Koa contracts to ship one hundred cases of Fresh Niblets brand corn to Allman of
ID: 2408814 • Letter: K
Question
Koa contracts to ship one hundred cases of Fresh Niblets brand corn to Allman of Dayton, Ohio by way of National Truck Lines on October 2, FOB Dayton at $25 per case. Allman is to make a ten percent down payment. The payment is to be received at Koa’s place of business before shipment occurs. Koa ships the corn on October 2, although she has not yet received the down payment, and the goods arrive in Dayton. There they remain in National’s truck. Because Allman has failed to make the down payment, Koa orders National not to take the goods to Allman’s warehouse. Allman claims that at this point Koa has no right to take back the corn. Discuss Koa’s rights and the validity of Allman’s argument.
Explanation / Answer
Allman has violated the contract condition of making 10 percent downpayment before taking delivery. Since, Allman has defaulted or breached on this conditon, Allman has never obtained the ownership of the goods. Hence, Koa has every right to take the goods back and not deliver. It does not matter if the goods are in Dayton.
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