Question

Franco, a New York dealer, purchased twenty-five barrels of specially graded and packed apples from a producer at Hood River, Oregon, under a contract that specified an agreed price on delivery at Franco's place of business in New York. The apples were shipped to Franco from Oregon but, through no fault of Franco, were totally destroyed before reaching New York. Does any liability rest on Franco?

Answer 1

Answer:

No, the liability does not rest with Franco as the contract specified an agreed price to be paid on delivery at Franco's place of business in New York.

The negotiations for this deal can better be explained by a Destination contract which is used for a transaction involving the sale of goods. In a destination contract, the seller promises to deliver specified goods to the buyer’s destination. The seller must therefore ensure that the purchased goods get to buyer’s agreed upon destination and all risk of loss is on the seller until he completes his delivery obligations under the destination contract. If the goods are destroyed or damaged while in delivery, the seller bears the risk of loss and after the goods have been delivered to the agreed location, the buyer then assumes all risk associated with the goods.

Explanation: