Question

Instructions:  Answer each of the following questions in 10 sentences or less. Type and label your answers. Use the IRAC format.

1) Marshall Clothing (Seller) entered a shipment contract with Chase Department Stores (Buyer) to send them 3,000 black robes via Mercury Shipping Co. The robes were irreparably damaged in Mercury’s warehouse by moths. Who (the seller or the buyer) bears the risk of loss and why?

2) Grocer orders 50 gallons of whole milk from Dairy to be delivered December 23. On December 20 he receives 60 gallons of skim milk. He rejects the order but does not inform Dairy of his rejection. On January 2, Dairy demands full payment. Does the Grocer have an obligation to pay? Why or why not?

Answer 1

1. Marshal clothing----

Ans. It looks like a shipment contract, the goods are sent through the common carrier, as the goods are spoiled in Mercury Shipping Co it is the responsibility of the buyer to make payment once the goods are dispatched as per the contract signed by them. The buyer has to make payment to the seller. In return, the buyer can sue the shipping company for the damage to the goods. Once the goods are shipped as per the contract, the responsibility of the seller ceased to exist.

2. Grocer orders 50 gallons----

Ans. Under the uniform commercial code it is the duty of the buyer to inspect the goods once it is received and in case of any dispute with respect to the goods he has to inform the seller, in this case instead of receiving the whole milk the buyer received the skimmed milk, that was against the order, but he did not inform the seller, there was a silence from the buyer to the seller the silence constitutes acceptance. Yes, the Grocer has an obligation to make payment.