BUL- Quiz 14 Ownership and Risk

Marco sells goods to Byron for his personal use on the basis that the goods may be returned if Byron is not satisfied with them. The sale is: Question options: -a 'sale or return. -'a 'sale on approval.' -a consignment. -outside the UCC.

-'a 'sale on approval.'

Mike sold his car to Beth, who was to pick the car up at Mike's house by 12:00 noon on September 1. Mike was at his house waiting for Beth but she was late. In fact, when Beth arrived she discovered Mike's home and the car destroyed by a fire that started at 1:00 p.m. The risk of loss falls on: Question options: -Mike because Beth had not taken possession of the car. -Beth because Mike was ready, willing, and able to tender the car at 12:00 noon. -Beth because under the UCC, the buyer bears the risk of loss. -Mike, as he had possession of the car.

Beth because Mike was ready, willing, and able to tender the car at 12:00 noon.

Graham, an adult, purchases a car from a minor, and subsequently sells it to Harlow, another adult. Harlow paid full value for the car and had no reason to know that Graham had purchased the car from a minor. Which of the following best describes this situation? Question options: -Graham had good title and Harlow gets good title. -Graham had good title and Harlow gets a voidable title. -Graham had voidable title and Harlow gets good title. -Graham had void title and Harlow gets void title.

Graham had voidable title and Harlow gets good title.

Marco Manufacturing contracted to sell Kurtz Industries 3,000 iron clasps. The contract specified: F.O.B. Kurtz Industries. Upon arrival and inspection, the goods were rejected by Kurtz Industries because they did not conform to the contract specifications. In transit back to Marco Manufacturing, the common carrier's truck overturned and completely destroyed the clasps. Which statement is correct? Question options: -Marco may sue Kurtz for the contract price, as risk of loss transferred to Kurtz at the F.O.B. point. -Kurtz will not be liable for the purchase price. The risk of loss had not yet transferred since the goods were nonconforming. -The loss will be split between the parties upon a 50/50 basis. -The loss will be assigned to the party who could best bear the loss.

Kurtz will not be liable for the purchase price. The risk of loss had not yet transferred since the goods were nonconforming.

Imogene takes her diamond solitaire ring to Sparkle Jewelry Shop to have the prongs holding the diamond retipped and have the ring cleaned. The clerk at Sparkle says she will have to leave the ring and that it should be ready in about a week. When Imogene returns in a week to get her ring, she finds out that the ring has been sold. Which of the following is true? Question options: -Sparkle Jewelry Shop had the power to transfer all of Imogene's rights in the ring to a good faith buyer in the ordinary course of business. -This situation was a theft of the ring by Sparkle, and Sparkle must retrieve the ring and return it to Imogene. -The buyer of the ring must return it to Imogene since the buyer did not fully investigate whether Sparkle had good title to the ring. -Imogene has lost title to her ring and has no recourse since she is responsible for investigating the merchant's integrity before leaving her property.

Sparkle Jewelry Shop had the power to transfer all of Imogene's rights in the ring to a good faith buyer in the ordinary course of business.

On impulse, you purchase a travel trailer and ask your acquaintance, Max, if you can leave the trailer at the edge of his restaurant's parking lot until you can have a concrete pad built to store the trailer on your property. Max agrees. When you return for the trailer the next week, it is gone and you find out that Max sold it. You can: Question options: -recover the trailer because Max did not have any ownership interest to pass. -recover, but only if Max bought insurance to cover the trailer while it was on his property. -not recover because you "entrusted" the trailer to Max, who then had a right to sell it. -not recover because Max had only a voidable title to transfer.

recover the trailer because Max did not have any ownership interest to pass.

George's Grocery orders two dozen live lobsters from Sea Food Flyers. George's is to keep the lobsters happy by keeping them in a tank following certain instructions to keep the water at the right temperature, etc. The sale is made on a trial basis and George's may return all unsold lobsters at the end of 10 days. This contract is a: Question options: -contract to sell future goods. -conditional sale. -sale or return. -sale on approval.

sale or return.

In a consignment contract, the consignee: Question options: -holds title. -takes the goods intending to resell them, and the goods are subject to the claims of the creditors of the consignee. -is the party who leaves goods with the consignor to be resold. -cannot transfer title since the consignor retains the title.

takes the goods intending to resell them, and the goods are subject to the claims of the creditors of the consignee.

Microchip Computers is a retailer, which buys its inventory from Acme Co. on credit, giving Acme a security interest in the inventory. Hubert buys a computer from Microchip in the normal course of business. Hubert's title in the computer is: Question options: -a good title. -a voidable title. -Hubert has no title in the computer. Title does not pass to Microchip and therefore to Hubert until Microchip pays its debt in full to Acme. -Hubert has good title that is subject to Acme's security interest.

a good title.

Ruppart Manufacturing has a contract for the sale of 100 cases of teaching supplies to Teachers Co-op, Inc. Payment of the order is to be made in installments over the next year. Ruppart Manufacturing keeps a security interest in the cases sold to assure payment by Teachers Co-op, Inc. When the order is completed, Ruppart ships the order. Legally: Question options: -both Ruppart and Teachers have an insurable interest in the supplies. -only Ruppart has an insurable interest in the supplies. -only Teachers has an insurable interest in the supplies. -neither Ruppart nor Teachers has an insurable interest in the supplies.

both Ruppart and Teachers have an insurable interest in the supplies.

In January, Eddie contracts to sell 100 bushels of soybeans that fall. This contract: Question options: -is void. He cannot contract to sell a crop before it is even planted; the goods must be in existence. -is void. The soybeans must be identified to the contract at the time he contracts to sell them. -can be valid; but title to the soybeans cannot pass until the soybeans exist. -can be valid, and title to the soybeans passes when the contract is signed.

can be valid; but title to the soybeans cannot pass until the soybeans exist.

The term F.O.B.: Question options: -can indicate a destination or shipment contract. -stands for 'freight on board.' -requires the seller to insure the goods for the buyer's benefit. -shifts the risk of loss to the buyer when the goods are identified.

can indicate a destination or shipment contract.

Buyer is located in Des Moines, Iowa and seller is located in Sacramento, California. The contract specifies F.O.B. Des Moines. This contract is a: Question options: -destination contract. -sale or return. -shipment contract. -sale on approval.

destination contract.

Rayco Ski Shop purchased 500 pairs of skis from Skitron. Rayco is located in Colorado. Skitron's business is in Tennessee. The purchase order included the following term: "F.O.B. Colorado." The contract makes no mention of risk of loss or title. The contract can be described as a: Question options: -shipment contract. -destination contract. -bulk transfer. -sale on approval.

destination contract.