Question

Rayco Ski Shop purchased 500 pairs of skis from Skitron. Rayco is located in Colorado. Skitron's business is in Tennessee. The purchase order included the following term: "F.O.B. Colorado." The contract makes no mention of risk of loss or title. The contract can be described as a:

A Shipment contract.
B. Destination contract.
C. Bulk transfer
D. Sale on approval

Answer 1

Destination contract.

Step-by-step explanation:

The uniform commercial code (UCC) is a set of rules that governs transactions that involves sale of goods between different parties.

Under the UCC a destination contract is defined as an agreement where loss and damage before delivery of a good is not the responsibility of the buyer.

Simply the properties are still property of the seller till they get to the buyer intact. Then they become the property of the buyer.

Rayco and Skitron have made a destination contract that makes no mention of risk of loss or title. It is assumed the skis are property of Skitron till they are delivered.

Answer 2

B. Destination contract.

Step-by-step explanation:

This type of contract can be used in business proceedings, its main purpose is to make sure that the goods that are involved in the business gets to the destination of the other person at the other end of the contract.

With a destination contract, the risk of loss transfers from the carrier to the seller when the goods reach their destination. The seller is responsible for the goods until they reach the buyer's destination. However, if anything happens to the shipment once it's delivered, the buyer is responsible for any costs.

With a shipment contract, on the other hand, the seller is not responsible for the goods once he gives it to the carrier for delivery.