If the goods that are the subject of a sale are in the possession of a bailee and are to be delivered without being moved, when does the risk of loss pass to the buyer?
A) At such time as the contract of sale was entered.
B) At such time as the buyer receives the negotiable document of title.
C) When the seller tenders a nonnegotiable document of title to the bailee.
D) When the bailee is orally notified of the sale.

Question

Quizplus · Accepted Answer

The risk of loss passes to the buyer when the buyer receives a negotiable document of title. This document signifies that the buyer has the right to take possession of the goods, thereby transferring the risk of loss from the seller to the buyer.

If the Goods That Are the Subject of a Sale