Asked by gabriela huselton on Apr 27, 2024
Verified
Downtown Construction Co.obtained possession on April 1 of a bulldozer from Bulldozer Sales Co.to use in Downtown's business with a right to return the bulldozer no later than June 1 with no obligation other than to pay for the fuel the bulldozer used.Downtown is owned by Alice who allows her fifteen-year-old son,Bob,to operate the bulldozer on May 1 on a Downtown job.Bob is inexperienced and wrecks the bulldozer.Explain who has the risk of loss.
Risk of Loss
Refers to the chance or possibility that an asset or investment's value will decrease or be irrecoverably damaged or destroyed.
Bulldozer
A heavy and powerful tracked vehicle equipped with a substantial metal plate used to push large quantities of soil, sand, rubble, or other such material during construction or conversion work.
Inexperienced
Lacking experience or knowledge in a particular area or activity.
- Analyze risk of loss scenarios in various contract contexts.
Verified Answer
KF
Kathy FellowsApr 30, 2024
Final Answer :
This would qualify as a sale on approval,since the bulldozer was delivered for use.Ordinarily,risk of loss remains with the seller until the buyer has accepted the goods,but allowing an inexperienced fifteen-year-old to operate the bulldozer,coupled with the failure to inform the seller that the buyer intended to return the bulldozer could constitute an acceptance,placing the risk of loss on Downtown.
Learning Objectives
- Analyze risk of loss scenarios in various contract contexts.