MrsSmith Is Moving Out of Her Personal Residence to a Smaller

question 39

Multiple Choice

Mrs.Smith is moving out of her personal residence to a smaller apartment.Because of this,she wishes to sell her piano.George inspects her piano and decides to buy it.Mrs.Smith receives her money and tells George he can take the piano right now.George says he needs to borrow his friend's truck before he can remove the piano.That night,the piano is destroyed by fire.George sues to recover his money.Which best describes this situation?

• A) Mrs. Smith wins; the risk of loss passed to George as soon as the contract was made.
• B) Mrs. Smith wins; the risk of loss passed to George when Mrs. Smith said he could take the piano.
• C) George wins; the risk of loss does not pass until George takes delivery of the piano.
• D) George wins; the risk of loss does not pass until George receives a negotiable warehouse receipt.
• E) George wins; the risk of loss stays on Mrs. Smith because the goods were not conforming.

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Definitions:

Insufficient Funds

A situation where an account does not have enough money available to cover transactions.

Stop-Payment Order

An instruction given to a bank to not honor a check or payment that has been issued, but not yet cashed or withdrawn.

Terrace Garden

A garden or series of green spaces created on terraces that are either stepped naturally or constructed on slopes, often found in urban or hilly areas.

Postdated Check

A check written with a future date, which cannot be cashed or deposited until that date.