Cengage Advantage Books: Business Law 9th Edition by Arnold Goldman ,William Sigismond

Exercise 18

Clark, a merchant, sold a boat to Chatham, a consumer buyer, for cash. The sale took place at the Parkside Marina, Clark's place of business. Chatham, however, was about to go on a business trip and asked Clark to keep the boat at the marina until his return. A severe storm struck soon thereafter. When he returned, Chatham could not take delivery of the boat because it had sunk as the result of the storm. Nevertheless, Clark refused to refund the cash price to Chatham, claiming that, because a present sale had been made, risk of loss passed to Chatham, thereby making Chatham liable to absorb the cost of the boat. Is Clark correct? (Chatham v. Clark's Food Fair, Inc., 127 S.E.2d 868)