Question

let's assume that your contract with Whole Grains on May 1, 2016, says you will buy 500 pounds of flour and 300 pounds of sugar, but that you will arrange to have to products shipped from Whole Grain's production facility on May 30, 2016 to your kitchen. Whole Grains plans to have the products shipped from its mills to Whole Grains for packaging on May 15, 2016, and says packaging will be complete and your order will be filled by May 25, 2016.

Did title pass from Whole Grains to you on the date of the contract? Why/why not?

2. When does title pass from Whole Grains to you? Why?

Answer 1

1. The title did not pass from Whole Grains to me on the date of the contract. The sales contract made between me and Whole Grains on May 1, 2016 does not insist the seller to ship or deliver the goods and I need to pick up the goods from the production facility. The title passes to the buyer on such contracts depending on whether the document of title like bill of lading is required. The title passes to the buyer on the date of contract when no document of title is required if the goods are already been identified. Otherwise title does not pass till the identification of goods occurs. In this case, no document of title is required and the goods including flour and sugar are not identified or distinguished from other sugar and flour on the date the contract is made. Hence the title did not pass to me on the date of the contract.

2. The title passes from Whole Grains to me on May 15, 2016. The title passes in the absence of document of title when the identification of good occurs. Here the identification of goods including 500 pounds of flour and 300 pounds of sugar would occur on May15, 2016 when Whole Grains ships the product from its mill for packaging. Hence the title also passes to me on the same day.