On September 22, a fire destroyed the seller’s plant containing the goods, which were not covered by insurance. Who bears the risk of loss? Why?
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Seller had manufactured forty thousand pounds of plastic resin pellets specially for the buyer, who agreed to accept them at the rate of one thousand pounds per day upon his issuance of shipping instructions. Despite numerous requests by the seller, the buyer issued no such instructions. On August 18, the seller, after warehousing the goods for forty days, demanded by letter that the buyer issue instructions. The buyer agreed to issue them beginning August 20 but never did. On September 22, a fire destroyed the seller’s plant containing the goods, which were not covered by insurance. Who bears the risk of loss? Why? |
Explanation
If the customer violates the agreement, the possibility of risk advances to the customer, provided that the location of the conforming goods, as per the contract,has been identified.In such a case,the possibility of the retailer's loss rests on the customer,for a commercially sensible time, to the length of any insufficiency in the beneficial insurance coverage provided by the retailer.
Verified Answer
Here, the customer may be liable for the loss and the settlement may be made in favor of the retailer.The violation of the agreement has been made by the customer since the customer has failed to provide aninjunction to the retailer regarding the agreement. And that is why, the retailer may be benefitted.
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