Legendary Homes, a home builder, purchased various appliances from Ron Mead T.V.

Question

Legendary Homes, a home builder, purchased various appliances from Ron Mead T.V. & Appliance, a retail merchant selling home appliances. They were intended to be installed in one of Legendary Homes’ houses and were to be delivered on February 1. At 5:00 on that day, the appliances had not been delivered. Legendary Homes’s employees closed the home and left. Sometime between 5:00 and 6:30, Ron Mead delivered the appliances. No one was at the home so the deliveryman put the appliances in the garage. During the night Shifty Sam stole the appliances. Shifty Sam subsequently sold the appliances, and Rosie purchased the appliances at a re-sale appliance shop. Legendary Homes denied it was responsible for the loss and refused to pay Ron Mead for the appliances. Ron Mead brought suit for the purchase price.

1. When did risk of loss on the appliance pass to the buyer in this scenario? Explain how you came to your conclusion.

Based on your answer above, will Ron recover compensation in his lawsuit?

What type of title does Rosie have in the appliances? Explain your answer.

Explanation / Answer

Risk of loss is usually passed to the buyer as soon as the appliances delivered to the buyer. In this scenario, ownership has not been transferred to the buyer. It is because delivery has not been communicated to the buyer. Instead Goods has been kept in the garage without intimating the buyer. So, Risk has not been passed to the buyer.

No, Ron will not be able to recover the compensation in his lawsuit.

Rosie Does not have a valid ownership of the Appliances. It is because Rosie bought goods from resale shop who sold stolen goods.

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