[Kool Klothes] Cleo Recently Opened an Exclusive Designer Clothing Store

question 20

Multiple Choice

[Kool Klothes] Cleo recently opened an exclusive designer clothing store. She contracts with Kool Klothes to sell their high-end designer line. The contract states Kool will ship clothes each week, and Cleo has a month to pay for the clothes or she can return any merchandise she does not sell. The arrangement works well for several months, but then Kool Klothes notices several suits Cleo returns via a courier service are damaged. Also, during a weekly delivery of the Kool Klothes truck, the driver gets into a car accident, and several formal ball gowns are damaged.
-With regard to the damaged suits, who bears the risk of loss?

• A) Kool Klothes, because Cleo is sending the goods back to the seller and had not purchased them.
• B) Kool Klothes, because under a sale-or-return contract, title to the suits never passed to Cleo.
• C) Cleo, because she is the buyer in a sale-or-return contract and only if there is no agreement to the contrary.
• D) Cleo, because the dresses are goods in bailment.
• E) Cleo, because under a sale-or-return contract, she can return the dresses.

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Definitions:

Mature Market

A market that has reached a state of equilibrium or saturation, characterized by slow growth and steady demand.

High-Context

Communication style in which most of the information is inferred from the context rather than explicitly stated in the verbal message.

Spoken Word

A literary form that is meant to be performed and heard, often focused on the aesthetics of word play, intonation, and voice inflection.

Regional Associations

involve the connection and correlation of certain characteristics, practices, or phenomena with specific geographical areas.