Who prevails? Who has title? Who has the risk of loss? Explain.

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Who prevails? Who has title? Who has the risk of loss? Explain.


On February 7, Pillsbury purchased eight thousand bushels of wheat from Landis. The wheat was being stored at the Greensville Grain Company. Pillsbury also intended to store the wheat with Greensville. On February 10, the wheat was destroyed. Landis demands payment for the wheat from Pillsbury. Who prevails? Who has title? Who has the risk of loss? Explain.

Explanation & AnswerSolution by a verified expert


There is no evidence of document being executed,so it may be considered that it is the seller's tender to the retailer of written documents to the trustee to deliver the goods to the retailer.This may not be the case if the retailer sensibly rejects or the trustee accepts the buyer's authority in ownership of the goods under Section 2-509 of U.C.C.
Here, the title may be with Person P under the condition of,  delivery of an instrument of title, where the agreement may call for carriage for this kind of document.The title may also be with Person P at the time and place of contract, where the goods are recognized and no documents have to be delivered under Section 2-401 of U.C.C.
The probability of loss may be on Person L as no particular mention was made and no documentation was done to state the buyers' authority to own the goods.

Verified Answer

In this case,Person P may succeed. When goods are held by a trustee, there exists risk of loss under certain conditions.But here,there was no evidence of title being exercised.
Person P would have the title as the distribution was done without moving the goods, and the title may advance under certain conditions.
In this case, the probability of loss may fall on Person L as the belongings were not recognized during the time of contract, and the title may pass only when the goods are recognized.

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