CHAPTER 18—TRANSFER OF TITLE AND RISK IN SALES
CONTRACTS Key
1. Which of the following best describes the term “title”?
2. A document of title issued by a storage company for goods stored is known as a _____.
3. Which of the following is true of a shipment contract?
4. Which of the following is true of fungible goods?
5. A temporary transfer of possession of personal property without the intention of further sales is known as
a(n) _____.
6. Which of the following is true of a sale by entrustee?
7. Which of the following is an example of a consignment?
8. Documents that show ownership are called documents of _____.
9. The right of ownership of property or evidence of ownership is called title.
10. Creditors of the seller are not allowed to seize goods in the belief that the seller owns them.
11. In the event of goods damaged through no fault of either the buyer or the seller, the party with control over
the goods bears the risk of loss.
12. In the absence of an extension of credit, a seller has the right to keep the goods until the buyer pays for
13. When goods are sold at an auction in separate lots, each lot is considered a separate transaction.
14. A sale on approval is a completed sale with the right of the buyer to return the goods and thereby set aside
the sale.
15. In the absence of a contrary agreement, the buyer under a sale or return cannot return all of the goods or any
commercial unit thereof.
16. In a sale or return contract, the cost and risk of return is borne by the seller.
17. If the owner entrusts goods to a merchant who deals in goods of that kind, the merchant does not have the
power to transfer the entruster’s title to anyone who buys in the ordinary course of business.
18. Generally, people can sell only such interest or title in goods as they possess.
19. A consignment is the same as a sale with a right to return.
20. Explain documents of title.