Question

Quick Corp. agreed to purchase 200 typewriters from Union Suppliers, Inc. Union is a wholesaler of appliances, and Quick is an appliance retailer. The contract required Union to ship the typewriters to Quick by common carrier, "FOB Union Suppliers, Inc. Loading Dock." Which of the parties bears the risk of loss during shipment?

A. Quick, because the risk of loss passes when the typewriters are delivered to the carrier.
B. Union, because the risk of loss passes only when Quick receives the typewriters.
C. Quick, because title to the typewriters passed to Quick at the time of shipment.
D. Union, because both parties are merchants.

Answer 1

In the given contract with an 'FOB Union Suppliers, Inc. Loading Dock' term, Quick Corp. bears the risk of loss during shipment as soon as the typewriters are delivered to the carrier.

Step-by-step explanation:

The party that bears the risk of loss during shipment in the scenario where Quick Corp. agreed to purchase 200 typewriters from Union Suppliers, Inc. and the contract states the shipment as "FOB Union Suppliers, Inc. Loading Dock" is Quick Corp. The term FOB, or Free on Board, indicates that the seller, Union Suppliers, would place the goods on the delivery vehicle. Once they are on the common carrier, the risk of loss passes to the buyer, which in this case is Quick Corp. The answer to the question is A: Quick, because the risk of loss passes when the typewriters are delivered to the carrier.