Business Law Test 2 Chapter 19
Warehouse receipt Bill of Lading
2 types of documents of title:
delivered
For both types of Documents of Title, title passes from the buyer to the seller when the document is _______
classification
Goods are identified based upon their ______.
entrustment rule
If an owner entrusts the possession of his or her goods to a merchant who deals in the goods of that kind, the merchant has the power to transfer all rights (including title) in the goods to a buyer in the ordinary course of business.
identified
If the goods are not identified and there is no movement, the title passes when the goods are ______.
tendered
In a destination contract, the title passes from the seller to the buyer when the goods are _____.
tender of delivery
In a destination contract, there is a _________ requirement: requirement that the buyer is notified that the goods exist and are available for delivery
carrier/shipper
In a shipment contract, the title passes to the buyer when the goods are delivered to the _______.
Insurable interest
In looking at loss, we look at _____ _____.
seller
The _____ has an insurable interest because he has the goods and te title to the goods by virtue of the fact of his/her ownership. He/she has acts as a supplier of goods, therefore he/she has the risk of loss prior to the sale and until the goods are paid for.
identified
The buyer's insurable interest arises when the goods are ____. For that reason the seller and the buyer can have an insurable interest at the same time.
Shipment Destination
There are 2 types of contracts for the passage of title for the goods when the goods are to be moved: ___ contract ___ contract
complete
Title to the goods passes from the buyer to the seller when the seller's performance is _____.
entered into
When goods are not being moved and there is no Document of Title, title passes from the seller to the buyer at the time the contract is ____ _____.
Document of title
When the goods are not being moved, the passage of title is determine by whether the seller must deliver a ___________.
Future
___ goods are identified when they are shipped, marked, or otherwise identified by the seller (as described in the contract)
Fungible
____ goods are identified the same way as future goods- when they are shipped, marked, or otherwise identified by the seller (as described in the contract)
Existing
____ goods are identified when they are set aside or selected by the buyer or seller
Identification
_____(of the goods) distinguishes the goods called for in the contract from the seller's other goods.
Fungible goods (fungibles)
commodities; goods that are indistinguishable (lose their identity when they are mixed) & cannot be separated ex: seeds, grain, milk
Future goods
goods not yet in existence when the contract is entered (i.e. have not been made or procured yet)
Existing Goods
goods that physically exist when the contract is entered
Cost, insurance, and freight (CIF)
pricing term that means that the price included the cost of the goods and the costs of insurance and freight. The seller must at his or her own expense and risk, put the goods into the possession of a carrier. The buyer bears the risk of loss during transportation
Free on Board (FOB) point of shipment
requires the seller to arrange to ship the goods and out the goods in the carriers possession. The buyer bears the shipping expense and the risk of loss while the goods are in transit
no-arrival, no-sale contract
requires the seller to bear the expense and risk of loss of the goods during transportation. However, the seller is under no duty to deliver replacement goods to the buyer because there is no contractual stipulation that the goods will arrive at the appointed destination
Free on board place of destination (FOB) destination
requires the seller to bear the expense and risk of loss until the goods are tendered to the buyer at the place of destination
Ex-ship (from the carrying vessel)
requires the seller to bear the expense and risk of loss until the goods are unloaded from the ship at its port of destination
Free alongside (FAS) port of shipment
requires the seller to deliver and tender the goods alongside the named vessel or on the dock designated and provided by the buyre. The seller bears the expense and risk of loss until this is done. The buyer bears the shipping costs and the risk of loss during transport
Destination Contract
requires the seller to get the goods to the buyer at the destination (the buyer's place of business)
Shipment contract
requires the seller to ship the goods by common carrier (train, truck, airplane, ship, etc.) requires 2 things: 1. seller must make adequate shipping arrangements 2. to deliver the goods to the shipper
Title
right to possess property
warehouse receipt
used for storage; represents ownership of goods
Bill of lading
used for transportation of goods (air and land shipment); represents ownership of goods