Question 1

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

Accepted Answer

Cartage is a common carrier that acknowledges possession of goods and contracts to deliver them, making them a bailee.

Question 2

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

Accepted Answer

A shipment contract is a type of contract that obligates the seller to ship the goods to the buyer, but it does not require the seller to deliver the goods to a specific destination. The buyer assumes the risk of loss once the goods are delivered to a carrier for shipment. Therefore, unless the contract states otherwise, the purchase of fifty bicycles from Mountain Bikes, Inc. would be a shipment contract.

Question 3

Dirk steals Effie's necklace and sells it to Fiona.Effie can recover the necklace from Fiona

Accepted Answer

Effie can recover the necklace from Fiona under any circumstances because a thief cannot pass good title to stolen property, regardless of whether the buyer knew it was stolen or gave consideration.

Question 4

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

Accepted Answer

The term F.A.S. (Free Alongside Ship) indicates that the seller (Nuevo Farms) is responsible for delivering the goods to the transport carrier. Since the explosion occurred before the hay reached Overland Transport, the risk of loss remains with Nuevo Farms.

Question 5

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

Accepted Answer

Fungibility refers to the interchangeable nature of a good or asset. In this case, if the Alaskan salmon are alike naturally or through agreement or trade usage (such as being of the same species and size), then they can be considered fungible. It doesn't matter which specific salmon are caught or sold, as long as they meet the agreed-upon criteria. The fact that they are perishable and liable to deteriorate over time does not impact their fungibility.

Question 6

Aromatic Tea Company contract to sell tea to Savory Stores,Inc.The contract includes the term "F.O.B.Upriver City," which is Savory's location.This means that the contract is

Accepted Answer

"F.O.B. Upriver City" indicates that the seller, Aromatic Tea Company, is responsible for delivering the tea to the destination of Savory Stores, Inc. The contract is therefore a destination contract where the seller is responsible for the delivery of the goods to a specific location.

Question 7

Barb pays $1,000 for a new computer to Computer Products Corporation,which pays Discount Warehouse,Inc.,$50 to store the computer until Barb retrieves it.Discount Warehouse is

Accepted Answer

Discount Warehouse, Inc. is acting as a bailee by storing the computer on behalf of Computer Products Corporation and is responsible for its safekeeping until Barb retrieves it.

Question 8

Real Foods Corporation orders from Savory Company goods that are stored in an Uptown,Inc.,warehouse.Real Foods pays for the goods,delivery is via the transfer of a negotiable warehouse receipt,and Real Foods moves the goods out of the warehouse.The risk of loss passes to Real Foods when it

Accepted Answer

The risk of loss passes to Real Foods when it receives the negotiable warehouse receipt, as this indicates the transfer of ownership and control over the goods.

Question 9

Bree leaves a pair of new shoes at Cobbler's Shoe Store to be dyed.Cobbler's sells the shoes to Dian,who does not know that the shoes belong to Bree.Bree can recover from

Accepted Answer

Since Bree left the shoes with Cobbler's Shoe Store, they are responsible for returning the shoes to her. Dian purchased the shoes from Cobbler's Shoe Store without knowledge of who they belonged to, and thus cannot be held responsible for returning them to Bree. Bree can only recover the shoes from the store where she left them.

Question 10

Perfect Fit 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

Accepted Answer

RRI requested the desk to be left outside for pickup, indicating that the risk of loss transferred to RRI once Perfect Fit fulfilled their obligation to deliver the desk to the specified location.

Question 11

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

Accepted Answer

F.O.B. (Free on Board) indicates that the seller, Silky Material, is responsible for delivering the goods to a specified location, in this case, New Jersey. However, after that point, Tattered Clothing is responsible for all transportation costs and logistical arrangements. Therefore, the cost of transporting the fabric to Ohio will be paid by Tattered Clothing, Inc.

Question 12

Deep Storage Company holds goods for EZ Sales Corporation,which contracts to sell them to Fabric Stores,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 Fabric Stores

Accepted Answer

According to the facts given, the risk of loss will pass to Fabric Stores when they receive the bill of lading. Since the goods are represented by a negotiable bill of lading, it is an essential document for the transfer of ownership and liability. Therefore, Fabric Stores will assume the risk of loss only when they hold the bill of lading.

Question 13

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

Accepted Answer

A destination contract requires the seller to deliver the goods to a specific destination, which in this case is Green Grocer's place of business. A bill of lading is a document that serves as evidence of a contract for the carriage of goods by sea, while a shipment contract requires the seller to deliver the goods to a carrier for transport. A warehouse receipt is a document acknowledging the receipt of goods for storage in a warehouse. None of these options correctly describe the contract between Fresh Fruit Corporation and Green Grocer, Inc.

Question 14

Angie buys a lamp from Brite Lites Store,which agrees to keep it for Angie until she picks it up.Before Angie gets the lamp,a fire destroys the store and the lamp.The loss is suffered by

Accepted Answer

Brite Lites only. The store agreed to keep the lamp for Angie, so the store is responsible for the loss.

Question 15

Kip,a representative for Lite-Weight Shipping Company,delivers a bill of lading to Meg,the owner of Capacity Storage Warehouse.A bill of lading is

Accepted Answer

A bill of lading is a document issued by a carrier to acknowledge receipt of cargo for shipment.

Question 16

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

Accepted Answer

If the terms do not clearly indicate whether it is a destination or shipment contract, a court would usually presume that it is a shipment contract by default. In a shipment contract, the seller is only required to deliver the goods to the carrier and is responsible for any damage or loss that occurs during transit. Once the goods are in the carrier's possession, the buyer assumes the risk and responsibility for the goods.

Question 17

Gins pays $2,000 for a new HDTV to Imagine Corporation.Imagine holds the set until Gina picks it up.Imagine is

Accepted Answer

The answer of Gins pays $2,000 for a new HDTV...

Question 18

Leo buys a boat from his neighbor Moe,who is a fishing guide.Moe agrees to keep the boat in his storage shed until Leo picks it up.A tree falls on Moe's shed and destroys the boat.The loss is suffered by

Accepted Answer

As per the given scenario, Leo had already bought the boat from Moe. Therefore, the ownership of the boat had transferred from Moe to Leo. Even though the boat was in Moe's storage shed at the time of damage, the risk of loss had already passed to Leo as the owner. Hence, Leo suffers the loss alone.

Question 19

Fits-Like-A-Glove Shoes,Inc.,and Retail Footwear Stores enter into a contract for a sale of shoes.The contract indicates that the price includes transportation costs to a specific destination by including the term

Accepted Answer

F.O.B. (Free On Board) indicates that the seller is responsible for transportation of the goods to a specified location, but the buyer is responsible for any further transportation costs and assumes ownership once the goods are loaded onto the shipping vessel. Therefore, this term fits the description in the question.

Question 20

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

Accepted Answer

Under the terms of the contract, Ideal is responsible for delivering the goods to Ladle Carrier Company for transport to Jolly's warehouse. Therefore, risk of loss passes to Jolly when Ideal delivers the goods to Ladle. Once the goods have been delivered to Ladle, it is no longer Ideal's responsibility to ensure their safe arrival at Jolly's warehouse.

Quiz 19: Title and Risk of Loss