B-83
ALTERNATE CASE PROBLEM ANSWERS
CHAPTER 20
TITLE, RISK, AND INSURABLE INTEREST
20-1A. Risk of loss
(Chapter 20—Page 396)
The court relied on UCC 2–501(1), which states, “Where tender or delivery of goods so fails to conform
20-2A. Entrustment rule
(Chapter 20—Pages 387–389)
The trial court held that Bobby Locke could not recover from the Arabi Grain & Elevator Co., concluding
that Worthco Farm Center, Inc., had entrusted the corn to Hobby, as the manager, and that thus, Hobby
B-84 APPENDIX B: ALTERNATE CASE PROBLEM ANSWERS—CHAPTER 20
The court held that First Team “occup[ied] the status of a good faith buyer in the ordinary course of
business.” Thus, it was not required to return the tractor. The court pointed out that the “primary
rationale behind the entrusting provisions is aimed at protecting the buyer who purchases the entrusted
20-4A. Sales by nonowners
(Chapter 20—Pages 386–387)
No. A seller has voidable title to any goods obtained by fraud, paid for by a check that is later
dishonored, purchased on credit when the seller is insolvent, or purchased from a minor. A seller with
20-5A. Entrustment rule
(Chapter 20—Pages 387–389)
The court noted that UCC 2–403(2) provides that “any entrusting of possession of goods to a merchant
who deals in goods of that kind gives him power to transfer all rights of the entruster to a buyer in the
20-6A. Risk of loss
(Chapter 20—Pages 389, 390 & 392)
Pocasset has the risk of loss. Section 2–319 of the UCC, in defining the F.O.B. term, and case law
20-7A. Title
(Chapter 20—Page 386)
2–401(2)] provides that ‘unless otherwise explicitly agreed, title passes to the buyer at the time and
place at which the seller completes performance with reference to the physical delivery of the goods.’
20-8A. Risk of loss
(Chapter 20—Page 389)
The court ruled in favor of Olmstead. The court determined that the risk of loss passed to McKenzie by
B-86 APPENDIX B: ALTERNATE CASE PROBLEM ANSWERS—CHAPTER 20
that he bore the risk of loss unless the parties agreed otherwise. “[A] contrary agreement need not be
express or written and may be implied from the parties’ conduct or the circumstances of the case,” but
20-9A. Shipment and destination contracts
(Chapter 20—Page 385)
The Connecticut state court in which the action was brought held that Cardwell violated the statute.
The court ordered him to stop selling tickets in Connecticut for more than $3 over the fixed price of each
20-10A. Shipment and destination contracts
(Chapter 20—Page 386)
When delivery is to occur without moving goods, “if the goods are at the time of contracting already
identified and no documents are to be delivered, title passes at the time and place of contracting,”
