Ch.22

Question 1

What is a title?

Answer 1

a legal concept describing rights related to the use of something.

Question 2

What rights does a title include?

Answer 2

• possession
• use
• enjoyment
• control

Question 3

What are the different types of title?

Answer 3

• good
• voidable
• void

Question 4

What are the characteristics of Good title?

Answer 4

All the rights (possession, use, enjoyment, control) to the exclusion of ALL others

Question 5

How is a good title acquired?

Answer 5

• from someone with a good title
• from someone with a voidable title if the third partner purchaser makes good faith purchases for value
• entrustment

Question 6

What is entrustment?

Answer 6

If owner with Good title entrusts possession of good(s) to a merchant
who deals in goods of that kind, merchant can transfer all rights in the goods to a buyer in the ordinary course of business

Question 7

What are the characteristics of Voidable Title?

Answer 7

All the rights (possession, use, enjoyment, control) to the exclusion of everyone EXCEPT the person from whom you received title

Question 8

What situation(s) result in purchaser acquiring Voidable title?

Answer 8

• voidable contracts
• failure to perform
• mutual agreement

Question 9

What qualifies a buyer’s contract to be voidable?

Answer 9

• is a minor
• has committed criminal fraud in securing goods
• has deceived seller regarding their identity

Question 10

What is an example of a failure to perform?

Answer 10

Buyer wrote a bad check

Question 10

What is a mutual agreement during a voidable contract?

Answer 10

Buyer and seller agreed title would not transfer until later time

Question 11

What are the characteristics of Void Title?

Answer 11

No rights (possession, use, enjoyment, control) to the good(s) whatsoever

Question 12

What situation(s) result in someone acquiring Void title?

Answer 12

• Acquiring goods through theft
• Acquiring goods from someone with Void title

Question 13

What are title issues?

Answer 13

• ownership
• encumbrance
• loss
• insurable interest

Question 14

What is encumbrance?

Answer 14

if the goods have been offered as securing debt/collateral

Question 15

At what point do I have the right to insure the goods against loss?

Answer 15

Insurable interest

Question 16

What are the types of contracts under UCC?

Answer 16

Simple delivery, Common-Carrier delivery, and Conditional Sales

Question 17

What are the characteristics of a Simple Delivery contract?

Answer 17

• Buyer and seller enter contract, buyer gets goods at time of sale or sometime
  later by seller’s delivery
• Title transfers to buyer when contract executed
• Buyer has insurable interest upon receiving title
• Risk of loss transfers to buyer when buyer takes possession

Question 18

What are the characteristics of Common-Carrier Delivery contracts?

Answer 18

Buyer and seller contract, seller then places goods with common carrier

Question 19

What are the types of Common Carrier delivery contracts?

Answer 19

Origin and Destination Contracts

Question 20

What are the characteristics of Origin Shipment Contracts?

Answer 20

Title transfers to buyer at time goods are placed with common carrier;
buyer bears risk of loss while goods in transit

Question 21

What are the characteristics of Destination Shipment Contracts?

Answer 21

Title transfers to buyer when received by buyer; Seller bears risk of loss until goods are received at destination

Question 22

What are the types of UCC Sales Contracts?

Answer 22

Conditional sales

Question 23

What are the types of Conditional Sales contracts?

Answer 23

Sale-on-approval and Sale-or-return.

Question 24

What are the characteristics of a Sale-on-Approval contract?

Answer 24

Title and risk of loss remain with seller until buyer notifies seller of approval

Question 25

What are the characteristics of a Sale-or-return contract?

Answer 25

Buyer has insurable interest once goods identified in contract; title and risk of loss transfer depend on whether delivered by common carrier or delivered by seller

Question 26

Under UCC, what are key to performance?

Answer 26

good faith and conforming goods

Question 27

What will happen if seller is in breach by failing to deliver conforming goods?

Answer 27

- buyer may reject or accept - Risk of loss remains with seller until buyer accepts goods or deficiencies corrected

Question 28

If buyer in breach from refusal to accept conforming goods and goods later lost or damaged, what happens to risk of loss?

Answer 28

Risk of loss depends on type of contract between buyer and seller