Larry, a merchant seller, had contracted with Simon to buy welding equipment. The contract stipulated that Larry would pick up the equipment from Simon's warehouse on the 14^th day from the date of the contract. Larry could not make the pick-up on the stipulated date and before he could do so on the 15^th day, the warehouse and its contents were destroyed by arsonists. In this situation, who bears the risk of loss for the goods that were to be received by Larry?

Question

Quizplus · Accepted Answer

Under the Uniform Commercial Code (UCC), when goods are to be picked up by the buyer (Larry) but the buyer fails to take possession of the goods as agreed, the risk of loss remains with the buyer if the goods are identified to the contract and the loss occurs after the risk of loss was supposed to shift to the buyer. Since Larry did not pick up the welding equipment on the agreed date, he bears the risk of loss for the goods destroyed by the fire.

Larry, a Merchant Seller, Had Contracted with Simon to Buy