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

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Question 21

Multiple Choice

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

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 goods are identified to the buyer

F) B) and D)
G) A) and D)

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Question 22

True/False

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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 third-party tender delivery contract.

A) True
B) False

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Question 23

Multiple Choice

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With a(n) ________, title transfers to the buyer on the goods being identified to the contract.

The text discusses the case of Landshire Food Service, Inc. v. Coghill, where the defendant, Coghill, sold his Rolls Royce to Bellman who paid with a forged cashier's check. Meanwhile, Hyken, an innocent purchaser for value, purchased the car from Bellman before the fraud was discovered. What was the result of this case?

Cora, an artist, entrusts her paintings with Kasper, the owner of an art gallery. Kasper sells Cora's paintings to Gianni. What kind of title does Gianni have?

________ is title acquired from someone who already owns the goods free and clear.

Brenda conditions the buying of two masterpiece sculptures from Fredrick on an appraisal by a certified appraiser. This is known as a(n) ________.

Which of the following statements accurately describes conditional contracts?

[Used Car Problems] Jamila purchased a used car from Slick Sid's car dealership. Six months later the police seized the car from Jamila on the basis that it was a stolen vehicle. Jamila asked for her money back from Slick Sid's. The manager of Slick Sid's told her that the car was not stolen, but that even if it were, Slick Sid's acted in good faith with no knowledge of a theft; and that, therefore, Jamila, as a good-faith purchaser, had a good title. Slick Sid's had also sold a used car to Hiro who wrote a bad check for the car and left town, but not before selling the car to Doris. Doris purchased the car with no knowledge of any problem with the check. Slick Sid's asked Doris to return the car, but she refused. She explained that she had given the car to her son, Ricky. -If Jamila's car was stolen prior to delivery to Slick Sid's, and no one at the car dealership knew, what kind of title did Slick Sid's have?

Jonas sold his motorcycle to his co-worker's brother, Byron, who gave Jonas a check and took the motorcycle home. When Jonas goes to cash Byron's check he discovers the check is denied for insufficient funds. What recourse does Jonas have?

What happens when a buyer with a voidable title sells the goods to a third-party purchaser who makes a good-faith purchase for value?

[Accidental Sale] Julio entrusted his automobile to Slick Sid's for repair. The manager of Slick Sid's, who did a very poor job with inventory, accidentally sold the car to Ramona. Ramona, who paid cash for the car, had no idea that the car did not belong to Slick Sid's and paid fair market value for it. When Julio went to pick up the car, he was very upset that it was gone. The manager of Slick Sid's told him that he was very sorry, but that his only recourse would be against Ramona. -Is the manager correct in saying that Julio's only recourse is against Ramona?

[Used Car Problems] Jamila purchased a used car from Slick Sid's car dealership. Six months later the police seized the car from Jamila on the basis that it was a stolen vehicle. Jamila asked for her money back from Slick Sid's. The manager of Slick Sid's told her that the car was not stolen, but that even if it were, Slick Sid's acted in good faith with no knowledge of a theft; and that, therefore, Jamila, as a good-faith purchaser, had a good title. Slick Sid's had also sold a used car to Hiro who wrote a bad check for the car and left town, but not before selling the car to Doris. Doris purchased the car with no knowledge of any problem with the check. Slick Sid's asked Doris to return the car, but she refused. She explained that she had given the car to her son, Ricky. -What is the term for the kind of title Hiro had?

[Accidental Sale] Julio entrusted his automobile to Slick Sid's for repair. The manager of Slick Sid's, who did a very poor job with inventory, accidentally sold the car to Ramona. Ramona, who paid cash for the car, had no idea that the car did not belong to Slick Sid's and paid fair market value for it. When Julio went to pick up the car, he was very upset that it was gone. The manager of Slick Sid's told him that he was very sorry, but that his only recourse would be against Ramona. -Ramona's rights to the car are best summarized by which of the following statements?

The right to insure goods against any risk exposure such as damage or destruction is known as a bondable interest.

Title is the legal ownership of a good and does not require possession.

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

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

________ is the right to insure goods against any risk exposure such as damage or destruction.

What does the "I" mean in the shipping term CIF?