Asked by
Kylie Knori
on Dec 18, 2024
Verified
Toula is buying a delivery vehicle for her business and it will be available for her to pick up on Tuesday. On Monday, the day before her delivery truck is ready, Toula meets with her banker to complete the application for a small business loan. Can Toula use the delivery truck as collateral for the loan?
A) Yes, because the right to encumber goods has nothing to do with title.
B) No, because she does not yet have title to the delivery truck.
C) No, because having title does not mean that one can encumber the goods.
D) Yes, because she has a right to encumber the goods.
E) No, because risk of loss has not yet passed to her.
Encumber Goods
To place a burden or charge on goods, such as a lien or mortgage, that affects their use or transferability.
Title To Delivery
A legal concept indicating the transfer of ownership of goods from a seller to a buyer when specific conditions are met.
Small Business Loan
Financing specifically targeted to support the needs and growth of small and medium-sized enterprises, often provided with favorable terms.
- Gain insight into how ownership and the risk of loss transition in diverse sales contexts.
Verified Answer
CJ
Learning Objectives
- Gain insight into how ownership and the risk of loss transition in diverse sales contexts.