Maple Interiors,located in Boston,contracted to sell and ship sofas to Peach Furniture,located in Atlanta.The contract stated that the goods were to be shipped "F.O.B.Boston,via XYZ railroad." Maple delivered the sofas to XYZ railroad.They were shipped from Boston but never seen again.Both Peach and Maple assumed that the other party had the risk of loss,so neither had obtained insurance.Who must bear this loss?
A)Peach must bear the loss because the risk passed to it after the sofas were placed on the loading dock at Maple's warehouse.
B)Peach must bear the loss because the risk passed to it after the sofas were delivered to XYZ railroad.
C)Maple must bear the loss because the goods were never tendered to Peach.
D)Maple must bear the loss because in any sale by a merchant,risk does not pass until the actual delivery of the goods to the buyer.

Question

Quizplus · Accepted Answer

The term FOB (free on board)calls for the seller to deliver the goods free of expense and at the seller's risk at the place designated.In the example the goods were delivered to Boston and to XYZ railroad thus,Maple,the seller,was no longer responsible for risk.

Maple Interiors,located in Boston,contracted to Sell and Ship Sofas to Peach