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Risk of Loss

Learn what risk of loss is, which party bears the risk of loss if there is no breach of contract, and how a breach of contract affects the risk of loss.

Transcript

Other gap-filler provisions provided by Article 2 include the default rules governing when the risk of damage or loss to goods passes from the seller to the buyer. This timing depends substantially on whether the contract has been breached and the type of contract involved.

I. Section 2-509

Section 2-509 sets forth the rules to determine risk of loss, assuming neither party has breached the contract.

A. Shipment Contract

Let’s imagine a newspaper ordered 10,000 reams of newsprint from a...