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Exam 22: Title, Risk of Loss, and Insurable Interest

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Question 21

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"Used Car Problems." Marcy purchased a used car from ABC Motors. Six months later the police seized the car from Marcy on the basis that it was a stolen vehicle. Marcy asked for her money back from ABC Motors. The manager there told her that the car was not stolen, but that even if it were, ABC Motors acted in good faith with no knowledge of a theft; and that, therefore, Marcy, as a good-faith purchaser, had a good title. ABC Motors had also sold a used car to Frank who wrote a bad check for the car and left town, but not before selling the car to Betty. Betty purchased the car with no knowledge of any problem with the check. ABC Motors asked Betty to return the car, but she refused. She explained that she had given the car to her son, Billy. -What kind of title did Frank have?

A) Good
B) Void
C) Voidable
D) Absolute
E) Illegal

F) C) and D)
G) B) and E)

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Question 22

Multiple Choice

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Which of the following is true regarding types of common-carrier delivery contracts?

A) Common-carrier delivery contracts include origin and shipment contracts, but not destination or transfer contracts.
B) Common-carrier delivery contracts include destination contracts, but not origin, transfer, or shipment contracts.
C) Common-carrier delivery contracts include transfer contracts but not origin, shipment, or destination contracts.
D) Common-carrier delivery contracts include origin and transfer contracts, but not destination contracts.
E) Common-carrier delivery contracts include origin and destination contracts, but not transfer contracts.

F) A) and E)
G) A) and B)

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Question 23

Multiple Choice

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The UCC defines a[n] _____ as the passing of title from the seller to the buyer for a price.

With a simple delivery contract involving a merchant, when does risk of loss transfer to the buyer?

"Wrecked Furniture." Ralph buys new furniture for his living room from Good Times Furniture. It is agreed that the goods will be placed with a common carrier for delivery. The contract between Ralph and Good Times is ambiguous regarding whether the seller had the duty to deliver the goods only to the common carrier's hands or whether the seller had the duty to deliver the goods to Ralph's home. Unfortunately, on the way to Ralph's home, through no fault of the delivery driver, the delivery truck was involved in a collision, and the furniture was significantly damaged. -Which of the following is a type of contract that Ralph and Good Times Furniture entered into?

Which of the following was the result in the Case Opener involving whether title had passed to the entity that received shipment although shipment was made to the wrong party thereby preventing a lawsuit by the assignee of the original owner against the shipping company?

If a shipment contract is vague or ambiguous on the issue, an origin contract will be presumed.

"Used Car Problems." Marcy purchased a used car from ABC Motors. Six months later the police seized the car from Marcy on the basis that it was a stolen vehicle. Marcy asked for her money back from ABC Motors. The manager there told her that the car was not stolen, but that even if it were, ABC Motors acted in good faith with no knowledge of a theft; and that, therefore, Marcy, as a good-faith purchaser, had a good title. ABC Motors had also sold a used car to Frank who wrote a bad check for the car and left town, but not before selling the car to Betty. Betty purchased the car with no knowledge of any problem with the check. ABC Motors asked Betty to return the car, but she refused. She explained that she had given the car to her son, Billy. -Assuming that the car was stolen prior to delivery to ABC Motors and without the knowledge of any representative of ABC Motors, what kind of title did ABC Motors have?

If a buyer and seller execute a contract and the seller subsequently places the goods with a common carrier for delivery to the buyer, the parties have executed a common-carrier delivery contract.

Which of the following references goods that are in some kind of storage so the seller cannot transfer physical possession of them?

Which of the following occurs when goods are delivered to a buyer via a common carrier, such as a trucking line?

Which of the following is true if an owner entrusts the possession of goods to a merchant who deals in goods of that kind?

"Used Car Problems." Marcy purchased a used car from ABC Motors. Six months later the police seized the car from Marcy on the basis that it was a stolen vehicle. Marcy asked for her money back from ABC Motors. The manager there told her that the car was not stolen, but that even if it were, ABC Motors acted in good faith with no knowledge of a theft; and that, therefore, Marcy, as a good-faith purchaser, had a good title. ABC Motors had also sold a used car to Frank who wrote a bad check for the car and left town, but not before selling the car to Betty. Betty purchased the car with no knowledge of any problem with the check. ABC Motors asked Betty to return the car, but she refused. She explained that she had given the car to her son, Billy. -Assuming the car was stolen without any knowledge of ABC Motors, which of the following is true regarding the manager's statement that Marcy has a good title?

"Used Car Problems." Marcy purchased a used car from ABC Motors. Six months later the police seized the car from Marcy on the basis that it was a stolen vehicle. Marcy asked for her money back from ABC Motors. The manager there told her that the car was not stolen, but that even if it were, ABC Motors acted in good faith with no knowledge of a theft; and that, therefore, Marcy, as a good-faith purchaser, had a good title. ABC Motors had also sold a used car to Frank who wrote a bad check for the car and left town, but not before selling the car to Betty. Betty purchased the car with no knowledge of any problem with the check. ABC Motors asked Betty to return the car, but she refused. She explained that she had given the car to her son, Billy. -What kind of title did Betty have?

Which of the following occurs when the sale itself is contingent on approval?

Which of the following is held when someone unknowingly purchases stolen goods?

Which of the following occurs when purchased goods are transferred to the buyer from the seller at either the time of the sale or some time later by the seller's delivery, and the seller has an agent deliver the goods to the buyer?

With a simple delivery contract, when is an insurable interest in the buyer created?

Identification of when the risk of loss attaches is important in regards to the right of indemnification.

What does the term "FAS" when used as a shipping term represent?