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