Chapter 17
Title and Risk of Loss:
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1. The UCC allows title to goods can pass before the goods come into existence.
a. True
b. False
2. When goods have been identified and marked for shipment, a buyer has an insurable interest in the goods.
a. True
b. False
3. If a Seller and Buyer agree on "FOB Place of Shipment" (a shipment contract) but do not agree when risk of loss passes, and partial damage or total destruction occurs during shipment, the Seller is responsible for the loss.
a. True
b. False
4. K-Smart and Darrel signed a contract which stated "FOB Place of Destination." This means that the risk of loss passes to Darrel when the goods are placed on K-Smart's loading dock.
a. True
b. False
5. If partial damage or total destruction occurs before the risk of loss has passed to a buyer, it is the buyer's loss.
a. True
b. False
6. A person with voidable title cannot legally transfer rights to the property.
a. True
b. False
7. Tender of delivery means that the seller or the seller's agent actually hands the goods to the buyer.
a. True
b. False
8. In a non-shipment contract, whether a merchant or non-merchant is involved in the transaction is not relevant to determining risk of loss.
a. True
b. False
9. If a seller under an "FOB Destination" contract sends nonconforming goods, the risk of loss in transit is on the buyer.
a. True
b. False
10. COD means "call on delivery."
a. True
b. False
11. A sales transaction in which a customer in a department store tells the clerk that he or she wants to buy one of the shirts advertised in the newspaper relates to:
a. identified goods.
b. unidentified goods.
c. future goods.
d. fungible goods.
12. Absent an agreement to the contrary, in a contract "place of shipment" contract, risk of loss:
a. passes to the buyer when the goods are delivered to the carrier.
b. passes to the buyer when the goods are identified.
c. does not pass to the buyer until the goods are received.
d. passes to the buyer midway between the sellers and buyers locations.
13. We-Cut-Em purchased 200 lawnmowers from M&N Mower. We-Cut-Em is located in Iowa and M&N is in Tennessee. The purchase order states F.O.B. Iowa. The contract makes no mention of risk of loss or title. We-Cut-Em will have an insurable interest in the mowers:
a. when they are identified.
b. as it sells the mowers.
c. at the time of the contract.
d. when the mowers are tendered to You Cut Um.
14. In a contract for delivery at destination the title and the risk of loss pass to the buyer:
a. when the goods are successfully given to the carrier.
b. when the goods are tendered to the buyer.
c. when the goods are marked for the buyer.
d. when the goods are insured by the buyer.
15. In a sale of identified goods where the seller is a non-merchant, the risk of loss passes to the buyer:
a. at the time of the contract.
b. upon delivery.
c. upon tender of delivery.
d. upon payment by the buyer.
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