Q&A Hero

Q: The Magnuson-Moss Act requires a full warranty on the sale of goods.

Q: The UCC does not allow a seller to cancel a contract if the buyer is in breach although a lessor may do so.

Q: An express warranty is any description of the goods' physical nature or its use, either in general or specific circumstances that become part of the contract.

Q: A sample or model may constitute an express warranty.

Q: Under the UCC, warranties may not extend to third parties of a contract because of the rule of privity.

Q: The UCC assumes that the seller has defective title unless the seller proves otherwise.

Q: The UCC assumes that the seller has the right to transfer title free and clear of intellectual property rights of which the buyer does not have knowledge.

Q: To invoke the implied warranty of merchantability, the purchaser or lessee must have purchased or leased the good from a merchant.

Q: All warranties automatically arise under common law.

Q: The term "express warranties" is found in common law.

Q: Express warranties may be found in advertisements.

Q: Under UCC sections 2-301 and 2A-516(1), the basic obligation of the buyers and lessees is to accept and pay for conforming goods in accordance to the contract.

Q: Under the UCC a delay in delivery is not a breach of contract in circumstances in which performance has been made impracticable because a contingency has occurred that was not contemplated when the parties reached an agreement.

Q: Under the UCC, the seller or lessor must provide an opportunity to the buyer or lessee for a reasonable inspection before enforcing payment.

Q: The UCC adopted the common law of warranties in total.

Q: Under UCC Sections 250 and 2A-513, the right to cure refers to the obligation to fix errors in a contractual agreement, such as typographical errors.

Q: If goods identified in a contract are destroyed before the risk passes to the buyer, the seller must obtain substitute goods.

Q: A buyer who has accepted goods may later revoke the acceptance if the buyer can show that the defects substantially impair the value of the goods.

Q: Sometimes, language in the parties' agreement limits the rigidity of the perfect tender rule.

Q: When the buyer alleges that goods fail to conform to contract specifications, the buyer has the automatic right to reject the goods.

Q: Course of dealing is the history of dealings between the parties in the particular contract at issue.

Q: Conforming goods are goods that conform to UCC specifications.

Q: The ideal tender rule requires that the seller deliver goods in conformity with the terms of the contract.

Q: The perfect tender rule, which requires that the seller deliver the goods in conformity with the contract, is absolute and has no exceptions that reduce the rule's rigidity.

Q: List the eight options discussed in the text that may be available to a buyer/lessee when the seller/lessor is in breach.

Q: Under the UCC, sellers and lessors are obligated to accept and pay for conforming goods in accordance with the contract.

Q: Courts rely upon the UCC rules to clarify seller and lessor obligations when the contract or lease is unclear.

Q: The UCC requires good faith in the performance and enforcement of every contract.

Q: Set forth when an implied warranty of fitness for a particular purpose will be found.

Q: Marge ordered for her soccer team t-shirts with the name of the school shown on the front. The seller requested that Marge come in to inspect the first t-shirt before the others were made. Marge refused because she was too busy and told the seller to go ahead and print the shirts. On receipt of the shirts, Marge discovered that the school name was misspelled. Does Marge have any rights against the seller, and why or why not?

Q: Discuss the damages a seller or lessor may recover when a buyer or lessee is in breach and the goods are sold or leased to another party.

Q: Define "course of dealing" and "course of performance" and how these concepts affect the perfect tender rule.

Q: Set forth what the UCC requires in the way of good faith and the duty imposed on nonmerchants and merchants in regard to fair dealing.

Q: List the exceptions to title warranties.

Q: What needs to be shown under the UCC for goods to be found merchantable?

Q: Discuss when title and risk of loss pass to the buyer in a goods-in-bailment contract when (a) the seller has a negotiable document of title (b) the seller has a nonnegotiable document of title and (c) the seller has a contract or other instrument showing ownership that is not a negotiable or nonnegotiable document of title.

Q: What groups are considered "merchants" under the UCC, and what is the assumption under the UCC in regard to merchants as compared to ordinary buyers and sellers?

Q: Should the perfect tender rule be rejected and replaced with a concept of substantial performance?

Q: Set forth the five situations under which a buyer gets only voidable title in a sale.

Q: Belinda purchases a couch from Good Furniture Store. She pays for the couch, and the store agrees to deliver it. Unfortunately, on the way to her house, the vehicle overheats and burns, destroying the truck and the couch inside. Belinda asks for a refund or another couch. The storeowner refuses on the basis that risk of loss had passed to Belinda. Who will win the dispute and why? What would have happened if Belinda had purchased the couch at a yard sale, and the loss occurred while the seller was delivering it?

Q: List what is required in order for an offer to be considered a firm offer under the UCC. Also discuss the effect if a firm offer is silent as to time and compare that with the result of silence as to time under the common law. Under the UCC offers made by merchants are considered firm offers if the offer (1) is made in writing and (2) gives assurances that it will be irrevocable for up to three months despite a lack of consideration for the irrevocability. If a firm offer is silent as to time, the UCC assumes a three-month irrevocability period. The UCC contrasts with the common law, under which an offer is revocable at any time prior to acceptance unless a period of irrevocability is supported by some kind of consideration.

Q: List and describe the three types of title.

Q: Patty, who lives in East Tennessee, developed a new type of printer that required very little ink. As a merchant, she entered into contracts to sell the printer to a number of merchants of office supplies in the East Tennessee area for a charge of $600 each. She further entered into a number of contracts with merchants in other states and also in foreign countries. For printers sold in states other than Tennessee and for printers sold outside the U.S., she charged $1,001 each. Patty was a trusting soul who did not require that her arrangements be in writing because she believed that a person's word was his or her bond. She did, however, send a confirming memo to each client to which she received no objections. Patty manufactured a number of printers; but unfortunately, due to a downturn in the economy, a number of her buyers refused to proceed on their contracts, with several claiming that the contracts were unenforceable because they were not in writing. Which of the following is true regarding whether the contracts with clients in the East Tennessee area were required to be in writing? A. Because the contracts were for amounts priced at $500 or more, they were required to be in writing and signed by the buyer. B. Because the printers were sold in Patty's home state, no writing was required. C. Because the contracts were for amounts priced at $1,000 or more, they were required to be in writing and signed by the buyer. D. Because the contracts were for amounts priced at $500 or more, they were required to be in writing; but Patty's memo was sufficient to satisfy the requirement. E. Because the contracts were for amounts priced at $1,000 or more, they were required to be in writing and signed by the buyer; but Patty's memo was sufficient to satisfy the requirement.

Q: Patty, who lives in East Tennessee, developed a new type of printer that required very little ink. As a merchant, she entered into contracts to sell the printer to a number of merchants of office supplies in the East Tennessee area for a charge of $600 each. She further entered into a number of contracts with merchants in other states and also in foreign countries. For printers sold in states other than Tennessee and for printers sold outside the U.S., she charged $1,001 each. Patty was a trusting soul who did not require that her arrangements be in writing because she believed that a person's word was his or her bond. She did, however, send a confirming memo to each client to which she received no objections. Patty manufactured a number of printers; but unfortunately, due to a downturn in the economy, a number of her buyers refused to proceed on their contracts, with several claiming that the contracts were unenforceable because they were not in writing. Which of the following is true regarding whether the contracts with clients in the U.S. outside of Tennessee were required to be in writing? A. Because the contracts were for amounts priced at $500 or more, they were required to be in writing and signed by the buyer. B. Because the printers were sold outside Patty's home state, no writing was required. C. Because the contracts were for amounts priced at $1,000 or more, they were required to be in writing and signed by the buyer. D. Because the contracts were for amounts priced at $500 or more, they were required to be in writing; but Patty's memo was sufficient to satisfy the requirement. E. Because the contracts were for amounts priced at $1,000 or more, they were required to be in writing and signed by the buyer; but Patty's memo was sufficient to satisfy the requirement.

Q: Patty, who lives in East Tennessee, developed a new type of printer that required very little ink. As a merchant, she entered into contracts to sell the printer to a number of merchants of office supplies in the East Tennessee area for a charge of $600 each. She further entered into a number of contracts with merchants in other states and also in foreign countries. For printers sold in states other than Tennessee and for printers sold outside the U.S., she charged $1,001 each. Patty was a trusting soul who did not require that her arrangements be in writing because she believed that a person's word was his or her bond. She did, however, send a confirming memo to each client to which she received no objections. Patty manufactured a number of printers; but unfortunately, due to a downturn in the economy, a number of her buyers refused to proceed on their contracts, with several claiming that the contracts were unenforceable because they were not in writing. Assuming the Contract for the International Sale of Goods is in effect, which of the following is true regarding whether the contracts with clients outside the U.S. were required to be in writing? A. Because the contracts were for amounts priced at $500 or more, they were required to be in writing and signed by the buyer. B. Assuming credible and reasonable proof of any contract at issue, because the Contract for the International Sale of Goods applied, no writing was required. C. Because the contracts were for amounts priced at $1,000 or more, they were required to be in writing and signed by the buyer. D. Because the contracts were for amounts priced at $500 or more, they were required to be in writing; but Patty's memo was sufficient to satisfy the requirement. E. Because the contracts were for amounts priced at $1,000 or more, they were required to be in writing and signed by the buyer; but Patty's memo was sufficient to satisfy the requirement.

Q: 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 got wrecked and the furniture was significantly damaged. Which of the following is a type of contract that Ralph and Good Times Furniture entered into? A. A common-carrier delivery contract B. A trucking contract C. A goods-in-bailment contract D. A conditional sales contract E. A conditional delivery contract

Q: 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 got wrecked and the furniture was significantly damaged. What type of contract is presumed based upon the fact that the contract was 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? A. Transit B. Location C. Destination D. Origin E. Voidable

Q: 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 wrecked and the furniture was significantly damaged. Which of the following is true regarding the risk of loss at the time the goods were damaged? A. The risk of loss was with the furniture store. B. The risk of loss was with Ralph. C. The risk of loss was split 50-50 between Ralph and the furniture store. D. The risk of loss was with Ralph only if the driver is determined to be an agent of the furniture store. E. The risk of loss was with the furniture store only if the driver is determined to be an agent of the furniture store.

Q: 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; that even if it were stolen, ABC Motors acted in good faith with no knowledge of a theft; and that, therefore, no refund was legally required. ABC Motors had also sold a used car to Frank who wrote a bad check for the car and left town but not before he sold the car to Betty who paid $1,100, a fair price for the car, believing that Frank had all rights to sell it. ABC Motors asked Betty to return the car, but she told ABC to forget it. Assuming that ABC Motors was an innocent purchaser from the thief, which of the following is true regarding Betty's obligations, if any? A. She is not required to return the car because Frank held voidable title, not void title. B. She is not required to return the car under the UCC because she paid over $1,000 for it. C. She is required to return the title because Frank held voidable title, not void title. D. She is required to return the title under the UCC because she paid under $5,000 for it. E. Under the UCC, the car should be sold with ABC and Betty splitting the proceeds.

Q: Accidental Sale. ABC Motors ordinarily deals in used cars and also does some amount of repair work. Robby entrusted his automobile to ABC Motors to have the oil changed and get new brakes. The car was parked in the lot along with other cars, some of which were for sale. The manager of ABC Motors accidentally sold the car to Connie because she saw it and took it upon herself to offer a good price. The manager was attempting to increase the shop's profit margin. Connie had no idea that the car did not belong to ABC Motors. When Robby went to pick up the car, he was very upset that it was gone. The manager told Robby that he was very sorry, but that he was not negligent and only made an honest mistake. According to the manager, Robby accepted the risk of this type of loss; and his only recourse was against Connie. Which of the following is a proper identifying term for Connie? A. A good-faith purchaser B. A valid purchaser C. A void purchaser D. A voidable purchaser E. An interested purchaser for value

Q: Accidental Sale. ABC Motors ordinarily deals in used cars and also does some amount of repair work. Robby entrusted his automobile to ABC Motors to have the oil changed and get new brakes. The car was parked in the lot along with other cars, some of which were for sale. The manager of ABC Motors accidentally sold the car to Connie because she saw it and took it upon herself to offer a good price. The manager was attempting to increase the shop's profit margin. Connie had no idea that the car did not belong to ABC Motors. When Robby went to pick up the car, he was very upset that it was gone. The manager told Robby that he was very sorry, but that he was not negligent and only made an honest mistake. According to the manager, Robby accepted the risk of this type of loss; and his only recourse was against Connie. Which of the following is true regarding the manager's statement that Robby's only recourse is against Connie? A. The manager is correct. B. The manager is incorrect only if Robby has a writing signed by a representative of the repair shop guaranteeing the safety of the car. C. Because the sale to Connie was an accident, the manager is correct only if Connie can be found and served with process. D. The manager is correct only if Connie's deal was for less than 10% of the fair market value of the car. E. The manager is incorrect.

Q: Accidental Sale. ABC Motors ordinarily deals in used cars and also does some amount of repair work. Robby entrusted his automobile to ABC Motors to have the oil changed and get new brakes. The car was parked in the lot along with other cars, some of which were for sale. The manager of ABC Motors accidentally sold the car to Connie because she saw it and took it upon herself to offer a good price. The manager was attempting to increase the shop's profit margin. Connie had no idea that the car did not belong to ABC Motors. When Robby went to pick up the car, he was very upset that it was gone. The manager told Robby that he was very sorry, but that he was not negligent and only made an honest mistake. According to the manager, Robby accepted the risk of this type of loss; and his only recourse was against Connie. Which of the following is true regarding Connie's rights to the car? A. Connie can keep the car only if the repair shop voluntarily agrees to pay Robby the fair market value of the car. B. Connie can keep the car without paying any additional amounts only because she paid cash for it. C. Connie can keep the car without paying any additional amounts, and whether or not she paid cash makes no difference. D. Connie must give the car to Robby. E. Connie must return the car to the repair shop.

Q: 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; that even if it were stolen, ABC Motors acted in good faith with no knowledge of a theft; and that, therefore, no refund was legally required. ABC Motors had also sold a used car to Frank who wrote a bad check for the car and left town but not before he sold the car to Betty who paid a fair price for the car believing that Frank had all rights to sell it. ABC Motors asked Betty to return the car, but she told ABC to forget it. Assuming that the thief who stole the car sold and delivered it to ABC Motors without the knowledge of any representative of ABC Motors of the theft, what kind of title did ABC Motors have? A. Void B. Valid C. Voidable so long as ABC Motors can prove that it had never been charged with dealing in stolen merchandise D. Voidable so long as ABC Motors can prove that none of its representatives were negligent in disregarding evidence of the theft at any time prior to its resale to Marcy E. Voidable so long as no manager of ABC Motors had made an affirmative representation that the car was not stolen

Q: 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; that even if it were stolen, ABC Motors acted in good faith with no knowledge of a theft; and that, therefore, no refund was legally required. ABC Motors had also sold a used car to Frank who wrote a bad check for the car and left town but not before he sold the car to Betty who paid a fair price for the car believing that Frank had all rights to sell it. ABC Motors asked Betty to return the car, but she told ABC to forget it. Assuming that ABC Motors was an innocent purchaser from the thief, which of the following is true regarding the manager's statement that Marcy is not due a refund? A. The manager is correct only so long as ABC Motors can prove that it had never been charged with dealing in stolen merchandise. B. The manager is correct only so long as ABC Motors can prove that none of its representatives were negligent in disregarding evidence of the theft at any time prior to its resale to Marcy. C. The manager is correct. D. The manager is incorrect only if Marcy can prove that she specifically asked if there was any problem with the car prior to her purchase and was affirmatively told that the title was good. E. The manager is incorrect.

Q: 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; that even if it were stolen, ABC Motors acted in good faith with no knowledge of a theft; and that, therefore, no refund was legally required. ABC Motors had also sold a used car to Frank who wrote a bad check for the car and left town but not before he sold the car to Betty who paid $1,100, a fair price for the car, believing that Frank had all rights to sell it. ABC Motors asked Betty to return the car, but she told ABC to forget it. What kind of title did Frank have? A. Valid B. Void C. Voidable D. Absolute E. Illegal

Q: Carpet Woes. Beau went shopping at ABC Carpet. He saw some carpet he liked but could not make up his mind. The manager at ABC Carpet wrote down the proposed purchase price for him along with a statement that the price would be good for three months. Two months later Beau went back to ABC Carpet to purchase the carpet. Unfortunately, the price had gone up. Beau showed the manager his writing and guaranteed price, but the manager said that the offer was no longer good. Although he had to pay more than the ABC manager had initially promised, Beau proceeded to purchase his carpet from ABC Carpet, and he also contracted with ABC to do the installation. Unfortunately, Beau almost immediately started to have problems with the carpet. Beau told the sales manager of ABC Carpet that he was planning on bringing suit for breach of warranty. The sales manager, however, told him that the breach of warranty provisions only applied to sales of goods and that the carpet purchase was for installation, a service. Which of the following is true regarding whether the UCC applies to the contract Beau had with ABC Carpet? A. Common law will be applied, not the UCC, because the contract was mixed. B. The UCC will be applied, not common law because the contract was mixed. C. The court will determine whether the predominant purpose of the contract was the sale of goods in which case the UCC would apply. D. The court will apply the service-warranty test to determine whether the predominant purpose of the contract was the provision of a service in which case the UCC would apply. E. The court will apply the service-warranty test to determine whether the predominant purpose of the contract was the sale of goods in which case the UCC would apply.

Q: Carpet Woes. Beau went shopping at ABC Carpet. He saw some carpet he liked but could not make up his mind. The manager at ABC Carpet wrote down the proposed purchase price for him along with a statement that the price would be good for three months. Two months later Beau went back to ABC Carpet to purchase the carpet. Unfortunately, the price had gone up. Beau showed the manager his writing and guaranteed price, but the manager said that the offer was no longer good. Although he had to pay more than the ABC manager had initially promised, Beau proceeded to purchase his carpet from ABC Carpet, and he also contracted with ABC to do the installation. Unfortunately, Beau almost immediately started to have problems with the carpet. Beau told the sales manager of ABC Carpet that he was planning on bringing suit for breach of warranty. The sales manager, however, told him that the breach of warranty provisions only applied to sales of goods and that the carpet purchase was for installation, a service. What kind of offer did the manager at ABC Carpet make to Beau? A. An unenforceable offer B. A firm offer C. A consideration offer D. An illusory offer E. A mirror offer

Q: Carpet Woes. Beau went shopping at ABC Carpet. He saw some carpet he liked but could not make up his mind. The manager at ABC Carpet wrote down the proposed purchase price for him along with a statement that the price would be good for three months. Two months later Beau went back to ABC Carpet to purchase the carpet. Unfortunately, the price had gone up. Beau showed the manager his writing and guaranteed price, but the manager said that the offer was no longer good. Although he had to pay more than the ABC manager had initially promised, Beau proceeded to purchase his carpet from ABC Carpet, and he also contracted with ABC to do the installation. Unfortunately, Beau almost immediately started to have problems with the carpet. Beau told the sales manager of ABC Carpet that he was planning on bringing suit for breach of warranty. The sales manager, however, told him that the breach of warranty provisions only applied to sales of goods and that the carpet purchase was for installation, a service. Which of the following is true regarding the enforceability of the offer made by the manager at ABC Carpet? A. ABC Carpet is not bound by the offer because Beau did not provide any consideration. B. ABC Carpet is bound by the offer, but only for a period of seven days. C. ABC Carpet is bound by the offer, but only for a period of ten days. D. ABC Carpet is not bound by the offer both because Beau did not provide any consideration and also because such an offer is only good for a period of ten days. E. ABC Carpet was bound by the offer and Beau had the right to sue for the refusal to honor the agreement.

Q: Which of the following are types of conditional sales contract? A. Sale-on-approval contracts B. Sale-or-return contracts C. Condition-on-sale contracts D. Sale-on-approval contracts, sale-or-return contracts, and condition-on-sale contracts E. Sale-on-approval contracts and sale-or-return contracts, but not condition-on-sale contracts

Q: In a conditional sales contract, a contract is a _____ if the seller allows the buyer to take possession of the goods before deciding whether to complete the contract by making the purchase. A. sale-on-approval contract B. sale-or-return contract C. condition-or-sale contract D. return-or-purchase E. return-or-sale

Q: In a conditional sales contract, a _____ occurs when the seller and buyer agree that the buyer may return the goods at a later time. A. sale-on-approval contract B. sale-or-return contract C. condition-or-sale contract D. return-or-purchase E. return-or-sale

Q: What may a buyer do if a seller does not provide goods that were described in the contract? A. Accept the nonconforming goods as is B. Reject the goods subject to the seller's curing the deficiency in the goods C. Reject the goods if no cure is possible D. Accept the nonconforming goods as is, reject the goods subject to the seller's curing the deficiency in the goods, or reject the goods if no cure is possible E. Nothing for at least 30 days

Q: What do the words "deliver to the order of seller" indicate in a goods-in-bailment contract? A. A negotiable document B. A nonnegotiable document C. A shipment contract D. An origin contract E. An execution contract

Q: A goods-in-bailment contract that lacks the words "to the order of" indicates a(n) _____ document. A. negotiable B. nonnegotiable C. shipment contract D. origin contract E. sale-or-return contract

Q: In a goods-in-bailment contract, when is an insurable interest created? A. When either party has title to the goods B. When either party has title or a risk of loss C. When either party has title, risk of loss, or other economic interest attached to the goods D. Two days after either party has title to the goods E. Never, there is no such thing as a goods-in-bailment contract

Q: Which of the following occurs in a CIF agreement? A. Risk of loss occurs when goods are identified to the contract. B. Risk of loss occurs when the goods are delivered to the buyer. C. Risk of loss remains with the seller for 5 days after the sale. D. Risk of loss remains with the seller for 5 days before the sale. E. The seller puts the goods in possession of a carrier before the risk passes to the buyer.

Q: What type of contract references goods that are in some kind of storage so the seller cannot transfer physical possession of them? A. Goods-in-transit B. Goods-in-bailment C. General to contract D. Stored pending payment E. Stored-in-transit

Q: Which of the following does a seller have in order to indicate ownership of goods when goods are in some kind of storage so the seller cannot transfer physical possession of them? A. A negotiable document of title. B. A nonnegotiable document of title. C. A contract or other instrument showing ownership that is not a negotiable or nonnegotiable document of title. D. Either a negotiable document of title, a nonnegotiable document of title, or a contract or other instrument showing ownership that is not a negotiable or nonnegotiable document of title. E. A negotiable document or a nonnegotiable document of title only.

Q: Which of the following is true regarding transportation costs when the designation FOB is used? A. The selling price includes transportation costs. B. The selling price does not include transportation costs. C. Both the buyer and seller bear transportation costs with the costs apportioned at a rate of 50% to the buyer and 50% to the seller. D. Both the buyer and seller bear transportation costs with the loss being proportioned 75% to the buyer and 25% to the seller. E. Both the buyer and seller bear transportation costs with the loss being proportioned 25% to the buyer and 75% to the seller.

Q: What does the term "FAS" when used as a shipping term represent? A. Fee at ship B. Fee along shore C. Freedom alongside D. Free alongside E. Free of basis

Q: Which of the following is true when the designation FAS is used? A. The buyer, at the buyer's expense, delivers the goods alongside the ship before the risk passes to the buyer. B. The buyer, at the seller's expense, delivers the goods alongside the ship before the risk passes to the buyer. C. The seller, at the seller's expense, delivers the goods alongside the ship before the risk passes to the buyer. D. The seller, at the buyer's expense, delivers the goods alongside the ship before the risk passes to the buyer. E. The common carrier, at the carrier's expense, delivers the goods alongside the ship before the risk passes to the buyer.

Q: What does CIF stand for when used as a shipping term represent? A. Cost, insurance, and freight B. Collateral, insurance, and freight C. Commerce, insurance, and freight D. Cost, indemnity, and freight E. Cost, insurance, and flight

Q: In an origin contract who bears the risk of loss while the goods are in transit? A. The seller B. The buyer C. Both the buyer and seller with the loss being proportioned 50% to the buyer and 50% to the seller D. Both the buyer and seller with the loss being proportioned 75% to the buyer and 25% to the seller E. Both the buyer and seller with the loss being proportioned 25% to the buyer and 75% to the seller

Q: In a destination contract who bears the risk of loss while the goods are in transit? A. The seller B. The buyer C. Both the buyer and seller with the loss being proportioned 50% to the buyer and 50% to the seller D. Both the buyer and seller with the loss being proportioned 75% to the buyer and 25% to the seller E. Both the buyer and seller with the loss being proportioned 25% to the buyer and 75% to the seller

Q: What does "FOB" stand for when used as a shipping term represent? A. Fee on board B. Fee on basis C. Freedom of board D. Free on board E. Free of basis

Q: Which of the following are types of common-carrier delivery contracts? A. Origin, and transfer contracts B. Destination and transfer contracts C. Transfer and simple delivery contracts D. Origin, destination, and transfer contracts E. Origin and destination contracts

Q: Which of the following requires that the seller make proper shipping arrangements and deliver goods to the buyer via a common carrier but not require a guarantee of the safety of goods to their destination? A. Origin contracts B. Destination contracts C. Transfer contracts D. Origin contracts, destination contracts, and transfer contracts E. Shipment and destination contracts, but not transfer contracts

Q: In an origin contract, when does title pass to the buyer? A. When money is transferred to the seller B. When the items are delivered to the buyer C. At the time and place of shipment D. One day after goods are identified to the contract E. When goods are identified to the contract

Q: When is an insurable interest in the buyer created in a simple delivery contract? A. When money is transferred B. When the items are delivered C. When the buyer takes possession D. When the goods are identified to the contract E. When the goods are tendered for delivery

Q: With a simple delivery contract in which the seller is a merchant, which party sustains a loss if, through no fault of either party, the goods are destroyed through fire prior to delivery? A. The seller B. The buyer C. Both the buyer and seller with the loss being proportioned 50% to the buyer and 50% to the seller D. Both the buyer and seller with the loss being proportioned 75% to the buyer and 25% to the seller E. Both the buyer and seller with the loss being proportioned 25% to the buyer and 75% to the seller