CH 19

45. To prevent creditors from attaching consigned goods, a consignor should: A. Prominently post a sign at the consignee's place of business indicating their interest in the goods B. File a financing statement covering the goods under Article 8 of the UCC C. File a suit in the court against the consignee D. Sell the goods to Rolex's creditors for cash

.A. Prominently post a sign at the consignee's place of business indicating their interest in the goods

25. Under the UCC, identification of the goods to the contract: A. Causes title to pass at the time and place of contracting if delivery is to be made without moving the goods B. Occurs when the seller makes it verbally clear that the goods are those to which the contract refers C. Cannot result from actions of the seller, such as setting aside or marking the goods D. Occurs when the seller gives samples of the goods to the buyer

A. Causes title to pass at the time and place of contracting if delivery is to be made without moving the goods

17. Angela went to "Hairs R Us" to have her hair colored flame red and to get a permanent wave. Unfortunately, the hair color contained a chemical that reacted to the permanent wave solution resulting in Angela's hair turning a bright green and falling out. Under these circumstances, would a court likely apply Code provisions in determining the rights and responsibilities of the parties? A. Code provisions would not apply because Angela entered into a contract which was predominantly a service contract B. Code provisions would not apply because Angela is not a merchant C. Code provisions would probably apply because any contract involving the sale of goods is governed by the Code D. Code provisions would probably apply because Angela's hair is tangible personal property

A. Code provisions would not apply because Angela entered into a contract which was predominantly a service contract

31. Eloise took her prized toy poodle, Tiny, to Pam's Pet Store & Grooming to prepare Tiny for an upcoming dog show. Unknowingly, one of Pam's new employees sold the dog to Jas. Under these circumstances, which of the following statements is correct? A. Eloise cannot recover Tiny from Jas because under the UCC, Pam's could give good title to a buyer in the ordinary course of business B. Eloise can recover Tiny from Jas because Pam's did not have title to Tiny when it sold Tiny to Jas C. Eloise can recover the value of Tiny from the Jas or from Pam's because neither Pam's nor Jas have title to Tiny D. Eloise has no remedy against either Pam's or Jas

A. Eloise cannot recover Tiny from Jas because under the UCC, Pam's could give good title to a buyer in the ordinary course of business

34. In the terms of sales contracts, "FOB": A. Is an abbreviation for "Free on Board," which calls for the seller to deliver the goods free of expense and at the seller's risk B. Is an abbreviation for "Fee on Board," which calls for the buyer to pay a delivery fee in order to transfer goods from a shipper's possession C. Is an abbreviation for "Freight on Board," which verifies that the goods have been loaded properly at the shipping point D. Is an abbreviation for "Forbidden on board" to be used with goods which are illegally transported

A. Is an abbreviation for "Free on Board," which calls for the seller to deliver the goods free of expense and at the seller's risk

28. A seller who has voidable title: A. Can pass good title to a good faith purchaser for value B. Cannot pass good title to a good faith purchaser for value C. Can never pass good title D. Can pass good title if the purchaser gives good value

A. Can pass good title to a good faith purchaser for value

35. Jelly Manufacturer, a food processor in Chicago, placed a phone order with Grape Grower, a grower in California, for a quantity of perishable produce. The shipping term was "CIF" with payment to be made on delivery. Grower delivered the goods called for in the contract to a carrier and contracted for their shipment. However, it neglected to provide that the goods be shipped under refrigeration. The goods were loaded on a non-refrigerated boxcar and as a result the produce was spoiled when it reached Chicago. Under these circumstances: A. Grape Grower bears the risk of loss to the extent it is not covered by any insurance carried by the buyer because Grape did not make a reasonable contract for the carriage of the goods B. Jelly bears the risk of loss because under CIF shipment the buyer has to bear all risks C. Jelly bears the risk as the contract did not mention that Grape Grower guarantee their delivery D. Grape Grower bears risk of loss as he did not insure the goods

A. Grape Grower bears the risk of loss to the extent it is not covered by any insurance carried by the buyer because Grape did not make a reasonable contract for the carriage of the goods

36. In an FAS contract, the seller: A. Must deliver the goods alongside the vessel at his own risk and expense B. Must deliver the goods alongside the vessel at the buyer's risk and expense C. Must deliver the goods alongside the vessel at his own expense but at the buyer's risk D. Has title to goods till they are delivered alongside a vessel

A. Must deliver the goods alongside the vessel at his own risk and expense

27. A negotiable document of title: A. Serves as the contract between the seller and the shipper B. Identifies the seller as the one who has title and control of the goods C. Shows that title cannot be surrendered to the buyer until the seller explicitly instructs D. Shows that the buyer cannot reject the goods delivered

A. Serves as the contract between the seller and the shipper

22. When a contract is silent about the time for performance: A. The UCC takes the same position as the common law B. Performance must be tendered within what the buyer considers to be a reasonable time C. Payment for the goods is due at the time and place which the seller accepts D. The contract can be terminated by either party

A. The UCC takes the same position as the common law

40. If a buyer repudiates a contract for identified, conforming goods before risk of loss has passed to the buyer: A. The buyer is liable for a commercially reasonable time for any damage to the goods that is not covered by the seller's insurance B. The seller is liable for a commercially reasonable time for any loss or damage to the goods C. The buyer and the seller must share in the loss equally D . The buyer is liable for a commercially reasonable time for any loss or damage to the goods that is not covered by the buyer's insurance

A. The buyer is liable for a commercially reasonable time for any damage to the goods that is not covered by the seller's insurance

32. If Lily takes her diamond ring to Steve's Jewelers for routine cleaning and Steve sells the ring to Evan who is unaware that the ring is Lily's: A. Lily can recover the ring from Evan B. Lily can sue Steve for conversion, but cannot recover the ring from Evan because he was a buyer in the ordinary course of business C. Lily can recover the ring under the UCC's "entrusting rule." D. Lily cannot get the ring as Evan has good title to it

B. Lily can sue Steve for conversion, but cannot recover the ring from Evan because he was a buyer in the ordinary course of business

29. Under the UCC, the obligation of "good faith": A. Applies only to merchants B. Requires that parties to a contract must perform their duties with "honesty in fact in the transaction concerned." C. Is a limited concept because this requirement can be modified in the course of dealing or usage of trade D. Means that purchasers can avoid injury

B. Requires that parties to a contract must perform their duties with "honesty in fact in the transaction concerned."

21. Under the UCC, if the contract is silent about the place for delivery, the goods are to be delivered: A. At the site of the goods B. At the seller's place of business C. At the seller's residence, if it is not his place of business D. At any place the seller deems convenient

B. At the seller's place of business

44. In a sale on approval: A. Goods are delivered to the buyer primarily for exchange purposes B. Goods are delivered to the buyer primarily for the buyer's use C. Risk of loss and title automatically pass to the buyer D. Trial of goods is an acceptance from the time of delivery

B. Goods are delivered to the buyer primarily for the buyer's use

38. Patty buys a Persian rug from James, a plumber, in an online auction. James called Patty on Wednesday to inform her that she submitted the winning bid and that he would ship the rug to her on Friday. On Thursday, the rug was destroyed in a garage fire at James' house. Who bears the loss? A. James, as he has not delivered the goods B. Patty, as James has tendered delivery of goods C. Patty, as James is not a merchant D. Patty, as James was only providing a service

B. Patty, as James has tendered delivery of goods

43. In a return contract, goods are delivered to buyers: A. Primarily for personal use B. Primarily for resale C. Primarily for trial before deciding whether to buy or not D. For personal use and resale

B. Primarily for resale

24. When a contract merely requires the seller to ship the goods, title passes to the buyer when: A. The contract is signed by both parties B. The seller delivers the goods to the carrier C. The buyer pays the seller D. The goods are delivered by the carrier

B. The seller delivers the goods to the carrier

39. Tex ordered a bracelet for his wife for their wedding anniversary in June. He placed the order in March. While the jeweler guaranteed delivery within five business days, the bracelet nevertheless did not arrive until July. When the bracelet finally arrived, Tex refused to sign for it. Under these circumstances: A. Tex holds title to the bracelet B. Title will automatically be revested in the seller C. Title will be revested in the seller only after Tex files suit against the jeweler D. The risk of loss is covered by the buyer's insurance

B. Title will automatically be revested in the seller

23. According to the UCC, title to goods may pass: A. Only when the seller hands the buyer a certificate of title B. Upon identification by the buyer C. In any manner the parties agree D. Only after the seller delivers the goods at the buyer's residence

C. In any manner the parties agree

18. A lease of goods is: A. A transfer of the ownership of the goods belonging to another for a limited time B. Is transfer of the ownership of the goods belonging to another C. Is a transfer of the rights to possess and use the goods belonging to another D. Is a transfer of the rights to use the goods belonging to another

C. Is a transfer of the rights to possess and use the goods belonging to another

26. A buyer who rejects tender of goods: A. Still retains title B. Can still retain title under some circumstances C. Revests the seller with title D. Revests the seller with the risk of loss

C. Revests the seller with title

16. Which of the following is governed by Article 2 of the UCC? A. Lee contracted to build Sal's house B. Chris leased 1,500 square feet of retail space from Anne C. Sue contracted to sell 500 pairs of shoes to a department store D. Kim contracted to dress Sally for her wedding

C. Sue contracted to sell 500 pairs of shoes to a department store

30. Under the UCC, a buyer in the ordinary course of business: A. Is one who buys goods from a merchant, knowing that the sale violates the ownership rights of a third party B. Does not know that a sale violates the ownership rights of the original party C. Takes goods free of any security interest in the goods that their seller may have given a third party D. Is a person who transacts only with nonmerchants

C. Takes goods free of any security interest in the goods that their seller may have given a third party

19. In which of the following cases is the seller a "merchant for the purposes of the contract in question" under Article 2 of the UCC? A. Barbara, an accountant, sells her car to her nephew B. Ted, a veterinarian, sells his tractor to his neighbor C. Tec-E, a software company, contracts to sell a database program to a local NPO D. Tom, a used-car dealer, sells his microwave to Gary

C. Tec-E, a software company, contracts to sell a database program to a local NPO

41. Jeb's Sub Shack is an Indiana deli who purchased three new ovens from a manufacturer in Arkansas. The purchase order states "FOB Indiana." If the contract does not state risk of loss or title, Jeb's will have an insurable interest in the ovens when: A. It is delivered at his place in Indiana B. The contract becomes final C. The goods are identified to the contract D. It gets a title to the goods

C. The goods are identified to the contract

37. Buyer owned a retail store in Baltimore and Seller was a manufacturer in Los Angeles. If Buyer orders goods from Seller to be shipped "FOB Baltimore," when does risk of loss pass to Buyer? A. When Seller delivers goods to the carrier in Los Angeles B. When the goods are identified to the contract C. When the goods are delivered to their destination D. When the contract was made

C. When the goods are delivered to their destination

20. Adam offered to buy automobile batteries from Ben. Adam's purchase order was complete and certain as to all material terms except price, which was omitted. If Ben accepts Adam's offer and the price of the automobile batteries is well established in the industry, does a contract exist between Adam and Ben? A. No contract was formed between Adam and Ben B. A contract was formed between Adam and Ben only if it can be proved that the parties intended to enter a contract and orally discussed the price C . A contract was formed between Adam and Ben, but the price will be treated as a proposed addition to the contract which must be accepted by both parties D. A contract was formed between Adam and Ben even though the price term was omitted

D. A contract was formed between Adam and Ben even though the price term was omitted

33. Which of the following is an exception to the general UCC rule that a seller cannot pass better title to goods than he/she has? A. A person who has voidable title to goods can pass good title to a bona fide purchaser on exchange B. A buyer in the ordinary course of a retailer's business takes free of any interest in the goods that the retailer has given to the buyer C. A person who has voidable title to goods can pass good title if they sell the goods only to merchants D. A person who buys goods in the ordinary course of a dealer's business takes free of any claims of a person who entrusted those goods to the dealer

D. A person who buys goods in the ordinary course of a dealer's business takes free of any claims of a person who entrusted those goods to the dealer

42. Which of the following applies to an insurable interest in goods? A. Buyers have an insurable interest in goods the moment they pay for the goods B. Buyers have an insurable interest in goods the moment they get the title to the goods C. Sellers have an insurable interest in goods till the risk of loss is with them D. Sellers have an insurable interest in their goods as long as they have title to the goods or a security interest in them

D. Sellers have an insurable interest in their goods as long as they have title to the goods or a security interest in them