The Apple Company sued Crane to recover the value of the articles destroyed. Explain who bears the risk of loss.

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The Apple Company sued Crane to recover the value of the articles destroyed. Explain who bears the risk of loss.

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On May 10, the Apple Company, acting through one Brown, entered into a contract with Crane for the installation of a milking machine at Crane’s farm. Following the enumeration of the articles to be furnished, together with the price of each article, the written contract provided: “This outfit is subject to thirty days’ free trial and is to be installed about June 1.” Within thirty days after installation, the entire outfit, excepting a double utility unit, was destroyed by fire through no fault of Crane. The Apple Company sued Crane to recover the value of the articles destroyed. Explain who bears the risk of loss.

Explanation & AnswerSolution by a verified expert

Explanation

In case of sale on acceptance during the transportation and induction of the machinery, neither title nor probability of loss would have passed on to Individual C.
Company A, the retailer, bears the risk of loss until the customer manifests that person's assent for the goods.  The gadget, which anticipated the double utility unit, was demolished before Individual C revealed the acceptance to Company A, and as a result, it may be considered to be a deal or interest.
The undertaking can be regarded as an acceptance sale because the buyer, that is, Individual C, primarily used the milking system for self-use. A case in which the products may, in compliance with Section 2-316(b) of the Uniform Commercial Code, be sold to the consumer solely for the purpose of resale, the arrangement may be treated as a sale or return.

Verified Answer

In this case, the settlement may be in favor of Individual C. This case may depict the dilemma of whether the undertaking is "sale on acceptance" or a "sale or income".  Here, the title and probability of loss would be transferred to Individual C under section 2-316 (1) of the uniform commercial code.
The undertaking may be considered to be a sale on acceptance as Individual C, the consumer, principally utilized the milking gadget for self-use. If the goods are to be distributed to the customer predominantly for the objective of resale, the agreement may be considered to be a sale or return under Section 2-316(b) of the uniform commercial code.

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