Question

Sand Corp. sold and delivered a photocopier to Barr for use in Barr's business. According to their agreement, Barr may return the copier within 30 days. During the 30-day period, if Barr has not returned the copier or indicated acceptance of it, which of the following statements is true with respect to risk of loss and title?

A. Risk of loss passes to Barr, but title remains with Sand.
B. Risk of loss and title passes to Barr.
C. Risk of loss and title remain with Sand.
D. Risk of loss remains with Sand, but title passes to Barr.

Answer 1

The correct answer is B: Risk of loss and title have likely passed to Barr once Sand Corp. completed its delivery obligations, unless the agreement specifically states otherwise. This is in accordance with the provisions of the Uniform Commercial Code.

Step-by-step explanation:

Sand Corp. has sold a photocopier to Barr, with an agreement allowing Barr to return the copier within 30 days. Whether risk of loss and title have passed from Sand Corp. to Barr during this 30-day period, if Barr neither returns the copier nor explicitly accepts it, can be a point of contention in business transactions. According to the Uniform Commercial Code (UCC) that governs commercial transactions in the United States, risk of loss generally passes to the buyer when the seller completes their delivery obligations unless the contract explicitly states otherwise.

In this case, if the agreement does not specify otherwise, the risk of loss passes to Barr once Sand Corp. has completed its delivery obligations, which would be when Barr has received the photocopier. As for title, it refers to the legal ownership of the property, and it also generally passes to the buyer upon delivery of the goods, unless stated differently in the agreement. Since Barr has not returned the copier or indicated acceptance, it is likely that both risk of loss and title have passed to Barr. Therefore, the correct answer would be B: Risk of loss and title passes to Barr.