Fred has 100 tons of stone in a warehouse.Barney agrees to purchase the stone from Fred.The contract states that Barney will pick up the stone directly from the warehouse.Fred delivers a warehouse receipt for the 100 tons of stone to Barney.Before Barney is able to pick up the stone,a tornado sweeps through and destroys the stone.Who has the risk of loss?

Question

Quizplus · Accepted Answer

The risk of loss was passed to Barney when he received the warehouse receipt. The warehouse receipt serves as a document of title and signifies the transfer of ownership and risk of loss to the buyer. Since Barney received the warehouse receipt before the tornado destroyed the stone, he assumes the risk of loss.

Fred Has 100 Tons of Stone in a Warehouse