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True or False:

1. Diane purchases a $1,200 television set from Best Buy, payingfor the set with a check that later bounces. Before Best Buyrealizes that Diane’s check is no good, Diane resells thetelevision set, in its unopened box, to Patty for $350. Patty hasno knowledge of Diane’s bad check. Using UCC Article 2 voidabletitle rules, Best Buy will be able to recover the television setfromPatty.          
2. One of the important distinctions between the UCC’s voidabletitle and void title rules is that the voidable title situationinvolves a voluntary transfer of the goods by the seller while thevoid title situation doesnot.                                  
3. Carla purchases goods from Karen making payment with a checkthat later bounces. Carla transfers the goods to Joe, a good faithpurchaser for value, before Karen discovers what has happened. Joe,in turn, sells the goods to Betty who knows all about the bouncedcheck involving Carla. Under the UCC’s umbrella, or shelter rule,Betty can take good title to the goods from Joe even though shecould not have taken good title had she purchased the goods fromCarla.                                                                                                                    
4. Sony has a warehouse filled with 5,000 Model 320X VCR’s. Searscontracts with Sony to purchase 3,000 of the VCR’s. In order toproperly identify the 3,000 units to be sold to Sears Sony mustphysically separate the units from the remaining 2,000units.                                                                                          
5. A buyer can have an insurable interest in goods even though thebuyer has neither possession nor title to the goods.
6. An insurable interest in goods can be held by either a buyer ora seller, but no both at the sametime.                                                                                          
7. For an “F.O.B. shipping point” contract, the risk of losspasses from the seller to the buyer when the goods reach thebuyer.                                                      
8. Under the residual risk of loss provisions of UCC Article 2, ifthe seller is a merchant, the risk of loss does not pass to thebuyer until the buyer takes physical possession of thegoods.                                                                        
9. A transaction involving goods is considered a sale on approvalif the goods are delivered primarily foruse.                                                                                  

10. If a buyer accepts goods, and then rightfully rejects thosegoods, the determination of who bears the risk of loss will dependupon whether or not the buyer has insurance coverage.