Business Law Chapter 20

Crest Jewelers buys diamonds from Paramount Gems to resell with the right to return the unsold stones in lieu of payment. This is

a sale or return

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

A Shipment Contract

Town Style Stores orders Hidebound-brand leather jackets from Cowhide & Cotton Company (CCC). CCC mistakenly ships denim jackets, which Town re-jects and returns via Valu Transport, Inc. During the return, the jack¬ets are lost. The loss is suffered by

CCC

Catchy Gadgets Corporation and Discount Outlets, Inc., enter into a contract for a sale of kitchenware. The contract requires Catchy to deliver the goods to Rapido Carrier Company for transport to Discount's warehouse. Risk of loss passes to Discount when

Catchy delivers the good to Rapido

Essen Corporation buys from Fallow Farms, Inc., a rice crop that Fallow plans to plant and harvest during the next growing season. Essen plans to sell the rice to Gourmet Grocery Stores. After the rice is planted, but before it is harvested, an insurable interest in the rice ex¬ists in

Essen, Fallow, but not Grocery

Harley's Home Store buys furniture from Relax-a-by Furniture, Inc. The parties agree that the furniture will be shipped "F.O.B. Relax-a-by's ware¬house" to Harley's via Jiffy Shipping Corporation. The furniture is lost in transit. The loss is suffered by

Harley's Home Store

Matrix Material Corporation in New Jersey sells fifty tons of fabric to Natural Fit Clothing, Inc., in Ohio, "F.O.B. New Jersey." Matrix arranges with Outbound Truckline to transport the goods. The cost of the transport will be paid by

Matrix

Mitchell buys 100 bales of hay from New Grain Fields. The parties agree that the hay will be transported "F.O.B. New Grain Fields" via Farm County Trucking Company. Farm County's truck and the hay are lost in a fire following an accident. The loss is suffered by

Mitchell

Motor Vehicles Service Company orders NoBounce-brand shock absorbers from Parts & Tools, Inc., to be delivered by the seller. Before Parts & Tools' truck arrives with the goods, Motor Vehicles tells Parts & Tools it will not pay. The shock absorbers are destroyed in transit. The loss is suffered by

Motor Vehicles to the extent of a deficiency in Parts and Tools' insurance coverage

NuStores accepts a shipment of QuikView-brand 3D HD DVD players from Open-Ur-Eyes, Inc. NuStores later discovers a defect in the players, revokes acceptance, and returns the players via Playback, Inc. During the return, the play¬ers are lost. The loss is suffered by

Open Ur Eyes

Pie Sales Corporation orders ReadyMade-brand pies from Savory Foods Company. Savory identifies the goods. Before they are shipped to Pie Sales, an insurable interest in the goods exists in

Pie Sales and Savory Foods

Finished Furnishings, Inc., agrees to lease an Oak Top-brand desk to Research Resources, Inc. (RRI), which agrees to pick it up at Streetside Warehouse. Before RRI retrieves the desk, it is stolen. The loss is suf¬fered by

RRI

Megan, an agent for a department store, orders one hundred dresses from Sal's Clothing Shop for the Spring Blossom Sale. There is no specific agreement in the sale contract indicating when title will pass to the department store. The title will pass to the department store when

Sal's Clothing Shop physically delivers the dresses to the department store

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 re-turn, the kayaks are lost. The loss is suffered by

Sports Merchandise

Suki leaves a Update-brand watch at Timepiece Sales & Repair to be fixed. Timepiece sells the watch to Vera, who does not know that the watch belongs to Suki. Suki can recover from

Timepiece

Twyla buys a Voracious-brand bicycle from U-Pik-It Bike Store, which agrees to keep the bike for Twyla until she picks it up. Before Twyla gets the bike, a fire destroys the store and the bike. The loss of the bike is suffered by

U-Pik_it Bike Store

Open Road Showroom sells new and used motorcycles. Some of the motorcycles are held on consignment, including six consigned by Pedro Cycles, Inc. Like most consignments, Open Road's deal with Pedro Cycles is

a bailment

QuickFreeze Storage, a bailee, holds goods for Restaurant Purveyor, Inc., which has contracted to sell the goods to Seafood Dining Company. The goods are to be delivered without being moved. The risk of loss will pass to Seafood Dining when it receive

a negotiable document of title

Laraby, a representative for Merchandise Shipping Company, delivers a bill of lading to Caitlin, the owner of Dockside Warehouse. A bill of lading is

a receipt for goods signed by a carrier

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

a sale on approval

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

Wild Alaskan sockeye salmon that fill the hold of Dexter's fishing boat are fungible if the fish are

alike naturally, by agreement, or by trade usage

Dragonaire Corporation contracts with Excel Trucking Company to take goods to Fly-By Airlines, Inc., with Fly-By to transport the goods to a Geo Storage Company warehouse. Excel, Fly-By, and Geo each acknowl¬edge possession of the goods by a document of title. Excel, Fly-By, and Geo are

bailees

Foster 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

Leasing Equipment Corporation (LEC) agrees to lease five computer workstations to Mapmakers, Inc. Before any inter¬est in the workstations can pass from LEC to Mapmakers, they must be

in existence and identified as the goods in the contract

Uri sells 100 cases of vitamins to Wanda, but before she 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

risk of loss