Business Law
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(Mallor, Jane P. et al., Business Law: The Ethical, Global, and E-Commerce Environment (15th Ed.), McGraw-Hill (2013)
Here is the fact pattern I want you to base your answer on:
- You want the latest in mini laptop computers.
- You find what you need by searching on the Internet.
- The seller is in Taiwan.
- You negotiate a deal with the seller over the Internet and buy the computer.
- The seller agrees to ship you the computer by boat.
Answer this Question: (minimum 200 words; any format)
What terms (words) would you insist be included in the Sales Contract so you would not bear the Risk of Loss?
Explain in detail why you use specific words and terms (i.e. compare and contrast).
Use the following to guide you:
- My Lecture
- “Risk of Loss” (Chapter 19, esp. pp. 516 – 519)
- “Risk of Loss in International Sales”
End of Assignment
Note: Assignment grades will be determined as follows: 50% content; 30% analysis; and 20% organization and mechanics.
Lecture
Focus on: “Risk of Loss”& lt; /span>
The Overall Framework
Our main focus this Unit will be on the concept of “Risk of Loss”.
Note that we are now dealing with the UCC.
The Sale of Goods involves a transfer of ownership. The overriding question in most of the legal cases in this area involves when ownership was transferred, because it is the owner that bears the risk of loss if the gods are lost, stolen, destroyed etc.
Title
When the law talks about ownership the term “Title” is used (p. 510), as in: “ who holds title to these goods?” Goods are considered to be “ personal property” (as opposed to “real property” which is land, buildings, and fixtures) that is tangible (something you can touch). The main issue here is “Passage of Title”. Page 519 of the Text list situations when title “passes”; that is, when the buyer becomes the owner and, as a result, bears the “risk of loss”.
Risk of Loss
Passage of Title depends upon the terms of the Contract for the sale of the goods. Our Text (pages 516 – 17) explains various commonly used terms that are put into Contracts such as FOB; FAS; CIF; C & F
Each should be reviewed with risk of loss in mind.
Each lists circumstances for the point at which the risk of loss or damage to gods identified to a contract passes to the buyer. “Identified to a contract” means the goods have been separated from a larger group or picked out specifically for this transaction.
The Windows, Inc. v. Jordan Panel Systems Corp. case (link to this Case is in the Unit) provides an example of the risk borne by a buyer in a shipment contract.
