Business Law and the Regulation of Business 11th Edition by Richard Mann, Barry Roberts

Exercise 1

Harrison, a men's clothing retailer located in Westport, Connecticut, ordered merchandise from Ninth Street East, Ltd., a Los Angeles-based clothing manufacturer. Ninth Street delivered the merchandise to Denver-Chicago Trucking Company (Denver) in Los Angeles and then sent four invoices to Harrison that bore the notation ''F.O.B. Los Angeles.'' Denver subsequently transferred the merchandise to a connecting carrier, Old Colony Transportation Company, for final delivery to Harrison's Westport store. When Old Colony tried to deliver the merchandise, Harrison's wife asked the truck driver to deliver the boxes inside the store, but the driver refused. The dispute remained unresolved, and the truck departed with Old Colony still in possession of the goods. By letter, Harrison then notified Ninth Street of the nondelivery, but Ninth Street was unable to locate the shipment. Ninth Street then sought to recover the contract purchase price from Harrison. Harrison refused, contending that risk of loss remained with Ninth Street because of its refusal to deliver the merchandise to Harrison's place of business.
a. What are the arguments that the risk of loss remained with Ninth Street?
b. What are the arguments that the risk of loss passed to Harrison?
c. What is the appropriate outcome?