East Mississippi Community College

ECON 2123

Chapter 24-TITLE AND RISK OF LOSS

TRUE/FALSE

1)A sellers insurable interest in goods always terminates with the passage of the title to the buyer.

 

                                           

 

2. Goods are called identified goods when they have been selected as the goods called for by a sales contract.

 

                                           

 

3. When a person picks out a specific necktie and purchases it, the transaction involves identified goods.

 

                                           

 

4. When goods are existing and identified to the contract and there is no document of title, the title to the goods passes to the buyer at the time of the transaction.

 

                                           

 

5. Future goods are involved when a store is temporarily out of an advertised item but tells you that the item can be ordered from the factory.

 

                                           

 

6. Title to goods can be transferred without the actual delivery of the goods involved.

 

                                           

 

7. Title and risk of loss always pass to the buyer at the same time.

 

                                           

 

8. When negotiable documents of title to goods are sold, the risk of loss and the title to the goods pass to the buyer when the documents are delivered to the buyer.

 

                                           

 

9. Heterogeneous goods are goods that, when mixed together, are indistinguishable.

 

                                           

 

10. A bailee can pass good title to a good-faith purchaser, even when the sale was not authorized by the owner and the bailee has no title to the goods but is in the business of selling those particular types of goods.

 

                                           

11. If a contract contains a delivery term of FOB place of shipment, the seller’s obligation under the contract is to deliver the goods to a carrier for shipment.

 

                                           

 

12. Under a CF contract, the seller must get the goods to a carrier and buy an insurance policy in the buyer’s name to cover the goods while in transit.

 

                                           

 

13. COD is a shipping term that requires the buyer to pay in order to gain physical possession of the goods.

 

                                           

 

14. If partial damage or total destruction occurs after the risk of loss has passed to a buyer, it is the buyer's loss.

 

                                           

 

15. In a contract for FOB place of shipment, the risk of loss passes to the buyer at the same time as title does: when the goods are delivered to the carrier, that is, at the time and place of shipment.

 

                                           

 

16. In a sale on approval, the buyer’s approval must be demonstrated by express words.

 

                                           

 

17. If a seller under a shipment contract sends nonconforming goods, the risk of loss in transit is on the buyer.

 

                                           

 

18. If a buyer purchases goods on approval, the buyer's creditors cannot reach such goods until there is an approval.

 

                                           

 

19. In a sale on approval, the risk of loss passes to the buyer when the buyer takes possession of the goods.

 

                                           

 

20. A sale or return is a completed sale with an option for the buyer to return the goods.

 

                                           

 

21. In a sale or return transaction, until the actual return of the goods is made, title and risk of loss remain with the buyer.