National American University

BUSINESS L 3100

Chapter 24-TITLE AND RISK OF LOSS

TRUE/FALSE

1)Supply chain management refers to the management issues of risk and title as goods flow through commerce.

 

                                           

 

2. A seller's insurable interest in goods always terminates with the passage of the title to the buyer.

 

                                           

 

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

 

                                           

 

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

 

                                           

 

5. Future goods can be identified before they are manufactured.

 

                                           

 

6. Fungible goods are always homogeneous.

 

                                           

 

7. Once goods in a contract have been identified the buyer holds an insurable interest in them.

 

                                           

 

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

 

                                           

 

9. A document of title is not sufficient for a creditor to take an interest in goods.

 

                                           

 

10. Someone who finds and resells stolen property passes on a good title to a good faith purchaser.

 

                                           

 

11. A buyer with a voidable title cannot pass on valid title to a subsequent good faith purchaser.

 

                                           

12. 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.

 

                                           

 

13. 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.

 

                                           

 

14. 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.

 

                                           

 

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

 

                                           

 

16. In an FOB shipment contract title to the goods pass to the buyer when goods are delivered to the carrier.

 

                                           

 

17. In a non-shipment contract risk of loss passes to the buyer when the merchant seller makes the goods available to said buyer.

 

                                           

 

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

 

                                           

 

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

 

                                           

 

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

 

                                           

 

 

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

 

                                           

 

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

                                           

 

23. A consignment sale is treated as a sale or return under UCC Article 2.

 

                                           

 

24. In a self-service store a sale cannot occur until the goods are paid for.

 

                                           

 

25. “Without reserve” auctions give the auctioneer the right to withdraw the goods from the sale process if the bids are not high enough.

 

                                           

 

MULTIPLE CHOICE

 

1. When particular goods have been selected by either the buyer or the seller, or both, as being the goods called for by the sales contract, the goods are said to be
   1. identified.
   2. actualized.
   3. realized.
   4. materialize

                                           

 

2. Goods that are not yet in existence or are not yet owned by the seller are                  goods.
   1. fungible
   2. nonexistent
   3. future
   4. contingent

                                           

 

3.                           goods are goods that, when mixed together, are indistinguishable.
   1. Tangible
   2. Intangible
   3. Heterogeneous
   4. Fungible

 

 

4. If an owner has acted in a way that misleads others, the owner may be                     from asserting ownership.
   1. estopped
   2. voided
   3. breached
   4. identified

                                           

 

5. If a contract contains a delivery term of                        , the seller’s responsibility is to get the goods to the buyer.
   1. FOB place of shipment

1. 2. FOB place of destination
   3. CIF place of shipment
   4. CIF place of destination

                                           

 

6. In the case of a nonshipment contract, risk of loss passes to the buyer upon actual receipt of goods:
   1. only if the seller is a merchant
   2. only if the seller is a nonmerchant
   3. only if the buyer has already paid for them
   4. in all nonshipment contracts

                                           

 

7. Title passes to the buyer at delivery:
   1. in all situations
   2. when goods are shipped FOB place of destination
   3. when goods are shipped FOB shipment
   4. never

                                           

 

8. If shipped goods are damaged or destroyed after risk of loss passes:
   1. the contract is avoided
   2. the seller has breached the contract
   3. the buyer has the option to accept or not accept the goods
   4. it is the buyer’s loss

 

 

9. In a                          , no sale takes place (meaning there is no transfer of title) until the buyer accepts the goods.
   1. conditional sale
   2. contingency sale
   3. sale or return
   4. sale on approval

 

 

 

10. A                           is a completed sale with an option for the buyer to return the goods.
    1. conditional sale
    2. contingency sale
    3. sale or return
    4. sale on approval

                                           

 

11. The expense and the risk of return in a sale or return situation is on the:
    1. seller.
    2. buyer.
    3. lienholder.
    4. secured creditor.

                                           

12. In a consignment, the dealer-consignee is often referred to as a(n):
    1. remainder.
    2. factor.
    3. quotient.
    4. exponent.

                                           

 

13. A consignment sale is treated as a(n)                         under UCC Article 2, and the dealer-consignee has full authority to sell the goods for the consignor and can pass title to the goods.
    1. ordinary sale
    2. final sale
    3. sale on approval
    4. sale or return

rrrr

 

 

 

 

 

 

 

 

14. Most courts hold that when a customer takes an item from the shelf in a self-service store, there is:
    1. no sale.
    2. a sale.
    3. a contract to sell.
    4. a conditional sale.

                                           

 

15.                          reserve auctions are those that give the auctioneer the right to withdraw the goods from the sale process if the bids are not high enough.
    1. Qualified
    2. Restricted
    3. With
    4. Without

                                           

 

16.                           reserve auctions are those in which the goods must be sold regardless of whether the auctioneer is satisfied with the levels of the bids.
    1. With
    2. Without
    3. Unqualified
    4. Unrestricted

                                           

 

 

17. When goods are sold at an auction in separate lots, the title to each lot passes:
    1. when the winning bidder tenders payment for the lot.
    2. when the lot is received by the winning bidder.
    3. only when all lots have been sold.
    4. when the auctioneer announces that the lot in question has been sold to the bidder.