BLAW Chpt. 17

Funglibe goods

Goods that are alike by physical nature, by agreement, or by trade usage. Ex. wheat, oil, and wine that are identical in type and quantity

Entrustment rule

The transfer of goods to merchant who deal sin goods of that kind and who may transfer those goods and all right to them to a buyer in the ordinary course of business

Buyer in the ordinary course of business

A buyer who, in good faith and without knowledge that the sale violates the ownership rights or security interest of a 3rd party in the goods, purchase the goods in ordinary course of business from a person in the business of selling godson that kind

Destination contract

A contract in which the seller is required to ship the goods by carrier and deliver them at a particular destination. The seller assumes liability for any losses or damage to the goods until they are tendered at the destination specified in the contract

Good faith purchaser

A purchaser who buys without notice of any circumstances that would put a person of ordinary prudence on inquiry as to whether the seller has valid title to the goods being sold

Sale on approval

A type of conditional sale in which the buyer may take the goofs on a trial basis. The sale becomes absolute only when the buyer approves of (or satisfied with) the goods being sold

Sale or return

A type of conditional sale in which title and possession pass form the seller to the buyer; however, the buyer retains the option to return the goods during a specified period even though the goods conform to the contract

Insurable Interest

An interest either in a person's life or well-being or in property that is sufficiently substantial that insuring against injury (or death of) the person or against damage to the property does not amount to a mere wagering (betting) contract

Shipment contract

Contract in which the seller is required to ship the goods by carrier. The buyer assumes liability for any losses or damage to the goods after they are delivered to the carrier. Generally, all contracts are assumed to be shipment contracts if nothing to the contrary is stated in the contract

Identification

In the sale of goods, the express designation of the specific goods provided for in the contract

Document of title

Paper exchanged in the regular course of business that evidences the right of possession. It requires the complete retention of control over the dispostion of property

Insolvent

Under the UCC, a term describing a person who ceases to pay :his debts in the ordinary course of business or cannot pay his debts as they become due or is insolvent within the meaning of federal bankruptcy law

A bill of lading is a receipt signed by a warehouse for goods stored in a warehouse. a. True b. False

a. False

The means test forces more people to file for Chapter 7 bankruptcy rather than gave their debts discharged under Chapter 13. a. True b. False

a. False

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

a. False

Roasters Corporation and Outdoor Barbecue, 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 a. Roasters delivers the goods to Speedy. b. Outdoor begins to use the griill. c. Roasters and Outdoor enter into their contract. d. Speedy transports the goods to Outdoor.

a. Roasters delivers the goods to Speedy.

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

a. True

Under a shipment contract, if the seller does not make a reasonable contract for transportation or notify the buyer of the shipment, the buyer can reject the goods if a material loss results. a. True b. False

a. True

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

a. True

Ralph, a representative for Statewide Truck & Transport Company, delivers a warehouse receipt to Thelma, the owner of United Storage Warehouse. A warehouse receipt is a. a receipt issued by a warehouser for goods in a warehouse. b. a receipt for goods signed by a carrier. c. an invoice for payment for loading and carting verified by a seller. d. an order to ship goods signed by a buyer

a. a receipt issued by a warehouser for goods in a warehouse.

A seller has an insurable interest in goods as long as the goods are in existence. a. True b. False

b. False

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

b. False

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

b. False

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 a. Ursula. b. Watercraft. c. the government agency that failed to foresee the tornado. d. Verismooth.

b. Watercraft.

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 a. Consumers Choice. b. Consumers Choice's customers by an increase in prices of other goods. c. Digital Devices. d. GoBack.

c. Digital Devices.

Growers 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 a. Hilltop Farms. b. all of the parties as tenants in common in equal measure. c. Growers Mart. d. Refrigerated Trucking.

c. Growers Mart.

Shane's Auto Parts orders twenty tires from Tough Tires, Inc. The truck delivering the tires to Shane's is in an accident and ten of the tires are damaged. Shane's Auto Parts a. must accept the entire shipment. b. can resell the goods without obligation to the seller. c. may inspect the tires and make a partial acceptance. d. must reject the entire shipment.

c. may inspect the tires and make a partial acceptance.

Candy Corporation orders Delicioso-brand chocolate from Edibles Distribution Company. Edibles identifies the goods. Before they are shipped to Candy Corporation, an insurable interest in the goods exists in a. all of the parties as tenants in common. b. Candy Corporation and Delicioso. c. Delicioso and Edibles Distribution. d. Candy Corporation and Edibles Distribution.

d. Candy Corporation and Edibles Distribution.

Resource Drilling Company buys equipment for use in its operations, borrowing $1 million from Security Finance Corporation for a security interest in the equipment. The next day, Resource Drilling borrows $500,000 from Touchstone Loans, also for a security interest in the equipment. Resource Drilling defaults on both loans. Suppose that two weeks after Resource Drilling takes possession of the equipment, Security Finance and Touchstone Loans file financing statements, with Touchstone Loans filing first. In that circumstance, the party with priority to the equipment is a. Resource Drilling. b. Security Finance and Touchstone Loans proportionately. c. Security Finance only. d. Touchstone Loans only

d. Touchstone Loans only

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. a bailment. b. a lease. c. a sale or return. d. a sale on approval.

d. a sale or return