question archive Jumping Jeff’s Trampolines, in Nashville, contracted with Bouncing Betty’s Toys to ship 50 trampolines to Bouncing Betty’s retail store in Miami to be dropped off at her store’s loading dock
Jumping Jeff’s Trampolines, in Nashville, contracted with Bouncing Betty’s Toys to ship 50 trampolines to Bouncing Betty’s retail store in Miami to be dropped off at her store’s loading dock
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Jumping Jeff’s Trampolines, in Nashville, contracted with Bouncing Betty’s Toys to ship 50 trampolines to Bouncing Betty’s retail store in Miami to be dropped off at her store’s loading dock. If the truck carrying the trampolines is destroyed in a fire on the way from Jumping Jeff’s to Bouncing Betty’s, exactly 75% of the way through the trip, who bears the risk of loss if goods are to be shipped FOB Miami loading dock?
a)Bouncing Betty’s bears the risk of loss.
b)Jumping Jeff’s bears 25% of the risk of loss and Bouncing Betty’s bear 75% of the risk of loss.
c)Both Jumping Jeff’s and Bouncing Betty’s bear the risk of loss equally.
d)Jumping Jeff’s bears the risk of loss.
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The correct answer is the last option i.e. option d) Jumping Jeff’s bears the risk of loss.
This is a destination contract.
Under this contract, Jumping Jeff’s Trampolines, in Nashville, contracted with Bouncing Betty’s Toys to ship 50 trampolines to Bouncing Betty’s retail store in Miami to be dropped off at her store’s loading dock.
The risk of loss is transferred to Bouncing Betty only when Jumping Jeff tenders the good at the specified / agreed place. Till that time, the risk of loss remains on Jumping Jeff. Here, the truck was destroyed on its way to destination, before it reached the destination. Hence, the correct answer is the last option i.e. option d)
