Question

Varoom Motors, Inc., sells Weber an Xtrem-Sport motorcycle. The cycle is held by Yeoman’s Warehouse for delivery to Weber at Yeoman’s location. When does the risk of loss pass to Weber for the motorcycle?

A) Upon transfer of ownership to Weber
B) Upon Weber's payment for the motorcycle
C) Upon Yeoman's Warehouse receiving the motorcycle from Varoom Motors
D) Upon Weber receiving the motorcycle at Yeoman's location

Answer 1

The risk of loss passes to Weber when he physically takes possession of the motorcycle at Yeoman's Warehouse, assuming typical delivery terms like 'FOB destination' apply.

Step-by-step explanation:

When considering the passage of risk of loss in a sales transaction, it typically depends on the terms of the sale and the delivery terms. The Uniform Commercial Code (UCC) provides guidelines for such transactions. In the scenario with Varoom Motors, Inc., selling an Xtrem-Sport motorcycle to Weber with delivery at Yeoman's Warehouse, the risk of loss would pass to Weber when he physically takes possession of the motorcycle at Yeoman's location. This is assuming a typical "FOB destination" contract agreement, where the seller retains risk of loss until delivery is made at the destination specified by the buyer.