Who bears the risk for the loss of the home? Why?
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Mike Moses purchased a mobile home, including installation, from Gary Newman. Newman delivered the home to Moses’s lot. Upon inspection of the home, Moses’s fiancée found a broken window and water pipe. Moses also had not received keys to the front door. Before Newman corrected these problems, a windstorm destroyed the home. Who bears the risk for the loss of the home? Why? |
Explanation
The case is governed by Section 2-510(1) of the UCC. In case of a sale, when the delivered goods fail to adhere to the contract, the buyer has the right to reject. The risk of loss remains with the seller until goods are accepted by the buyer. In this case, neither the installation was complete nor did the goods adhere to the contract. So, the risk of loss cannot be shifted from Individual G to Individual M.
Sample Response
The loss is going to be borne by Individual G, based on Section 2-510(1) of the Uniform Commercial Code (UCC). The risk of loss remains with Individual N because the goods are nonconforming to the contract.
