COMMERCIAL PRACTICE - Introduction - RISK AND RETENTION OF TITLE Flashcards

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1
Q

What does title mean? (1)

A

Legal ownership.

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2
Q

What will a seller want in regards to risk? (2)

A

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.

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3
Q

What happens if the buyer has not yet paid but has taken delivery and the buyer goes into liquidation? (1)

A

The seller may not be able to claim the money back.

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4
Q

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)

A

The buyer may be entitled to the goods.

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5
Q

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)

A

The buyer will be owed the contract price as a creditor but may well never receive it back.

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6
Q

What does risk refer to? (1)

A

Who bears the responsibility if the goods are damaged or lost.

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7
Q

What is the default position in terms of risk? (1)

A

That risk passes to the buyer when title does and not on delivery / possession.

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8
Q

What is the importance of having insurance regarding risk? (2)

A

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.

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