Honoria Agreed to Sell a Shipment of Widgets to Klaus

question 8

Multiple Choice

Honoria agreed to sell a shipment of widgets to Klaus on credit. Following the terms of the contract, Honoria delivered the widgets to an independent carrier and instructed the carrier to deliver the shipment to Klaus's warehouse. Which of the following statements is TRUE?

• A) If Honoria becomes insolvent while the goods are being shipped by the carrier, Klaus should exercise a lien over the widgets.
• B) If Klaus becomes bankrupt, Honoria should rely entirely on an action for the price.
• C) Honoria can exercise the right of repossession against the independent carrier if she hears a rumor that the carrier may be insolvent.
• D) Honoria still has the authority and the ability to exercise a lien in order to retain possession of the shipment until Klaus pays the full purchase price.
• E) If Klaus becomes bankrupt while the carrier still has possession of the shipment, Honoria should exercise the right of stoppage in transit.

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