Seller received a letter from Buyer which stated, “Buyer hereby places an order with you for...

Seller received a letter from Buyer which stated, “Buyer hereby places an order with you for fifty cases of goods to be received at my factory in Detroit. Seller shipped the goods to Buyer by truck. While in route, the goods were stolen. When Buyer refused to pay, Seller sued for the purchase price. Buyer defended on the ground that neither title nor risk of loss passed until their delivery to Buyer. Who has the risk of loss? Explain. (In your answer use the terms: shipment contract, destination contract, common carrier)

Solutions

Expert Solution

The risk of loss lies with the seller. The reason being the letter from Buyers clearly states that the Buyer has ordered for fifty cases of goods to be delivered to their factory in Detroit. Thus, the freight is in the Seller's scope. Hence the insurance and the damage or loss of goods during transportation is the responsibility of the seller, and not the buyer. The contract made is destination contract in the above case.

keosha answered 2 years ago

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