Risk of Loss With Sales of Goods

Question 1

What happens if the buyer or seller is negligent?

Answer 1

That party must bear the loss

Question 2

What does UCC 2-509 address?

Answer 2

Risk of Loss in the Absence of Breach

Question 3

What does FOB Seller’s Place indicate in a shipment contract?

Answer 3

Buyer is responsible once the goods are delivered to the carrier

Question 4

What are the seller’s responsibilities under FOB Seller’s Place?

Answer 4

A) “Put goods in possession of the carrier”
B) “Make a reasonable contract for their transportation”
C) “Deliver any document necessary to the Buyer to take delivery”
D) “Promptly notify Buyer of shipment”

Question 5

Who is responsible for the cost of freight under FOB Seller’s Place?

Answer 5

Buyer

Question 6

What does FOB Buyer’s Place indicate in a destination contract?

Answer 6

Buyer is responsible once the goods are tendered at the stated destination

Question 7

What are the seller’s responsibilities under FOB Buyer’s Place?

Answer 7

A) “Put and hold the goods until Buyer takes possession”
B) “Tender must be at a reasonable hour”
C) “Notice of the tender to Buyer”
D) “Give Buyer documents needed for the delivery”]

Question 8

Who is responsible for the cost of freight under FOB Buyer’s Place?

Answer 8

Seller

Question 9

What does the UCC Gap Filler state if there is no term for FOB?

Answer 9

It shall be a shipment contract (FOB Seller’s Place)

Question 10

Under UCC 2-510(1), what happens if a tender or delivery of goods fails to conform to the contract?

Answer 10

The risk of their loss remains on the seller until cure or acceptance

Question 11

What is an example of when the seller maintains risk of loss? (FOB Seller)

Answer 11

If the lost goods in transport were non-conforming

Question 12

According to UCC 2-510(2), who bears the risk if a delivery is rejected?

Answer 12

[“Buyer bears the risk if they had insurance for the loss”

“Seller bears the risk if the Buyer is uninsured”]

Question 13

What happens if the Buyer repudiates concerning conforming goods already identified to the contract?

Answer 13

Risk of loss will be on the buyer for a commercially reasonable time

Question 14

What is a Third-Party Bailee?

Answer 14

Buyer receives a negotiable document of title covering the goods

Question 15

What must a Bailee acknowledge to the Buyer?

Answer 15

Buyer’s right to possession of the goods