Ch. 23 Brief Hypotheticals
Mark agrees to sell his car to Henry for $5,000 on June 5. On the same day, Henry pays Mark the money, kicks the tires and says, "I'm glad you're mine," and drives off. The contract requires Mark to take the car to a mechanic on June 10, where Henry is going to have certain repairs made and take the car. On June 10, Mark gets the car onto a trailer and drives it to the mechanic. In this scenario, when does the title of the car pass to Henry? a. When it is delivered to the mechanic b. When Henry pays for the car c. When the contract is made d. When Henry makes the statement "I'm glad you're mine"
A
Office Mate, Inc. manufactures upscale leather office chairs primarily used by executives or in board rooms. It makes 50 chairs per day that get stored at its manufacturing facility. When an order is placed, the chairs get tagged for delivery. Office Mate has 100 black chairs and 100 brown chairs in its facility when Jenpro Corp. orders 20 brown chairs for its new office building. Before the chairs are prepared for delivery for the Jenpro order, the facility catches fire, destroying all the chairs. Which of the following is true of this scenario? a. Jenpro does not have to pay for the chairs because they were not identified goods. b. Jenpro does not have to pay for the chairs because they were identified goods. c. Jenpro has to pay for the chairs because the fire incident happened after the order was placed. d. Jenpro would, in fact, have to pay for the chairs that it ordered.
A
Commercial GC, Ltd. orders 100 doors from WoodWorks, a company in California. The doors are sent by WoodWorks in an FOB Hartford, Connecticut contract. The doors are damaged in transit. Which of the following is true of the scenario? a. Commercial GC, Ltd. must accept the doors and is responsible for any damages. b. WoodWorks will have to replace the doors or refund the money. c. The companies will have to split the loss since the doors were in transit when they were damaged. d. FOB has no meaning when damages occur; the parties will be returned to their original position before the contract was made.
B
Sand and Surfboards in Anaheim, California enters into an "FOB place of shipment: Anaheim" contract to sell 250 surfboards to Big Buy Stores in Miami, Florida. The contracts states that the boards will be transported by Tandem Trucks, a commercial carrier. When the truck, loaded with the surfboards, reaches Texas, it is involved in an accident and the surfboards get damaged and become unusable by Big Buy Stores. What is the likely outcome of this situation? a. Sand and Surfboards will have to replace all the boards and send a new shipment. b. Big Buy Stores must still pay for the goods according to the contract price and terms. c. Because the boards are no longer useable, Big Buy Stores does not have to pay for them. d. Tandem Trucks will have to pay for the boards because it took title when the surfboards were loaded onto its truck.
B
Dylan ordered 5 cases of plastic cups to use in his catering business from Plastics Worldwide, Inc. No shipment or delivery provision was made in the contract. In the context of the Uniform Commercial Code (UCC), which of the following is true of this scenario? a. Plastics Worldwide will be required to deliver the products to Dylan's place of business. b. Dylan will be required to take delivery at Plastics Worldwide's place of business. c. Plastics Worldwide will be required to ship the products to Dylan using a common carrier. d. If no shipment provision is made, no contract exists and there will be no delivery.
B (In the absence of a delivery provision in a contract, the place of delivery is the seller's place of business.)
Howey stole a laptop from Jessica and then sold it to a pawn shop where Monica bought it for $50. In this scenario, who has good title to the laptop? a. Howey b. Monica c. Jessica d. The pawn shop
C
RTC International, located in Miami, enters into a contract that states that its goods are to be delivered by Fast Freight, a commercial carrier, to Dayton Unlimited, a buyer in New York. If RTC wants to retain title until delivery, which of the following is the best option? a. A shipment contract b. A COD contract c. A destination contract d. An FAS contract
C
While Michael is visiting Mr. Kilorn, he goes into the library and picks up a music box that is part of Mr. Kilorn's collection. Michael overwinds the stem and it breaks. Mr. Kilorn 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 takes it and sells it to Robert. Who now has good title to the music box? a. Mr. Kilorn, because he did not intend for the music box to be sold. b. The jeweler, because the item was entrusted to him for repair and was sold accidentally. c. Robert, because he purchased the music box in good faith from a business that regularly sells those items. d. Mr. Kilorn, because the jeweler was not in the business of selling music boxes.
C
Big River Farms grows Granny Smith apples, which are then sold to different companies. This season, Big River produces 20,000 pounds of apples. Which of the following types of goods best describes the apples? a. Existing goods b. Future goods c. Identified goods d. Fungible goods
D
Connor wants to buy a new photocopier for his office but is not sure which one to get. Union Business Machines offers to let him try out its model 200 for ten days, saying that if he does not return the photocopier in ten days, he will be billed for the sale price. What type of sales contract is exemplified in this scenario? a. Sale or return b. Self-service sale c. Sale on consignment d. Sale on approval
D
