COMMERCIAL PRACTICE - Introduction - RISK AND RETENTION OF TITLE Flashcards
What does title mean? (1)
Legal ownership.
What will a seller want in regards to risk? (2)
The seller loses control on delivery / possession passing to the buyer so will want the contract to provide the risk passes to the buyer on delivery.
What happens if the buyer has not yet paid but has taken delivery and the buyer goes into liquidation? (1)
The seller may not be able to claim the money back.
What happens if the buyer has paid the price and title has passed to the buyer but they have not yet taken delivery and the seller goes into liquidation? (1)
The buyer may be entitled to the goods.
What happens if the buyer has paid the price, title has not been passed and have not taken delivery of the goods and the seller goes into liquidation? (1)
The buyer will be owed the contract price as a creditor but may well never receive it back.
What does risk refer to? (1)
Who bears the responsibility if the goods are damaged or lost.
What is the default position in terms of risk? (1)
That risk passes to the buyer when title does and not on delivery / possession.
What is the importance of having insurance regarding risk? (2)
It will cover the risk of loss or damage to the goods and the question of when risk should pass often becomes a question of who should bear the cost of the insurance, usually expressly stipulated in the contract.
