Question

Jones' Auto in Dallas, Texas buys 50 cars from ABC Auto in Tokyo, Japan. They sign a contract whereby Jones' Auto assumes the risk of any damages to the cars until they are delivered. What term of sale have they agreed to?

Answer 1

Jones' Auto assumes the risk of damages for the cars until delivery, likely indicating a term of sale like FOB destination where the seller retains risk until goods are delivered to the buyer’s location.

Step-by-step explanation:

When Jones' Auto in Dallas, Texas agrees to purchase 50 cars from ABC Auto in Tokyo, Japan and assumes the risk of damages until delivery, they have likely agreed to a term of sale known as Free on Board (FOB) destination, or a similar term where the seller retains the risk until the goods are delivered to the buyer's location. Such agreements delineate when the risk of loss or damage to the goods transfers from the seller to the buyer. The specific term used (not explicitly mentioned in the provided text) will depend on the Incoterms or international commercial terms, which standardize international shipping agreements.