WHEN DOES TITLE AND RISK PASS AND WHO HAS TITLE AND RISK AT THE END OF THE FACTS IN EACH OF THE...

WHEN DOES TITLE AND RISKPASS AND WHO HAS TITLE AND

RISK AT THE END OF THE FACTS IN EACH OF THE FOLLOWING QUESTIONS

FOUR QUESTIONS:1.WHEN DID/WOULD TITLE PASS2.WHEN DID/WOULD RISK PASS3.WHO HAS TITLE AT THE END4.WHO HAS RISK AT THE END

Seller Buyer

Lost in Transit

QUESTION 1—Seller in New York ships goods to Buyer in Miami, FOB New York, goods are lost in transit.

Seller Buyer

Lost in Transit

QUESTION 1—Seller in New York ships goods to Buyer in Miami, FOB New York, goods are lost in transit.

This is a shipment contract—FOB the place of shipment—2.319(1)(a)Title passes to buyer at the time and place of shipment—2-401(2)(a)Risk of loss passes to the Buyer when the goods are delivered to the carrier. 2-509(1)(a).At the end of the facts, Buyer has both the title and risk of loss

Seller Buyer

Lost in Transit

QUESTION 2—Seller in New York ships goods to Buyer in Miami, FOB Miami, goods are lost in transit.

Seller Buyer

Lost in Transit

QUESTION 2—Seller in New York ships goods to Buyer in Miami, FOB Miami, goods are lost in transit.

This is a destination contract—FOB the place of destination—2-319(1)(b)Title would pass to the Buyer on “Tender of Delivery” (2-503) at destination. 2-401(2)(b). This did not happen and title did not pass.Risk of loss would pass on Tender of Delivery at Destination. 2-509(1)(b) This did not happen and risk of loss did not pass.At the end of the facts, title and risk of loss remain in the Seller

Seller Buyer

Rightful Rejection

QUESTION 3—Same as Question 1 (a shipment contract) except the goods are delivered to the Buyer and are rejected because they do not conform to the contract.

Seller Buyer

Rightful Rejection

QUESTION 3—Same as Question 1 (a shipment contract) except the goods are delivered to the Buyer and are rejected because they do not conform to the contract.

Title passed to the Buyer at the time and place of shipment [2-401(2)(a)] and then revested in the Buyer when the goods were rightfully rejected. 2-401(4).Risk of loss never passes because the goods were non-conforming. 2-510(1)At the end of the facts, both the title and the risk of loss is in the Seller.

Note: While the goods are in transit, the title is in the Buyer and the risk is in the Seller

Question 5: Buyer buys a suit at Sears which is to be altered for him. Prior to picking it up, it is destroyed.

Question 5: Buyer buys a suit at Sears which is to be altered for him. Prior to picking it up, it is destroyed.

Title passes to the Buyer upon making the contract. 2-401(3)(b).Risk of loss would pass to the Buyer on his taking physical possession of the suit. 2-509(3). This did not happen so risk remained in the seller.At the end of the facts, title was in the Buyer and risk was in the seller.

Question 6: Buyer agrees to buy a brass bed from an individual who advertised the item in the newspaper. Buyer agrees to pick it up on Monday. The day before he is to pick it up, it is destroyed.

Question 6: Buyer agrees to buy a brass bed from an individual who advertised the item in the newspaper. Buyer agrees to pick it up on Monday. The day before he is to pick it up, it is destroyed.

Title would pass on making the contract. 2.401(3)(b).Risk of Loss would pass on tender of delivery. 2-509(3) The parties had agreed that tender of delivery would take place on Monday. Since the bed was destroyed before Monday, the risk did not pass.At the end of the facts, the Buyer has the title and the Seller has the risk.

Question 7: Buyer agrees to buy a brass bed from an individual who advertised the item in the newspaper. Buyer agrees to pick it up on Monday. Buyer fails to pick it up on Monday and it is destroyed Monday evening.

Question 7: Buyer agrees to buy a brass bed from an individual who advertised the item in the newspaper. Buyer agrees to pick it up on Monday. Buyer fails to pick it up on Monday and it is destroyed Monday evening.

Title is the same as Question 6. Risk of loss is the issue:If the bed was destroyed before the Buyer had time to pick it up given what theparties intended by “Monday”, then the risk is on the Buyer; otherwise, the risk remains on the Seller

Question 8: Buyer buys a washing machine at Sears which Sears has agreed to deliver. On the way to Buyer's house, the ears truck is involved in an accident which destroys the washer.

Question 8: Buyer buys a washing machine at Sears which Sears has agreed to deliver. On the way to Buyer's house, the ears truck is involved in an accident which destroys the washer.

Title would pass on the completion of Seller’s duties of delivery. 2-401(2)The risk of loss would pass on Buyer taking physical possession of the washing machine. 2-509(3). Neither of these happened so title and risk remain in the Seller.

Buys on 30 day approval

Question 10: Buyer buys a TV set for his home on a 30-day approval sale. The set is destroyed by a fire in Buyer's home which takes place on the 10th day he has had the set. (Buyer is not a fault regarding the fire)

DestroyedOn 10th day


Question 10: Buyer buys a TV set for his home on a 30-day approval sale. The set is destroyed by a fire in Buyer's home which takes place on the 10th day he has had the set. (Buyer is not a fault regarding the fire)


Since the television was delivered for use, this is a sale on approval. 2-326(1)(a).Title and risk would pass on approval or the use of the television in a mannerInconsistent with trial. 2-327(1) and (2). As this did not happen, title and risk remain in the Seller.


Question 12: Buyer buys a TV set for his home on a 30-day approval sale. The set is destroyed by a fire in Buyer's home which takes place on the 35th day he has had the set.



Question 12: Buyer buys a TV set for his home on a 30-day approval sale. The set is destroyed by a fire in Buyer's home which takes place on the 35th day he has had the set.


Since the Buyer kept the television over the trial period, title and risk passed tothe Buyer on the expiration of the trial period. 2-327(1) and (2).


Question 13: Buyer buys a TV set for his home on a 30-day approval sale. During the trial period, the Buyer sells the television to C.

Sells to CDuring the 30 day period


Question 13: Buyer buys a TV set for his home on a 30-day approval sale. During the trial period, the Buyer sells the television to C.

Sells to CDuring the 30 day period

The Buyer’s sale to ‘C” is a use inconsistent with trial, At the time of the sale, title and risk passed to the Buyer. We do not know whether title and risk wentto “C” because we do not know the nature of the sale to “C”. 2-327(1) and (2).

Question 11: Buyer, a music store, buys records from Seller on a twenty day approval basis. Before 20 days have passed, the records, which Buyer would usually sell under its store name, are destroyed.

Seller Buyer Fire

Question 11: Buyer, a music store, buys records from Seller on a twenty day approval basis. Before 20 days have passed, the records, which Buyer would usually sell under its store name, are destroyed.

Seller Buyer Fire

This is a sale or return because the records were delivered for resale—2.326(1)(b).Since there are no special rules regarding sale or returns, there is no way we can know when title and risk passed, but we do know who had title and risk when the records were destroyed. They must be in the Buyer because he had possession when the records were destroyed.

WHEN DOES TITLE AND RISK PASS AND WHO HAS TITLE AND RISK AT THE END OF THE FACTS IN EACH OF THE...

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