Assuming a Buyer That Is Insolvent Has Breached a Contract

question 40

Multiple Choice

Assuming a buyer that is insolvent has breached a contract by not paying for goods that are in transit,which of the following may occur?

• A) The carrier may stop delivery on the entire shipment.
• B) The carrier may stop delivery only if the quantity shipped is a large shipment such as a carload or truckload.
• C) The carrier may stop delivery only if a signed writing exists by which the buyer agreed to the remedy of stopping shipment.
• D) The carrier may stop delivery only if ordered to do so by the bankruptcy judge.
• E) The carrier may not stop delivery under any circumstances.

---

Definitions:

Publicly Traded

A designation for companies whose shares are bought and sold on the open market through a stock exchange, allowing for broad public investment.

Preferred Stock

A class of ownership in a corporation with a higher claim on assets and earnings than common stock, usually with dividend payments that are prioritized over common stock dividends.

Common Stock

Shares that represent ownership in a corporation, usually giving holders voting rights and a share in the company's profits.

Preferred Stock

A type of share in a corporation that gives the owner a greater entitlement to the firm's earnings and assets than holders of common stock.