Ch. 8: The Uniform Commercial Code

Question 1

attachment

Answer 1

time at which security interest become an inchoate right

Question 2

battle of the forms

Answer 2

difference in forms used by merchants for sales agreements

Question 3

CIF

Answer 3

cost of insurance and freight paid for my seller, even though risk of loss has passed to the buyer

Question 4

COD

Answer 4

cost on delivery; conditional contract in which the risk of loss passes to buyer only after goods have been delivered and paid for

Question 5

collateral

Answer 5

property pledged to secure a security interest

Question 6

consignment contract

Answer 6

conditional contract in which risk of loss remains with seller until buyer resells the goods

Question 7

cover

Answer 7

remedy whereby buyer can purchase goods in substitution for breached contract

Question 8

express warranty

Answer 8

guarantee created by words or conduct of the seller

Question 9

ex ship

Answer 9

destination contract in which risk of loss passes to buyer when goods are off-loaded from the mode of transportation

Question 10

FAS

Answer 10

free alongside; a shipping contract in which risk of loss passes to buyer when goods are placed alongside vessel used for transportation

Question 11

financing statement

Answer 11

document filed in government office to protect a security interest

Question 12

floating lien

Answer 12

security interest in after-acquired property

Question 13

FOB (carrier)

Answer 13

shipment contract in which risk of loss passes when goods are loaded onto third-party carrier

Question 14

FOB (place of shipment)

Answer 14

free on board; shipment contract in which risk of loss passes when goods are given to third-party carrier

Question 15

implied warranty

Answer 15

guarantee created by operation of law

Question 16

mechanic’s lien

Answer 16

security interest given under common law to persons who repair property

Question 17

merchant

Answer 17

person who regularly trades in goods or who holds himself out as having knowledge peculiar to a specific good

Question 18

no arrival, no sale

Answer 18

destination contract in which risk of loss passes to buyer when goods are tendered to the buyer

Question 19

perfect tender

Answer 19

buyer’s right to complete performance

Question 20

perfection

Answer 20

method of creating and protecting a security interest under Article IX of the UCC

Question 21

purchase money security interest

Answer 21

security interest created in the creditor whose money is used to buy the collateral

Question 22

replevin

Answer 22

equitable remedy in which buyer reclaims property previously rejected

Question 23

revocation

Answer 23

to recall an offer

Question 24

sale on approval

Answer 24

conditional contract in which risk of loss passes to buyer when buyer receives and approves goods

Question 25

sale or return

Answer 25

conditional contract in which risk of loss passes when buyer receives goods; buyer bears the cost of returning goods of which he does not approve

Question 26

secured transaction

Answer 26

any transaction regardless of form, that creates a security interest in personal property or fixtures

Question 27

security agreement

Answer 27

document signed by debtor and creditor that names the collateral and creates a security interest in said collateral

Question 28

security interest

Answer 28

right acquired by a creditor to attach collateral in case of default by the debtor

Question 29

shipment contract

Answer 29

agreement whereby risk passes from seller to buyer when goods are transported by a third person

Question 30

strict liability

Answer 30

no standard of care; automatic liability if properly used goods do not meet the warranty

Question 31

warranty

Answer 31

guarantee made by manufacturer or seller with respect to quality, quantity, and type of good being sold

Question 32

warranty of fitness for a particular use

Answer 32

guarantee that goods can be used for a specified purpose

Question 33

warranty of merchantability

Answer 33

guarantee that goods can be used in their current condition

Question 34

warranty of title

Answer 34

guarantee that seller has a title sufficient to transfer goods to buyer