Business Law Chpt 20 Title, Risk and Insurable Interest

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Uri sells 100 cases of vitamins to Wanda, but before she 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

a. physical possession.
b. product liability.
c. risk of loss.
d. title.

c. risk of loss.

EZ Equipment Corporation leases six forklifts to Faulty Refining Company, but as the forklifts are delivered, they are lost in an explosion. Under the UCC, the parties' rights and obligations with respect to the loss depend on the concept of

a. physical possession.
b. product liability.
c. risk of loss.
d. title.

c. risk of loss.

Office Equipment Leasing, Inc. (OEL), agrees to lease five computer workstations to Product Promotion Corporation (PPC). Before any interest in the workstations can pass from OEL to PPC, they must be

a. in existence and identified as the goods in the contract.
b. in existence only.
c. identified as the specific goods designated in the contract only.
d. none of the choices.

a. in existence and identified as the goods in the contract.

A specific grade of corn that fills Dean and Ethel's silo is fungible. This means that the corn is

a. alike naturally or by agreement or trade usage.
b. fundamentally different.
c. fundamentally edible.
d. perishable.

a. alike naturally or by agreement or trade usage.

Alaskan salmon that fill the hold of Bill and Carla's fishing boat are fungible if the salmon are

a. alike naturally or by agreement or trade usage.
b. fundamentally different.
c. fun, good, and edible.
d. liable to deteriorate over time.

a. alike naturally or by agreement or trade usage.

Rita orders 1,000 cases of 1/4-inch nuts from Steel Parts Company's 10,000-case lot. Steel Parts separates 1,000 cases from the lot. Title and risk of loss

a. remain with Steel Parts until Rita acknowledges tender of delivery.
b. remain with Steel Parts until Rita accepts 1,000 cases.
c. shift to Rita after she accepts the nuts and inspects them for defects.
d. shift to Rita when Steel Parts separates the cases.

d. shift to Rita when Steel Parts separates the cases.

Kip, a representative for Little Shipping Company, delivers a bill of lading to Meg, the owner of Normal Warehouse. A bill of lading is

a. an invoice for payment for loading and carting.
b. an order to ship goods by carrier to a certain destination.
c. a receipt for goods signed by a carrier.
d. a receipt issued by a warehouser for goods in a warehouse.

c. a receipt for goods signed by a carrier.

XL Electronics orders thirty hard drives from Yang Computers, Inc. The hard drives are stored in City Warehouse. Under the terms of the order, Yang must give XL a warehouse receipt for the goods, which XL will then pick up. Title to the goods passes to XL when

a. City Warehouse stores the goods.
b. XL orders the goods.
c. XL picks up the goods.
d. Yang gives XL a warehouse receipt for the goods.

d. Yang gives XL a warehouse receipt for the goods.

Rani leaves a pair of new shoes at Soles Shoe Store to be dyed. Soles sells the shoes to Tia, who does not know that the shoes belong to Rani. Rani can recover from

a. neither Tia nor Soles Shoe Store.
b. Soles Shoe Store only.
c. Soles Shoe Store or Tia.
d. Tia only.

b. Soles Shoe Store only

Lou's Bicycle Store contracts to buy fifty bicycles from Mountain Bikes, Inc. Unless the contract states otherwise, this is

a. a bill of lading.
b. a destination contract.
c. a shipment contract.
d. a warehouse receipt.

c. a shipment contract.

Ideal Gadgets, Inc., and Jolly Outlets Corporation enter into a contract for a sale of kitchenware. The contract requires Ideal to deliver the goods to Ladle Carrier Company for transport to Jolly's warehouse in Metro City. Risk of loss passes to Jolly when

a. Ideal delivers the goods to Ladle.
b. Ideal identifies the goods to the contract.
c. Ladle transports the goods to Jolly's warehouse.
d. the goods arrive in Metro City.

a. Ideal delivers the goods to Ladle.

Dan steals Eve's necklace and sells it to Fiona. Eve can recover the necklace from Fiona

a. only if Fiona did not know that the necklace was stolen.
b. only if Fiona gave legally sufficient consideration for the necklace.
c. only if Fiona knew that the necklace was stolen.
d. under any circumstances.

d. under any circumstances.

Home Products Store buys furniture from Ideal Furniture, Inc. The parties agree that the furniture will be shipped "F.O.B. Ideal's warehouse" to Home Products via Jiffy Shipping Corporation. The furniture is lost in transit. The loss is suffered by

a. Home Products and Ideal Furniture, but not Jiffy Shipping.
b. Home Products, Ideal Furniture, and Jiffy Shipping.
c. Home Products only.
d. Ideal Furniture only.

c. Home Products only.

Quiet Soles, Inc., and Retail Footwear Stores enter into a contract for the sale of shoes. The contract indicates that the price includes transportation costs to a specific destination by including the term

a. C.I.F.
b. delivery ex-ship.
c. F.A.S.
d. F.O.B.

d. F.O.B.

Real Tea Company and Savory Stores, Inc., enter into a contract for a sale of tea. The contract includes the term "F.O.B. Upriver City," which is Savory's location. This means that the contract is

a. a bailment contract.
b. a destination contract.
c. a shipment contract.
d. a transportation contract.

b. a destination contract.

With a bill of lading, Cartage Common Carrier Company acknowledges possession of certain goods and contracts to deliver them. Cartage is

a. a bailee.
b. a buyer in the ordinary course of business.
c. a good faith purchaser for value.
d. an F,O,B.

a. a bailee.

Fine Material Corporation in New Jersey sells fifty tons of fabric to Great Clothing, Inc., in Ohio, F.O.B. New Jersey. The cost of transporting the fabric to Ohio will be paid by

a. Fine Material.
b. Great Clothing.
c. New Jersey.
d. Ohio.

b. Great Clothing.

Raw Material, Inc., and Sewn Fabric Corporation enter into a contract for a sale of muslin. The terms do not clearly indicate whether it is a destination or shipment contract. A court would most likely presume that it is

a. a bailment contract.
b. a destination contract.
c. a shipment contract.
d. a transportation contract.

c. a shipment contract.

Martin buys 1,000 bales of hay from Nuevo Farms. The parties agree that the hay will be transported F.A.S. via Overland Transport Company. Nuevo Farms' truck carrying the hay explodes before reaching Overland Transport. The loss is suffered by

a. Martin and Nuevo Farms, but not Overland Transport.
b. Martin, Nuevo Farms, and Overland Transport.
c. Martin only.
d. Nuevo Farms only.

d. Nuevo Farms only.

Brothers Cafe buys 100 bags of oranges from Sisters Citrus Company. The parties agree to ship the oranges "F.O.B. Brothers Cafe" via Tonnage Trucking Company. The oranges rot in transit. The loss is suffered by

a. Brothers Cafe and Sisters Citrus, but not Tonnage Trucking.
b. Brothers Cafe only.
c. Brothers Cafe, Sisters Citrus, and Tonnage Trucking.
d. Sisters Citrus only.

d. Sisters Citrus only.

Perfect Furnishings, Inc., agrees to lease a desk to Research Resources, Inc. (RRI), which requests that the desk be left outside Streetside Warehouse for RRI to pick up. Before RRI retrieves the desk, it is stolen. The loss is suffered by

a. Perfect Furnishings and RRI, but not Streetside Warehouse.
b. Perfect Furnishings only.
c. Perfect Furnishings, RRI, and Streetside Warehouse.
d. RRI only.

d. RRI only.

Leo buys a bicycle from his brother, Mike, who is a used car dealer. Mike agrees to keep the bike at his house until Leo picks it up. A tree falls on Mike's garage and destroys the bike. The loss is suffered by

a. Leo and Mike.
b. Leo only.
c. Mike only.
d. neither Leo nor Mike.

b. Leo only.

Twyla buys a bicycle from U-Pik-It Bike Store, which agrees to keep the bike for Twyla until she picks it up. Before Twyla gets the bike, a fire destroys the store and the bike. The loss is suffered by

a. neither Twyla nor U-Pik-It
b. Twyla and U-Pik-It.
c. Twyla only.
d. U-Pik-It only.

d. U-Pik-It only.

Commercial Storage (CS), a bailee, holds goods for Delta Distributors, Inc., which has contracted to sell them to Eagle Company. The goods are to be delivered without being moved. The risk of loss will pass to Eagle when Eagle receives

a. a copy of Delta's contract with CS.
b. a copy of Delta's contract with Eagle.
c. a negotiable document of title.
d. a notice that Eagle's payment for the goods has cleared.

c. a negotiable document of title.

Delta Products Corporation contracts with Excel Trucking Company to take goods to Flight Airlines, Inc., with Flight to transport the goods to a Geo Storage Company warehouse. Excel, Flight, and Geo each acknowledge possession of the goods by a document of title. Excel, Flight, and Geo are

a. bailees.
b. consignees.
c. lessees.
d. sellers.

a. bailees.

City Storage Company holds goods for Downtown Sales Corporation, which contracts to sell them to eStores, Inc. The goods are to be delivered without being moved and are represented by a negotiable bill of lading. The risk of loss passes to eStores

a. if City refuses to honor the bill of lading.
b. if Downtown gives the bill of lading to City.
c. if the goods are lost due to an "act of God."
d. when eStores receives the bill of lading.

d. when eStores receives the bill of lading.

My-Tee Purchasing Corporation orders from National Sales, Inc., goods that are stored in a Outstate Properties, Inc., warehouse. My-Tee pays for the goods, delivery is via the transfer of a negotiable warehouse receipt, and My-Tee moves the goods out of the warehouse. The risk of loss passes to My-Tee when it

a. orders the goods.
b. pays for the goods.
c. receives the negotiable warehouse receipt.
d. moves the goods out of the warehouse.

c. receives the negotiable warehouse receipt.

Relax Recreation Toys, Inc., allows Sandy to take a Relax boat for a "test run." Sandy tries the boat for a few hours, returns, and buys it. This is

a. a bailment.
b. a consignment.
c. a sale on approval.
d. a sale or return.

c. a sale on approval.

Great Workouts, Inc., offers to sell a home gym to Ida and sends it to her on a trial basis. This is

a. a consignment.
b. a delivery ex-ship.
c. a sale on approval.
d. a sale or return.

c. a sale on approval.

Eagle Company sells new and used motorcycles. Some of the motorcycles are held on consignment, including six consigned by Fine Cycles, Inc. While the Fine cycles are in Eagle's possession, title to them is held by

a. Eagle and Fine jointly.
b. Eagle only.
c. Eagle's creditors only.
d. Fine only.

b. Eagle only

Diamond Camera Shop receives lenses from Excel Optical, Inc., under a sale or return agreement. While the lenses are in Diamond's possession, title is held by

a. Diamond and Excel jointly.
b. Diamond only.
c. Diamond's creditors only.
d. Excel only.

b. Diamond only.

Town Style Stores orders leather jackets from Unique Clothing Company. Unique mistakenly ships denim jackets, which Town rejects and returns via Value Transport, Inc. During the return, the jackets are lost. The loss is suffered by

a. Town and Unique, but not Value.
b. Town only.
c. Town, Unique, and Value.
d. Unique only.

d. Unique only.

Diner's Cafe orders five gallons of transfat-free olive oil from EZ Distributors, Inc. EZ mistakenly ships soy oil, which Diner's keeps, despite the nonconformity. The oil is destroyed in a fire. The loss is suffered by

a. Diner's and EZ, but not Diner's customers.
b. Diner's, EZ, and Diner's customers.
c. Diner's only.
d. EZ only.

c. Diner's only.

NuStores accepts a shipment of DVD players from Open-Ur-Eyes Video, Inc. NuStores later discovers a defect in the players, revokes acceptance, and returns the players via Playback, Inc. During the return, the players are lost. The loss is suffered by

a. NuStores only.
b. NuStores and Open-Ur-Eyes, but not Playback.
c. NuStores, Open-Ur-Eyes, and Playback.
d. Open-Ur-Eyes only.

d. Open-Ur-Eyes only.

Little Jewelry Store orders display racks from Marketing Supplies, Inc. (MSI). MSI mistakenly ships racks of the wrong size and color, which Little rejects and returns via New Shipping Company. During the return, the racks are lost. The loss is suffered by

a. Little only.
b. Little and MSI, but not New Shipping.
c. Little, MSI, and New Shipping.
d. MSI only.

d. MSI only.

Essen Corporation buys from Fallow Farms, Inc., a rice crop that Fallow plans to plant and harvest during the next growing season. Essen plans to sell the rice to Gourmet Grocery Stores. After the rice is planted, but before it is harvested, an insurable interest in the rice exists in

a. Essen and Fallow, but not Gourmet Grocery.
b. Essen, Fallow, and Gourmet Grocery.
c. Essen only.
d. Fallow only.

a. Essen and Fallow, but not Gourmet Grocery.

Office Corporation (OC) orders five inkjet printers from Print Products, Inc. (PPI), to be delivered by PPI. Before PPI's truck arrives with the goods, OC tells PPI it will not pay. The printers are destroyed in transit. The loss is suffered by

a. OC and PPI equally.
b. OC only.
c. OC to the extent of a deficiency in PPI's insurance coverage only.
d. PPI only.

c. OC to the extent of a deficiency in PPI's insurance coverage only.

Quik Sales Corporation orders goods from Re Stock Company. Re plans to market the goods to consumers generally. Re identifies the goods. Before they are shipped to Quik, an insurable interest in the goods exists in

a. Quik and Re, but not consumers generally.
b. Quik only.
c. Quik, Re, and consumers generally.
d. Re only.

a. Quik and Re, but not consumers generally.

Orange Computer Corporation sells Pad-brand MP3 players to Quik Discount Stores and other retailers. Orange will have an insurable interest in the players as long as

a. Orange remains in business.
b. Orange retains title to the goods.
c. the goods are in existence.
d. there is no risk of loss.

b. Orange retains title to the goods.

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