)
F) A) and B)

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Question 32

Multiple Choice

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A contract between Fresh Fruit Corporation and Green Grocer,Inc.,requires Fresh Fruit to deliver goods to Green Grocer's place of business.This is

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

E) None of the above
F) A) and B)

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Question 33

True/False

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When a buyer agrees to buy goods held by a bailee,unless otherwise explicitly agreed,the risk of loss passes to the buyer when the price is paid.

If a sale involves crops that are to be harvested within twelve months,identification takes place when the crops are planted.

Regal Recreation Sales,Inc.,allows Sandy to take a Regal boat for a "test run." Sandy tries the boat for a few hours,returns,and buys it.This is

A seller with voidable title can transfer good title to a good faith purchaser for value.

Aromatic Tea Company contract to sell tea to Savory Stores,Inc.The contract includes the term "F.O.B.Upriver City," which is Savory's location.This means that the contract is

C.I.F.stands for "cost,insurance,freight."

When a document of title is required,title passes to a buyer when and where the document is delivered.

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

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

A contract in which a buyer is allowed to take goods on a trial basis is a sale or return.

A bailee is a buyer or lessee.

Under a destination contract,the risk of loss passes to the buyer when the goods are duly delivered to the carrier.

Fits-Like-A-Glove Shoes,Inc.,and Retail 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

"Unless otherwise explicitly agreed," title passes to the buyer at the time and place at which the seller physically delivers the goods.

Raw Material,Inc.,and Sewn 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

NuStores accepts a shipment of DVD players from Open-Ur-Eyes Video,Inc.NuStores later discovers a defect in the players,revokes acceptance,and returns the players via Playback,Inc.During the return,the players are lost.The loss is suffered by

If a seller is a merchant,and the seller holds the goods,the risk of loss cannot pass to a buyer.

Office Applications Company (OAC) orders six laser printers from Printing Products,Inc.(PPI) ,to be delivered by PPI.Before PPI's truck arrives with the goods,OAC tells PPI it will not pay.The printers are lost in transit.The loss is suffered by