Asked by YUEYING HUANG on May 18, 2024
Verified
If the goods that are the subject of a sale are in the possession of a bailee and are to be delivered without being moved, when does the risk of loss pass to the buyer?
A) At such time as the contract of sale was entered.
B) At such time as the buyer receives the negotiable document of title.
C) When the seller tenders a nonnegotiable document of title to the bailee.
D) When the bailee is orally notified of the sale.
Bailee
An individual or entity that has been given temporary custody but not ownership of someone else's property.
Risk of Loss
The responsibility for accidental damage to goods or property, often discussed in the context of selling or shipping goods.
Negotiable Document of Title
A document that guarantees the delivery of goods and can be transferred by endorsement, making the holder the owner of the goods.
- Scrutinize the situations in which ownership and risk of loss are transferred from the seller to the buyer in diverse sales environments.
Verified Answer
KC
Karnisa CooperMay 23, 2024
Final Answer :
B
Explanation :
The risk of loss passes to the buyer when the buyer receives a negotiable document of title. This document signifies that the buyer has the right to take possession of the goods, thereby transferring the risk of loss from the seller to the buyer.
Learning Objectives
- Scrutinize the situations in which ownership and risk of loss are transferred from the seller to the buyer in diverse sales environments.