978-0538496902 Chapter 14 Part 1

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STUDENT _______________________________________ CLASS _______________________ DATE _________

ȱLESSONȱ14—1ȱQUIZȱ

LegalȱConceptsȱ

Directions:ȱFillȱinȱtheȱblank(s)ȱwithȱtheȱmostȱappropriateȱtermȱorȱphraseȱtoȱcompleteȱ

theȱsentence.ȱ

ȱȱ Answersȱ

ȱȱ1.ȱȱ Aȱpersonȱwhoȱbuysȱstolenȱgoodsȱfromȱaȱthiefȱ

receivesȱpossessionȱbutȱnotȱȱȱȱȱȱȱȱȱ?ȱȱȱȱȱȱȱȱȱtoȱtheȱ

goods.ȱ

1.ȱ______________________ȱ

ȱȱ2.ȱA(n)ȱȱpartyȱwhoȱbuysȱwithoutȱnoticeȱthatȱ

wouldȱputȱanȱordinaryȱpurchaserȱonȱguardȱasȱ

toȱtheȱlegitimacyȱofȱvariousȱaspectsȱofȱtheȱsaleȱ

isȱcalledȱa(n)ȱȱȱȱȱȱȱȱ?ȱȱȱȱȱȱȱȱ.ȱ

ȱ2.ȱ______________________ȱ

ȱȱ3.ȱȱ Onlyȱtheȱȱȱȱȱȱȱȱȱ?ȱȱȱȱȱȱȱȱȱownerȱofȱgoodsȱmayȱleȬ

gallyȱtransferȱownershipȱofȱthoseȱgoods.ȱ

3._______________________ȱ

ȱȱ4.ȱPhysicallyȱȱȱȱȱȱȱȱȱ?ȱȱȱȱȱȱȱȱȱareȱownedȱbyȱtheȱseller.ȱ4._______________________ȱ

ȱȱ5.ȱIfȱanȱownerȱofȱgoodsȱisȱinducedȱbyȱfraudȱtoȱsellȱ

goods,ȱtheȱbuyerȱobtainsȱa(n)ȱȱȱȱȱȱȱȱȱ?ȱȱȱȱȱȱȱȱȱtitle.ȱ

5._______________________ȱ

ȱȱ6.ȱ ȱ ȱȱȱȱȱȱȱȱ?ȱȱȱȱȱȱȱȱȱgoodsȱhaveȱbeenȱspecificallyȱdesigȬ

natedȱasȱtheȱsubjectȱmatterȱofȱaȱparticularȱsalesȱ

contract.ȱ

6._______________________ȱ

ȱȱ7.ȱAnyȱunitȱofȱaȱȱȱȱȱȱȱȱȱȱ?ȱȱȱȱȱȱȱȱȱgoodȱis,ȱbyȱnatureȱorȱ

tradeȱusage,ȱtheȱequivalentȱofȱanyȱotherȱlikeȱ

unit.ȱ

7._______________________ȱ

ȱȱ8.ȱ ȱȱȱȱȱȱȱȱ?ȱȱȱȱȱȱȱȱȱmeansȱthatȱtheȱsellerȱplacesȱtheȱ

properȱgoodsȱatȱtheȱbuyer’sȱdisposalȱandȱnotiȬ

fiesȱtheȱbuyerȱsoȱthatȱdeliveryȱcanȱbeȱreceived.ȱ

8._______________________ȱ

ȱȱ9.ȱA(n)ȱȱȱȱȱȱȱȱȱ?ȱȱȱȱȱȱȱȱȱisȱaȱpersonȱwhoȱisȱdeemedȱtoȱ

haveȱtitleȱtoȱtheȱgoods.ȱ

9._______________________ȱ

10.ȱ ȱȱȱȱȱȱȱȱ?ȱȱȱȱȱȱȱȱȱgoodsȱareȱneitherȱexistingȱnorȱidenȬ

tified.ȱ

10.______________________ȱ

LegalȱApplicationȱ

11.ȱTheȱShiversȱboughtȱ35ȱbundlesȱofȱShastaȱwhiteȱshinglesȱfromȱFourȱStarȱLumberȱ

Companyȱonȱcredit.ȱFourȱStarȱwasȱtoȱretainȱpossessionȱofȱtheȱshinglesȱuntilȱtheȱ

pectedȱtoȱarriveȱtheȱnextȱday.ȱIfȱtheȱShiversȱpayȱforȱtheȱshinglesȱbeforeȱtheȱnewȱ

shipmentȱarrives,ȱwhatȱlegalȱactionȱcouldȱtheyȱtakeȱagainstȱFourȱStar?ȱExplainȱ

12.ȱPerezȱmadeȱdollsȱinȱhisȱhomeȱfromȱAprilȱuntilȱAugust,ȱandȱthenȱsoldȱthemȱinȱhisȱ

friend’sȱshopȱfromȱSeptemberȱuntilȱChristmas.ȱInȱMarch,ȱAdelphiaȱcontactedȱ

theȱstoreȱwasȱfloodedȱbyȱunexpectedȱheavyȱrainfall.ȱWhatȱlegalȱactionȱcanȱAdelȬ

phiaȱtakeȱagainstȱPerez,ȱifȱany?ȱExplainȱyourȱanswer.ȱ

3-18 Chapter 14 Ownership and Risk of Loss in Sales

STUDENT _______________________________________ CLASS _______________________ DATE _________

ȱLESSONȱ14—1ȱPRACTICEȱACTIVITYȱ

Readȱtheȱfollowingȱcasesȱandȱanswerȱtheȱquestionsȱaboutȱthem.ȱAttachȱaȱpageȱifȱadditionalȱ

spaceȱisȱneededȱforȱanswers.ȱ

1.ȱTheȱRussellsȱdoȱbusinessȱasȱaȱfullȬserviceȱboatȱdealership.ȱUnderȱtheȱtermsȱofȱ

theirȱinsurance,ȱtheȱRussellsȱwereȱnotȱcoveredȱforȱdamagesȱresultingȱfromȱwaȬ

boatȱafterȱreplacingȱtheȱmotor,ȱitȱhitȱaȱseawallȱandȱwasȱcompletelyȱdestroyed.ȱ

TheȱRussellsȱfiledȱforȱdamagesȱunderȱtheirȱpolicy.ȱTheȱinsuranceȱcompanyȱreȬ

fusedȱtoȱpayȱonȱtheȱgroundsȱthatȱtheȱRussellsȱstillȱownedȱtheȱboat.ȱDoȱthey?ȱExȬ

2.ȱMedicoȱLeasingȱCompanyȱgaveȱpossessionȱofȱanȱautomobile,ȱbutȱnotȱtheȱtitle,ȱtoȱ

Smith,ȱaȱusedȬcarȱdealer,ȱforȱhimȱtoȱshowȱtoȱprospectiveȱbuyers.ȱSmith,ȱrepreȬ

sentingȱhimselfȱasȱtheȱownerȱofȱtheȱcar,ȱsoldȱtheȱcarȱtoȱWesselȱBuickȱCompany,ȱ

carȱandȱheȱdidȱnotȱhaveȱtheȱtitle.ȱMedicoȱclaimsȱthatȱWesselȱwasȱnotȱaȱgoodȱfaithȱ

buyerȱbecauseȱtheyȱpurchasedȱtheȱcarȱwithoutȱtheȱtitleȱunderȱcircumstancesȱthatȱ

wouldȱhaveȱputȱaȱprudentȱpersonȱonȱnotice.ȱDoesȱMedicoȱgetȱtheȱcar?ȱExplain.ȱ

STUDENT _______________________________________ CLASS _______________________ DATE _________

ȱLESSONȱ14—1ȱRETEACHȱ

Directions:ȱWriteȱtheȱnumbersȱ1–20ȱonȱindexȱcardsȱinȱlargeȱprint.ȱOnȱtheȱotherȱsideȱ

ofȱtheȱcard,ȱwriteȱtheȱdefinitionȱorȱtermȱthatȱisȱshownȱbyȱeachȱnumberȱbelow.ȱTapeȱ

theȱcardsȱtoȱaȱchalkboardȱinȱtheȱpatternȱbelowȱwithȱtheȱnumbersȱfacingȱtheȱstudents.ȱ

Divideȱtheȱstudentsȱintoȱfourȱorȱfiveȱteams.ȱEachȱteamȱshouldȱchooseȱaȱcaptainȱtoȱ

answerȱforȱthem.ȱTheȱteamȱcaptainȱwillȱchooseȱanyȱtwoȱnumbers.ȱReadȱtheȱcontentsȱ

onȱtheȱbackȱofȱtheȱcardsȱoutȱloud.ȱIfȱtheȱtwoȱchosenȱcardsȱformȱaȱcorrectȱmatchȱofȱaȱ

termȱandȱitsȱdefinition,ȱtheyȱareȱremovedȱfromȱtheȱchalkboardȱandȱthatȱteamȱscoresȱ

aȱpoint.ȱIfȱtheȱcardsȱdoȱnotȱmakeȱaȱcorrectȱmatch,ȱtheȱnextȱteamȱmayȱtakeȱaȱturn.ȱ

Note:ȱDoȱnotȱallowȱstudentsȱanythingȱtoȱwriteȱwithȱduringȱtheȱgame.ȱ

Cardȱ1ȱ

Anyȱunitȱisȱtheȱ

equivalentȱofȱanyȱ

otherȱlikeȱunitȱ

Cardȱ2ȱ

Aȱpersonȱwhoȱ

buysȱstolenȱgoodsȱ

cannotȱreceiveȱthisȱ

Cardȱ3ȱ

Goodsȱthatȱhaveȱ

beenȱspecificallyȱ

designatedȱinȱaȱ

salesȱcontractȱ

Cardȱ4ȱ

holderȱ

Cardȱ5ȱ

Aȱkindȱofȱtitleȱ

receivedȱbyȱaȱ

buyerȱwhenȱtheȱ

sellerȱwasȱ

defraudedȱ

Cardȱ6ȱ

Anȱinnocentȱthirdȱȱ

partyȱwhoȱboughtȱ

goodsȱthatȱwereȱ

originallyȱsoldȱ

throughȱfraudȱ

Cardȱ7ȱ

Goodsȱthatȱexistȱ

butȱareȱnotȱ

assembledȱorȱ

readyȱtoȱbeȱ

deliveredȱ

Cardȱ8ȱ

voidableȱ

aȱtitleȱtoȱgoodsȱ

Chapter 14 Ownership and Risk of Loss in Sales 3-19

3-20 Chapter 14 Ownership and Risk of Loss in Sales

STUDENT _______________________________________ CLASS _______________________ DATE _________

ȱLESSONȱ14—1ȱENRICHMENTȱ

Inȱthisȱlesson,ȱyouȱlearnedȱthatȱitȱisȱimportantȱtoȱunderstandȱwhenȱownershipȱtransȬ

fersȱfromȱsellerȱtoȱbuyer.ȱDisputesȱmayȱariseȱoverȱwhoȱhasȱtitleȱtoȱgoodsȱatȱparticuȬ

larȱtimesȱbecauseȱcreditorsȱmayȱwantȱtoȱcollectȱmoneyȱdue.ȱOtherȱdisputesȱariseȱ

whenȱgoodsȱareȱdamaged,ȱstolen,ȱorȱdestroyedȱbeforeȱtheȱtransactionȱisȱcompleted.ȱ

Whoȱmustȱbearȱtheȱloss?ȱOrȱwhoȱshouldȱplanȱaheadȱbyȱpurchasingȱtheȱprotectionȱofȱ

casualtyȱinsurance?ȱTheȱtextȱlistedȱfourȱcommonȱsituationsȱinvolvingȱtransferȱofȱtiȬ

tle.ȱInterviewȱoneȱorȱmoreȱindividualsȱwhoȱcommonlyȱdealȱinȱtheȱtransferȱofȱgoods,ȱ

suchȱasȱaȱpurchasingȱagent.ȱFindȱanȱexampleȱofȱeachȱofȱtheȱsituationsȱandȱprovideȱ

detailsȱofȱtheȱownershipȱtransferȱinȱtheȱspacesȱgivenȱbelow.ȱ

1.ȱSellerȱdeliversȱgoodsȱtoȱtheirȱdestination.ȱ

3.ȱSellerȱdeliversȱdocumentȱofȱtitle.ȱ

STUDENT _______________________________________ CLASS _______________________ DATE _________

ȱLESSONȱ14—2ȱQUIZȱ

LegalȱConceptsȱ

Directions:ȱInȱtheȱAnswersȱcolumn,ȱwriteȱtheȱletterȱfromȱColumnȱ1ȱthatȱrepresentsȱ

theȱwordȱorȱphraseȱthatȱmatchesȱtheȱstatementȱinȱColumnȱ2.ȱ

Columnȱ1ȱȱColumnȱ2ȱ ȱȱȱȱȱȱȱȱȱAnswersȱ

ȱȱ ȱȱ

1.ȱȱȱ Aȱshipmentȱtermȱthatȱmeansȱtheȱsellerȱagreesȱtoȱȱ

deliverȱtheȱgoodsȱnoȱfartherȱthanȱtheȱspecifiedȱ

locationȱ

2.ȱȱȱAȱpersonȱwhoȱhasȱtemporaryȱpossessionȱofȱ

ȱȱ anotherȱperson’sȱgoodsȱ

3.ȱAȱpriceȱthatȱincludesȱtheȱcostȱofȱtheȱgoods,ȱȱ

plusȱtheȱcostsȱofȱadequateȱinsuranceȱandȱȱ

shipmentȱofȱtheȱgoodsȱ

4.ȱAȱsaleȱwhereȱbothȱpartiesȱagreeȱthatȱtheȱȱȱ

goodsȱwillȱbeȱpaidȱforȱatȱaȱlaterȱdateȱ

5.ȱAȱshippingȱtermȱthatȱmeansȱtheȱcarrierȱwillȱȱ

collectȱtheȱpriceȱandȱshippingȱchargesȱuponȱȱ

deliveryȱ

6.ȱAȱcompletedȱsaleȱinȱwhichȱtheȱbuyerȱhasȱanȱ

optionȱofȱreturningȱtheȱgoodsȱ

7.ȱAȱsaleȱwhereȱtheȱbuyerȱdoesȱnotȱassumeȱownerȬ

shipȱorȱriskȱofȱlossȱuntilȱtheyȱhaveȱȱ

approvedȱtheȱgoodsȱ

8.ȱAȱsaleȱwhereȱaȱfractionalȱinterestȱinȱaȱsingleȱȱ

goodȱorȱinȱaȱnumberȱofȱgoodsȱthatȱareȱtoȱȱ

remainȱtogetherȱisȱsoldȱȱ

9.ȱAȱsaleȱofȱallȱorȱaȱmajorȱpartȱofȱtheȱgoodsȱofȱ

aȱbusinessȱatȱoneȱtimeȱ

10.ȱAȱpublicȱsaleȱwhereȱgoodsȱareȱsoldȱtoȱtheȱȱ

highestȱbidderȱ

ȱȱ1.ȱ_____ȱ

ȱȱȱ

ȱȱ2.ȱ_____ȱ

ȱȱȱ

ȱȱ3.ȱ_____ȱ

ȱȱȱ

ȱȱ4.ȱ_____ȱ

ȱȱȱ

ȱȱ5.ȱ_____ȱ

ȱȱȱ

ȱȱ6.ȱ_____ȱ

ȱȱ

ȱȱȱ7.ȱ_____ȱ

ȱȱȱ

ȱȱ8.ȱ_____ȱ

ȱȱȱ

ȱȱ9.ȱ_____ȱ

10.ȱ_____ȱ

A.ȱcreditȱsaleȱ

B.ȱsaleȱofȱanȱ

ȱundividedȱ

ȱinterestȱ

C.ȱFOBȱ

D.ȱauctionȱ

E.ȱbulkȱtransferȱ

F.ȱsaleȱorȱreturnȱ

G.ȱCIFȱ

H.ȱCODȱ

I.ȱsaleȱonȱȱ

ȱapprovalȱ

J.ȱbaileeȱ

LegalȱApplicationȱ

11.ȱAnȱautomobileȱmanufacturerȱinȱDetroitȱsoldȱaȱtruckloadȱofȱsportȱutilityȱvehiclesȱ

toȱaȱdealershipȱinȱPhiladelphia.ȱTheȱvehiclesȱwereȱshippedȱ“FOBȱPhiladelphia.”ȱ

WhenȱdidȱtheȱriskȱofȱlossȱtransferȱtoȱtheȱdealerȱinȱPhiladelphia?ȱExplainȱyourȱanȬ

swer.ȱ

Chapter 14 Ownership and Risk of Loss in Sales 3-21

3-22 Chapter 14 Ownership and Risk of Loss in Sales

STUDENT _______________________________________ CLASS _______________________ DATE _________

ȱLESSONȱ14—2ȱPRACTICEȱACTIVITYȱ

Readȱtheȱfollowingȱcaseȱandȱanswerȱtheȱquestionȱaboutȱit.ȱAttachȱaȱpageȱifȱadditionalȱspaceȱisȱ

neededȱforȱanswer.ȱ

1.ȱJason’sȱFoodsȱcontractedȱtoȱsellȱ38,000ȱpoundsȱofȱribsȱtoȱEckrichȱ&ȱSons.ȱTheȱribsȱ

wereȱhousedȱinȱaȱstorageȱwarehouse,ȱandȱtheȱsaleȱwasȱtoȱbeȱconsummatedȱbyȱaȱ

transferȱofȱtheȱribsȱfromȱJason’sȱFoodsȱaccountȱtoȱEckrich’sȱaccountȱbetweenȱ

receivedȱtheȱnoticeȱinȱtheȱmail.ȱInȱtheȱmeantime,ȱonȱJanuaryȱ18,ȱtheȱwarehouseȱ

caughtȱfireȱandȱtheȱribsȱwereȱdestroyed.ȱJason’sȱFoodsȱsuedȱEckrichȱforȱtheȱcostȱ

ofȱtheȱribs.ȱWillȱJasonȱwin?ȱExplain.ȱ[Jason’sȱFoods,ȱInc.ȱv.ȱPeterȱEckrichȱ&ȱSons,ȱ

STUDENT _______________________________________ CLASS _______________________ DATE _________

ȱLESSONȱ14—2ȱRETEACHȱ

Directions:ȱWriteȱtheȱcategoryȱnamesȱandȱtheȱavailableȱpointsȱinȱcolumnsȱonȱtheȱ

chalkboard.ȱReadȱtheȱclueȱasȱitsȱrespectiveȱcategoryȱandȱpointȱvalueȱisȱchosen.ȱEraseȱ

eachȱpointȱvalueȱasȱitȱisȱansweredȱcorrectly.ȱStudentsȱshouldȱanswerȱinȱtheȱformȱofȱaȱ

question.ȱForȱexample,ȱtheȱcorrectȱresponseȱtoȱtheȱfirstȱcategoryȱatȱ300ȱwouldȱbeȱ

“Whatȱisȱaȱbailee?”ȱWhenȱaȱstudentȱanswersȱcorrectly,ȱgiveȱthemȱcreditȱforȱtheȱ

pointsȱandȱletȱthemȱchooseȱtheȱnextȱclue.ȱIfȱaȱstudentȱanswersȱincorrectly,ȱsubtractȱ

theȱpointsȱfromȱtheirȱscoreȱandȱletȱanotherȱstudentȱchooseȱtheȱnextȱclue.ȱ

ShippingȱTermsȱTypesȱofȱSalesȱMiscellaneousȱ

100ȱ100ȱ100ȱ

600ȱ600ȱ600ȱ

Cluesȱtoȱbeȱreadȱtoȱstudents:ȱ

ShippingȱTermsȱ

100—FOBȱisȱanȱabbreviationȱforȱtheseȱwordsȱ(freeȱonȱboard)ȱ

600—Aȱpublicȱwarehouseȱisȱanȱexampleȱofȱthisȱ(bailee)ȱ

TypesȱofȱSalesȱ

100—Aȱtypeȱofȱsaleȱwhereȱtheȱbuyerȱpaysȱcashȱandȱtakesȱimmediateȱdeliveryȱ(cashȱandȱcarȬ

ry)ȱ

Miscellaneousȱ

100—CODȱisȱanȱabbreviationȱforȱtheseȱwordsȱ(collectȱonȱdelivery)ȱ

200—Aȱpublicȱsaleȱtoȱtheȱhighestȱbidderȱ(auction)ȱ

Chapter 14 Ownership and Risk of Loss in Sales 3-23

3-24 Chapter 14 Ownership and Risk of Loss in Sales

STUDENT _______________________________________ CLASS _______________________ DATE _________

ȱLESSONȱ14—2ȱENRICHMENTȱ

Thisȱlessonȱwentȱintoȱgreatȱdetailȱconcerningȱtransferȱofȱownershipȱandȱriskȱofȱlossȱ

inȱspecificȱtransactions.ȱTheȱtextȱlistedȱeightȱtransactionsȱthatȱmeritȱspecialȱattentionȱ

becauseȱofȱtheȱfrequencyȱwithȱwhichȱtheyȱoccurȱorȱbecauseȱofȱtheȱuniquenessȱofȱtheȱ

rulesȱthatȱapplyȱtoȱthem.ȱYouȱorȱyourȱfamilyȱmembersȱhaveȱlikelyȱexperiencedȱ

manyȱofȱtheseȱtransactions—buyingȱgroceriesȱwithȱcash,ȱpurchasingȱonȱcreditȱatȱaȱ

retailȱstore,ȱorȱorderingȱitemsȱonȱapprovalȱfromȱaȱmailȬorderȱbookȱorȱmusicȱclub.ȱByȱ

consideringȱyourȱownȱtransactionsȱandȱbyȱinterviewingȱfamilyȱandȱfriendsȱforȱexȬ

amplesȱofȱothers,ȱoutlineȱaȱspecificȱexampleȱofȱeachȱofȱtheȱtransactionsȱmentionedȱ

below.ȱ

2.ȱSalesȱonȱcreditȱ

3.ȱCODȱsalesȱ

4.ȱSaleȱorȱreturnȱ

5.ȱSaleȱonȱapprovalȱ

6.ȱSaleȱofȱanȱundividedȱinterestȱ

8.ȱBulkȱtransferȱ

STUDENT _______________________________________ CLASS _______________________ DATE _________

TESTȱ

CHAPTERȱ14

SECTION I—IDENTIFY LEGAL TERMS

Directions:ȱPlaceȱaȱTȱforȱTrueȱorȱanȱFȱforȱFalseȱinȱtheȱAnswersȱcolumnȱtoȱshowȱ

whetherȱeachȱofȱtheȱfollowingȱstatementsȱisȱtrueȱorȱfalse.ȱȱ ȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱAnswersȱ

ȱȱ1.ȱAnyȱperson,ȱinnocentȱorȱknowingly,ȱwhoȱbuysȱstolenȱgoodsȱfromȱaȱ

thief,ȱreceivesȱtitleȱasȱwellȱasȱpossession.ȱ

ȱȱ1.ȱ_____ȱ

ȱȱ2.ȱForȱownershipȱofȱgoodsȱtoȱbeȱtransferredȱinȱaȱsale,ȱtheȱgoodsȱmustȱ

beȱeitherȱexistingȱorȱidentified.ȱ

ȱȱ2.ȱ_____ȱ

ȱȱ3.ȱIdentifiedȱgoodsȱareȱallȱgoodsȱpertainingȱtoȱaȱtrademark.ȱȱȱ3.ȱ_____ȱ

ȱȱ4.ȱOwnershipȱofȱgoodsȱbringsȱwithȱitȱaȱbundleȱofȱrightsȱandȱbenefitsȱ

asȱwellȱasȱrelatedȱdutiesȱandȱburdens.ȱ

ȱȱ4.ȱ_____ȱ

ȱȱ5.ȱNeitherȱownershipȱnorȱriskȱofȱlossȱpassesȱatȱtheȱtimeȱofȱtheȱcontractȱ

forȱtheȱsaleȱofȱfutureȱgoods.ȱ

ȱȱ5.ȱ_____ȱ

ȱȱ6.ȱWhenȱaȱbulkȱtransferȱisȱmade,ȱtheȱUCCȱrequiresȱnoticeȱtoȱtheȱbuyȬ

er’sȱcreditors.ȱ

ȱȱ6.ȱ_____ȱ

ȱȱ7.ȱAnȱinnocentȱthirdȱpartyȱwhoȱinȱgoodȱfaithȱbuysȱsomeȱorȱallȱofȱtheȱ

goodsȱfromȱaȱbulkȱtransfereeȱcannotȱgetȱaȱgoodȱtitle.ȱ

ȱȱ7.ȱ_____ȱ

ȱȱ8.ȱAuctionȱsalesȱareȱ“withȱreserve”ȱunlessȱspecificallyȱannouncedȱinȱ

advanceȱtoȱbeȱ“withoutȱreserve.”ȱ

ȱȱ8.ȱ_____ȱ

ȱȱ9.ȱȱ Byȱnatureȱorȱtradeȱusage,ȱeachȱfungibleȱgoodsȱunitȱisȱregardedȱasȱ

equalȱtoȱeveryȱotherȱunit.ȱ

ȱȱ9.ȱȱ_____ȱ

10.ȱAȱfractionalȱinterestȱinȱaȱsingleȱgoodȱthatȱisȱtoȱremainȱtogetherȱisȱȱ

notȱaȱvalidȱsaleȱunderȱtheȱUCC.ȱ

10.ȱ_____ȱ

SECTION II—THINK CRITICALLY ABOUT LEGAL CONCEPTS

Directions:ȱInȱtheȱAnswersȱcolumnȱatȱtheȱrightȱofȱeachȱstatement,ȱwriteȱtheȱletterȱthatȱ

representsȱtheȱword,ȱorȱgroupȱofȱwords,ȱthatȱcorrectlyȱcompletesȱtheȱstatement.ȱ

ȱȱ Answersȱ

11.ȱGoodsȱspecificallyȱdesignatedȱasȱtheȱsubjectȱmatterȱofȱaȱparticuȬ

larȱsalesȱcontractȱcanȱbeȱidentifiedȱbyȱ(a)ȱtheȱbuyer,ȱ(b)ȱtheȱseller,ȱ

(c)ȱaȱmutuallyȱagreedȬuponȱthirdȱparty,ȱ(d)ȱanyȱofȱtheseȱ

11.______ȱ

Chapter 14 Ownership and Risk of Loss in Sales 3-25

12.ȱTransferȱofȱownershipȱofȱgoodsȱmayȱbeȱdoneȱbyȱtheȱownersȱandȱ

authorizedȱpersons,ȱorȱ(a)ȱbyȱmerchantsȱwithȱpossessionȱofȱsoldȱ

goods,ȱ(b)ȱbyȱholdersȱofȱnegotiableȱdocumentsȱofȱtitle,ȱ(c)ȱbyȱ

buyersȱinȱaȱsaleȱinducedȱbyȱfraud,ȱ(d)ȱallȱofȱtheseȱ

12.______ȱ

13.ȱAȱgoodȱfaithȱpurchaserȱisȱoneȱwhoȱ(a)ȱpurchasesȱmaterialsȱforȱ

religiousȱorganizations,ȱ(b)ȱchargesȱgoodsȱonȱtheȱfaithȱthatȱtheȱ

moneyȱwillȱbeȱprovided,ȱ(c)ȱhasȱinnocentlyȱgivenȱvalueȱandȱacȬ

quiredȱrightsȱtoȱgoodsȱwithȱaȱvoidableȱtitle,ȱ(d)ȱnoneȱofȱtheseȱ

13.______ȱ

14.ȱIfȱtheȱpartiesȱdoȱnotȱspecifyȱwhenȱtheȱtitleȱisȱtoȱpass,ȱtheȱcourtsȱ

willȱ(a)ȱdetermineȱifȱthereȱisȱanyȱapplicableȱcustomȱorȱusageȱinȱ

theȱparticularȱtradeȱthatȱcanȱsettleȱtheȱquestion,ȱ(b)ȱlookȱtoȱtheȱ

UCCȱforȱaȱsolution,ȱ(c)ȱbothȱaȱandȱb,ȱ(d)ȱnoneȱofȱtheseȱ

14.______ȱ

15.ȱȱ Futureȱgoodsȱareȱ(a)ȱnotȱbothȱexistingȱandȱidentified,ȱ(b)ȱwinȬ

dowȱdisplayȱitemsȱindicatingȱwhatȱisȱtoȱcome,ȱ(c)ȱjustȱideasȱthatȱ

haven’tȱbeenȱformulatedȱyet,ȱ(d)ȱnoneȱofȱtheseȱ

15.______ȱ

16.ȱIfȱtheȱsellerȱshipsȱgoodsȱbyȱcarrier,ȱtheȱtransferȱofȱtheȱriskȱofȱlossȱ

fromȱsellerȱtoȱbuyerȱoccursȱ(a)ȱimmediatelyȱwhenȱtheȱtitleȱtransȬ

fers,ȱ(b)ȱatȱtheȱdestinationȱuponȱtenderȱofȱdeliveryȱbyȱcarrier,ȱȱȱ

(c)ȱuponȱpayment,ȱ(d)ȱnoneȱofȱtheseȱ

16.______ȱ

17.ȱȱ WhichȱofȱtheȱfollowingȱtransactionsȱmeritȱspecialȱattentionȱbeȬ

causeȱofȱtheirȱfrequencyȱandȱuniqueȱrules?ȱ(a)ȱsalesȱonȱcreditȱ

andȱsalesȱonȱapproval,ȱ(b)ȱsalesȱofȱundividedȱinterest,ȱ(c)ȱcashȱ

andȱcarryȱsales,ȱ(d)ȱallȱofȱtheseȱ

17.______ȱ

18.ȱOnȱCODȱsales,ȱ(a)ȱtheȱbuyerȱhasȱcontrolȱofȱtheȱgoodsȱuponȱ

placementȱofȱtheȱorder,ȱ(b)ȱtheȱsellerȱretainsȱcontrolȱoverȱtheȱ

goodsȱuntilȱtheȱpriceȱisȱpaid,ȱ(c)ȱtheȱcarrierȱhasȱcontrolȱoverȱtheȱ

goodsȱuntilȱdelivery,ȱ(d)ȱnoneȱofȱtheseȱ

18.______ȱ

19.ȱIfȱaȱbuyerȱofȱaȱbulkȱtransferȱfailsȱtoȱnotifyȱtheȱseller’sȱcreditorsȱofȱ

theȱforthcomingȱtransfer,ȱtheȱcreditorsȱmayȱ(a)ȱmakeȱclaimsȱ

againstȱtheȱinventoryȱandȱequipmentȱafterȱtheȱbuyerȱtakesȱposȬ

session,ȱ(b)ȱmakeȱtheȱsaleȱnullȱandȱvoid,ȱ(c)ȱeitherȱaȱorȱb,ȱȱȱȱȱȱȱȱȱ(d)ȱ

noneȱofȱtheseȱ

19.______ȱ

SECTION III—APPLY LEGAL PRACTICES

20.ȱFranȱhadȱtheȱmotorȱinȱherȱcarȱreplacedȱatȱFred’sȱFixȬItȱAutoȱShop.ȱTwoȱweeksȱ

laterȱtheȱpoliceȱconfiscatedȱherȱcar,ȱasȱitȱcontainedȱaȱstolenȱmotor.ȱFranȱwasȱnotȱ

awareȱofȱtheȱcrime.ȱDoesȱsheȱhaveȱownership?ȱExplainȱyourȱanswer.ȱ

3-28 Chapter 14 Ownership and Risk of Loss in Sales

ANSWERS

Lessonȱ14—1ȱ

Quiz

12. AdelphiaȱwouldȱnotȱhaveȱaȱcauseȱofȱactionȱagainstȱPerezȱbecauseȱatȱtheȱtimeȱsheȱ

Practice Activity

1.ȱNo,ȱtheȱRussellsȱnoȱlongerȱownȱtheȱboat.ȱȱBecauseȱthereȱwasȱnoȱrequirementȱforȱ

documentsȱofȱtitleȱtoȱbeȱdeliveredȱunderȱtheȱcontract,ȱandȱdeliveryȱofȱtheȱboatȱ

2.ȱNo,ȱMedicoȱdoesn’tȱgetȱtheȱcar.ȱTheȱcourtȱruledȱthatȱunderȱtheȱUCC,ȱSmithȱwasȱ

aȱmerchantȱofȱusedȱcarsȱand,ȱasȱsuch,ȱhadȱapparentȱauthorityȱtoȱsellȱtheȱcar.ȱUnȬ

Reteach

Theȱcorrectȱwordȱmatchesȱareȱasȱfollows:ȱ