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Exam 18: Title and Risk of Loss

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Question 21

Multiple Choice

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Mountainside 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) a bill of lading.
B) a destination contract.
C) a shipment contract.
D) a warehouse receipt.

E) A) and C)
F) B) and D)

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Question 22

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When the risk of loss for goods passes from a seller to a buyer is generally determined by the contract between the parties.

A) True
B) False

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Question 23

Multiple Choice

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Quaff n' Quench Café buys twenty-five bags of Columbia coffee beans from Roasted Bean Brokers, Inc. The parties agree to ship the oranges "F.O.B. Quaff n' Quench " via Swiftline Trucking Company. The oranges rot in transit. The loss is suf?fered by

Megan, an agent for a department store, orders one hundred dresses from Sal's Clothing Shop for the Spring Blossom Sale. There is no specific agreement in the sale contract indicating when title will pass to the department store. The title will pass to the department store when

Before a seller can have an insurable interest in goods, the goods must be identified to a contract.

A buyer has an insurable interest in identified goods only if he or she has title to the goods.

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

Ralph, a representative for Statewide Truck & Transport Company, delivers a warehouse receipt to Thelma, the owner of United Storage Warehouse. A warehouse receipt is

Grace purchases three tons of fine merino wool on behalf of Woolen Creations. Woolen Creations wants the wool to remain in the warehouse where it is being stored until it is needed. Grace makes an offer for the wool on Monday. The offer is accepted on Tuesday. The warehouser gives Woolen Creations a warehouse receipt on Wednesday. Woolen Creations picks up the wool from the warehouse three months after the sale. Title for the wool passed to Woolen creations

Fay pays $800 for a new iPad to Global Goods, Inc. Global holds the iPad until Fay picks it up. Global is

Brad leaves an iPod at Computer Sales & Repair (CSR) to have the battery replaced. CSR sells the iPod to Doris, who does not know that it belongs to Brad. Brad can recover from

If the tender or delivery of goods is so nonconforming that the buyer has the right to reject them, the risk of loss does not pass to the buyer until cure or acceptance.

Under the UCC, the risk of loss necessarily passes with title.

A contract between Fresh Fruit Corporation and Green Grocer, Inc., re?quires Fresh Fruit to deliver goods to Green Grocer's place of business. This is

NutriRich, Inc., sells fifty cases of Omega 3 capsules to Good Health stores, but before Good Health takes physical possession, the cases are lost. Under the UCC, the parties' rights and obligations with respect to the loss depend on the concept of

Safety Supply Corporation in New York sells a truckload of protective suits, masks, and other safety gear to Toxic Recovery, Inc., in Connecticut, "F.O.B. New York." Safety Supply arranges with US Truckline to transport the goods. The cost of the transport will be paid by

A seller with voidable title can transfer good title to a good faith purchaser for value.

Good Food Corporation buys from Home Farms, Inc., a rice crop that Home Farms plans to plant and harvest during the next growing season. Good Food plans to sell the rice to Interstate Grocery Stores. After the rice is planted, but before it is harvested, an insurable interest in the rice ex?ists in

A buyer and a seller cannot normally have an insurable interest in iden?tical goods at the same time.

Future goods are goods that are not both existing and identified to the contract.