BADM Ch. 21 (Brief Hypotheticals)

Daniel, a merchant in the business of selling appliances, sold a refrigerator to Michelle, a retail customer. Michelle paid for the refrigerator but did not have access to a moving truck to transport the refrigerator. Daniel agreed to hold the refrigerator until the next day. Later that night, a fire in Daniel's store destroyed the refrigerator and other merchandise. Who has risk of loss for the refrigerator in this situation?

Daniel has risk of loss since he is a merchant.

Daniel, a lawyer, sold a refrigerator to his friend Michelle for $1,000. Michelle did not have access to a moving truck to transport the refrigerator. Daniel agreed to hold the refrigerator until the next day. Later that night, an accidental fire in Daniel's home destroyed the refrigerator. Who has risk of loss for the refrigerator in this situation?

Michelle has risk of loss because Daniel is not a merchant

Mark, a college student, agreed to sell his car to Henry for $5,000. The contract required Mark to take the car on that same day to a mechanic where Henry was going to have certain repairs made. Henry paid Mark the money, kicked the tires and said, "I'm glad you're mine," and drove off. Mark then drove the car on to the trailer and set off for the two-hour drive to the mechanic. Has there been a sale?

No, not until delivery to the mechanic.

Alex sees Mona's ring, and he thinks it is very valuable. He uses physical duress to cause her to give him the ring, and he quickly sells it to Hanna for $5,000. A month later, Mona discovers that Hanna has her ring. Can Mona get the ring back?

No, since Hanna was a good faith purchaser for value.

Patience entered into a "sale or return" agreement with Bill's Tortilla Company in which Bill's was to provide fresh tortillas to Patience each week for sale in Patience's store. One week, a thief broke into Patience's store and stole thirty packages of Bill's tortillas. Who has the responsibility for the losses caused by the theft?

Patience, since a sale or return places risk of loss on the party in possession of the goods.

Commercial GC, Ltd. orders 100 doors from a company in California. They are sent "F.O.B. Hartford, Connecticut," but they are damaged in transit. What is the consequence?

The California company is required to bear the loss since the doors had not yet reached the F.O.B. point.

Wired Up, Inc. shipped nonconforming goods to Chase. Which of the following best describes risk of loss concerning the goods?

The risk of loss will remain with the seller until remedy of the defect or acceptance.

Michael is a guest at George's home. While there, he goes into the library and picks up a music box that is part of George's collection. Michael overwinds the stem and it breaks. Hoping George won't notice, Michael takes the music box for repair to a jeweler who sells similar ones. The jeweler fixes it, but forgets to tag it and an unsuspecting clerk sells it to Robert. Michael is frantic. Can George get the music box from Robert?

Yes, Robert has assumed only Jack's title, which is no title at all.

Sam, a seller in Miami, enters into a contract that states that goods are to be delivered to Maria, a buyer in New York. Title is to remain with Sam until delivery. This is:

a destination contract.

Howey stole a laptop from Jessica and then sold it to his friend Monica for $50. Monica has:

a void title to the laptop.