CH21

Equip Corporation agrees to lease a woodchipper to Forest Management LLC. Before any interest in the woodchipper can pass from Equip to Forest, it must be

in existence and identified as the goods in the contract.

Risk of loss cannot pass from seller to buyer unless the goods are identified to the contract.

True

The UCC's provisions relating to passage of title do not apply to leases of goods.

True

When a bailee is holding goods that are to be delivered under a contract without being moved, risk of loss passes when the bailee acknowledges the buyer's right to the goods.

True

Appliance Corporation sells Best-brand vacuum cleaners to Cash Discount Stores and other retailers. Appliance will have an insurable interest in the vacuums as long as

Appliance retains title to the goods.

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 phones from Digital Devices Inc. Consumers Choice later discovers a defect in the phones, revokes acceptance, and returns the goods via GoBack, Inc. During the return, the goods are lost. The loss is suffered by

Digital Devices.

United Wear Inc. and Winter Gear stores enter into a contract for a sale of coats. Their contract can indicate that the price includes transportation costs to a specific destination by including the term

F.O.B.

An owner in common of fungible goods can pass title and risk of loss to the buyer only by actually separating the goods.

False

If the contract calls for the sale or lease of specific goods that are already in existence, identification takes place when the goods are shipped.

False

If the seller's title is void, the seller has the power to transfer good title to a good faith purchaser.

False

If the seller's title is voidable, a good faith purchaser acquires no title, and the real owner can reclaim the goods.

False

In a shipment contract, risk of loss remains with the seller until the goods are delivered to the buyer at the buyer's place of business.

False

On a contract—"F.O.B. New York"—for a sale of almonds by a broker in California, the risk of loss passes to the buyer when conforming goods are placed in the possession of the carrier.

False

Title can pass to the buyer from the seller before the goods are identified to the contract.

False

When a buyer breaches a contract, risk of loss remains with or reverts to the seller.

False

When a buyer breaches a sales contract, the risk of loss remains with the seller to the extent of any deficiency in the buyer's insurance coverage.

False

When no documents of title are required, title does not pass.

False

Garden Stores order a specific assortment of rose bulbs from Hybrid Company. Hybrid mistakenly ships a selection of annuals, which Garden rejects and returns via Indie Transport Inc. During the return, the annuals are lost. The loss is suffered by

Hybrid.

Jared buys a kayak from a Lake Craft store, which agrees to keep it for him until he picks it up. Before Jared gets the kayak, an unforeseen tornado destroys the store and the goods. The loss is suffered by

Lake Craft.

Organic Café orders five gallons of PureMaid-brand olive oil from Quico Oil Inc. Quico mistakenly ships Pure soy oil, which Organic keeps, despite the nonconformity. The oil is destroyed in a fire. The loss is suffered by

Organic.

Pipe Company orders six irrigation pumps from Quality Pumps Inc. The pumps are stored in Re-storage Warehouse. Under the terms of the order, Quality must give Pipe a warehouse receipt for the goods, which the buyer will then pick up. Title to the goods passes to Pipe when

Quality gives Pipe the warehouse receipt.

Quaff Café buys twenty-five crates of apples from Reynaldo Produce, Inc. The parties agree to ship the apples "F.O.B. Quaff" via Swift Trucking Company. The apples 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.

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

Sports Merchandise.

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

True

A trucking company that normally issues documents of title for goods its receives is a bailee.

True

Buyers and lessees have an insurable interest in identified goods.

True

Generally, the buyer acquires whatever title the seller has to the goods sold.

True

Generally, the party in breach of a sales contract bears the risk of loss.

True

Goods that are not both existing and identified to the contract are called future goods.

True

Identification is the express designation of the goods provided for in a contract.

True

Mountain 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.

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

a shipment contract.

Red Bev LLC contracts to buy two tons of strawberries from Sweet Fruits, Inc. The contract states that Sweet Fruits is required to ship the strawberries to Red Bev by Truck Transport Inc. The contract is

a shipment contract.

Sure Good Appliance Corporation contracts with Trucking Company to take a selection of appliances to United Railroad Inc. for United to transport the goods to a VeriSafe Company warehouse. Trucking, United, and VeriSafe each acknowledge possession of the goods by a document of title. These parties are

bailees.

Security Insurance Agency contracts with Town Motors to buy six cars. The contract lists the cars by their VINs (vehicle identification numbers). Under the UCC, identification

has taken place.

Identification gives

the buyer or lessee the right to insure certain goods.

In a sale of oranges from Citrus Grove Farms to Donuts & Juice Inc. to be delivered after the harvest, a fire destroys the fruit before it is picked. Under the UCC, the rights and liabilities of Citrus and Donuts in this circumstance are generally determined by

the concepts of identification and risk of loss.

When the risk of loss passes is generally determined by

the terms of a contract for a sale or lease of goods.

Parties to sales or lease contracts often obtain insurance coverage to protect against damage, loss, or destruction of the goods.

True

A seller's title to goods being sold is voidable if the goods

were obtained by fraud.

Elena buys from Fiesta Autos a used pick-up truck. The truck was manufactured by Gem Vehicles, Inc., and previously owned by Hanna. Regarding title to the truck, Elena acquires

whatever title Fiesta had.

If a lessor is a merchant who is holding the goods for the buyer to pick up, the risk of loss passes to a lessee when the lessee takes physical possession of the goods.

True

If the seller is a merchant who is holding the goods for the buyer to pick up, the risk of loss passes when the buyer takes physical possession of the goods.

True

In a sales contract, the passage of risk of loss from a seller to a buyer gives the buyer the right to insure the goods.

True

The parties can agree in their contract when identification will take place.

True

Runners Feet, a shoe store, orders one hundred pair of athletic shoes from Speedster Inc. Absent a contrary agreement between the parties, title will pass to Runners Feet when

the seller physically delivers the goods.