Commercial Ch 21

Commercial Rents Corporation agrees to lease a pressure washer to Delivery Trucks, Inc., which agrees to pick it up at E Street Warehouse. Before Delivery Trucks retrieves the washer, it is stolen. The loss is suffered by

Commercial Rents.

Consumers Choice store accepts a shipment of EZ2U-brand tablets from Digital Devices, Inc. Consumers Choice later discovers a defect in the tablets, revokes acceptance, and returns the tablets via GoBack, Inc. During the return, the tablets are lost. The loss is suffered by

Digital Devices.

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

F.O.B.

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

False

A seller has an insurable interest in goods as long as the goods are in existence.

False

All UCC provisions relating to the passage of title for sales of goods also apply to leases of goods.

False

Even if goods are not identified to the contract, the title and risk of loss can still pass from the seller to the buyer.

False

If a buyer accepts a shipment of goods and later discovers a defect, acceptance cannot be revoked.

False

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

False

In a destination contract, the seller is required or authorized to ship goods by carrier.

False

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

False

In a sale or return, title and risk of loss remain with the seller until the buyer accepts the goods.

False

In contracts involving a sale of unborn animals to be born within twelve months, identification takes place when the animals are born.

False

In most situations involving sales, rights and liabilities are determined by who has the title to the goods.

False

The risk of loss in a shipment contract passes to the buyer when the goods are delivered to the buyer at the specified destination.

False

Under the UCC, the risk of loss necessarily passes with title.

False

When a bailee is holding goods that are to be delivered under a contract without being moved, the risk of loss cannot pass to a buyer.

False

When a lessee sells leased equipment

False

Gas & Wood Stove Shop receives Hearthwarm-brand stoves from Independent Dealer, Inc., under a sale or return agreement. While the stoves are in Gas & Wood's possession, title is held by

Gas & Wood.

Grocers Mart buys one hundred cases of berries from Hilltop Farms. The parties agree that the berries will be transported "F.O.B. Hilltop Farms" via Refrigerated Trucking Company. Refrigerated's truck and the berries are lost in a fire following an accident. The loss of the berries is suffered by

Grocers.

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

True

In a sale or return, a buyer has an option to return the goods and undo the sale.

True

Tenants in common are owners with an undivided share of the whole.

True

The entrustment rule basically allows innocent buyers to obtain legitimate title to goods purchased from merchants even if the merchants do not have good title.

True

Title and risk of loss cannot pass to the buyer from the seller before the goods are identified to the contract.

True

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

True

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

True

When a merchant keeps the goods for the buyer to pick up, the risk of loss passes when the buyer actually takes possession of the goods.

True

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

True

With nonconforming goods, the risk of loss does not pass to the buyer until the defects are cured or the buyer accepts the goods in spite of the defects.

True

Ursula buys a Verismooth boat from a Watercraft store, which agrees to keep the boat for Ursula until she picks it up. Before Ursula gets the boat, an unforeseen tornado destroys the store and the boat. The loss of the boat is suffered by

Watercraft.

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 destination contract.

Mountainside Coffee Company and Nature's Cuisine, Inc., enter into a contract for a sale of coffee beans. The contract includes the term "F.O.B. Ocean City," which is the location of Nature's Cuisine. This means that the contract is

a destination contract.

Candy Corporation orders Double Chocolate Bars from Edibles Distribution Company. Edibles identifies the goods. Before they are shipped to Candy Corporation, an insurable interest in the goods exists in

both Candy and Edibles.

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

April, when the calves are conceived.

Brad leaves an iPod at Computer Sales & Repair (CSR) to have the battery replaced. CSR sells the iPod to Doris, who does not know that it belongs to Brad. Brad can recover from

CSR.

Household Appliance Corporation sells Ideal-brand vacuum cleaners to Jolly Discount Stores and other retailers. Household Appliance will have an insurable interest in the players as long as

Household Appliance retains title to the goods.

Garden & Field stores order a specific assortment of rose bulbs from Hybrid Flora Company. Hybrid mistakenly ships a selection of annuals, which Garden & Field rejects and returns via Intra-state Transport, Inc. During the return, the annuals are lost. The loss is suffered by

Hybrid Flora.

Organicos Café orders five gallons of PureMaid-brand trans fat-free olive oil from Quico Cooking Supplies, Inc. Quico mistakenly ships soy oil, which Organicos keeps, despite the nonconformity. The oil is destroyed in a fire. The loss is suffered by

Organicos Café.

Megan, an agent for Nabob's, a department store, orders one hundred dresses from Original Designs Inc. Absent a specific agreement between the parties to the contrary, title will pass to Nabob's when

Original Designs physically delivers the dresses.

Pipes & Culverts Company orders six irrigation pumps from Quality Plumbing, Inc. The pumps are stored in Restorers Warehouse. Under the terms of the order, Quality must give Pipes & Culverts a warehouse receipt for the goods, which the buyer will then pick up. Title to the goods passes to Pipes & Culverts when

Quality gives Pipes & Culverts a warehouse receipt for the drives.

Quaff n' Quench Café buys twenty-five crates of oranges from Reynaldo Produce, Inc. The parties agree to ship the oranges "F.O.B. Quaff n' Quench " via Swiftline Trucking Company. The oranges rot in transit. The loss is suffered by

Reynaldo.

Roasters Corporation and Outdoor Barbecues, Inc., enter into a contract for a sale of a commercial grill. The contract requires Roasters to deliver the goods to Speedy Delivery Company for transport to Outdoor. Risk of loss passes to Outdoor when

Roasters delivers the goods to Speedy.

Roofing Company buys asphalt roofing tiles from Shingles, Inc. The parties agree that the tile will be shipped "F.O.B. Shingles's warehouse" to Roofing's location via Shipping Corporation. The tiles are lost in transit. The loss is suffered by

Roofing.

Safety Supply Corporation in New York sells a truckload of protective suits, masks, and other safety gear to Toxic Recovery, Inc., in Connecticut, "F.O.B. New York." Safety Supply arranges with US Truckline to transport the goods. The cost of the transport will be paid by

Safety Supply.

Quest Outdoor Store orders RiverRun-brand kayaks from Sports Merchandise, Inc. Sports Merchandise mistakenly ships kayaks of the wrong size, which Quest rejects and returns via Trans-State Shipping Company. During the return, the kayaks are lost. The loss is suffered by

Sports Merchandise.

Spuds Corporation buys from Tater Farms, Inc., a potato crop that Tater plans to plant and harvest during the next growing season. Spuds plans to sell the potatoes to Tasty Foods Restaurants. After the potatoes are planted, but before they are harvested, an insurable interest in the crop exists in

Spuds and Tater, but not Tasty Foods.

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

True

Any explicit understanding between the buyer and the seller determines when title passes.

True

Both the buyer and the seller can have an insurable interest in identical goods at the same time.

True

Fungible goods are goods that are alike naturally or by agreement or trade usage.

True

Generally, all contracts are assumed to be shipment contracts if nothing to the contrary is stated in the contract.

True

Identification takes place when specific goods are designated as the subject mater of a sales or lease contract.

True

Identification, risk of loss, and insurable interest are all concepts that are involved in determining the rights and liabilities of parties to a contract.

True

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

True

If a seller is not a merchant, and the goods are not to be moved, the risk of loss passes to a buyer on tender of delivery.

True

If an owner holds fungible goods as an owner in common, he or she can pass title without actually separating the goods.

True

Effortless Workouts, Inc., offers to sell a treadmill to Farouk and sends it to him on a trial basis. This is

a sale on approval.

Varoom Motors, Inc., allows Weber to take a Xtrem-brand motorcycle for a "test run." Weber tries the cycle for a few hours, returns, and buys it. This is

a sale on approval.

Paramount Bookstores buys fifty cases of an assortment of books from Quixotic Publishing Company with the right to return the unsold books in lieu of payment. This is

a sale or return.

Big Red Drinks, Inc. contracts to buy two tons of cranberries from Super Fruits, Inc. The contract states that Super Fruits is required to ship the cranberries to Big Red Drinks by Speedy Wind Air Freight. The contract is

a shipment contract.

Outdoor Outfitters Store contracts to buy fifty tents from Pitched Camp, Inc. Unless the contract states otherwise, it is assumed to be

a shipment contract.

Ron, a representative for Statewide Freight Inc., delivers a receipt issued by Tina, the owner of United Warehouse, for goods in storage to World Products, Inc., a buyer of the goods. This is

a warehouse receipt.

Barley that fills County Grain Co-op's silo is fungible if the barley is

alike naturally, by agreement, or by trade usage.

Home Appliance Corporation contracts with Instate Trucking Company to take a selection of appliance repair parts to Journey Airlines, Inc., with Journey to transport the goods to a KeepSafe Company warehouse. Instate Trucking, Journey Airlines, and KeepSafe each acknowledge possession of the goods by a document of title. Instate Trucking, Journey Airlines, and KeepSafe are

bailees.

Jason contracts with Golf Carts Unlimited, Inc. to buy five golf carts. The contract lists the five carts as GC001, GC002, GC003, GC004, GC005. Identification

has taken place.

Equipment Rentals Corporation (ERC) agrees to lease two backhoes to Dig & Fill Construction, Inc. Before any interest in the backhoes can pass from ERC to Dig & Fill, they must be

in existence and identified as the goods in the contract.

NutriRich, Inc., sells fifty cases of Omega 3 capsules to Good Health stores, but before Good Health takes physical possession, the cases are lost. Under the UCC, the parties' rights and obligations with respect to the loss depend on the concept of

insurable interest.

Liz buys a car from Midtown Motors, paying with a check that is later dishonored. Liz later offers the car to Nick for cash. As the seller in the transaction with Nick, Liz's title to the car is

voidable.

Pam buys from Midtown Motors a used sport utility vehicle (SUV). The SUV was manufactured by GEM Vehicles, Inc., and previously owned by Ron. Regarding title to the SUV, Pam acquires

whatever title Midtown had.