Chapter 17 Transfer of Ownership and Risk of Loss

Who May Transfer the Ownership of Goods? n Persons Authorized to Do So May Transfer Another’s Title n Fraudulent Buyers May Transfer Better Title Than They Have n Holders of Negotiable Documents of Title May Transfer Better Title Than They Have n Merchants Who Keep Possession of Goods They Have Sold

What is Required for Transfer of Ownership? n Existing goods - physically in existence even though they may not be in a fully assembled and immediately deliverable condition n Identified goods - have been specifically designated as the subject matter of a particular sales contract n Future goods - goods that are not both existing and identified n Fungible goods - goods that are homogeneous in nature

When Does Ownership Transfer? n If the Seller Is to Deliver the Goods to Their Destination n If the Seller Is to Ship, But Not Deliver, the Goods to Their Destination n If the Seller Is to Deliver a Document of Title n If the Buyer Is to Take Possession of the Goods at the Place of Sale

When Does Risk of Loss Transfer? n If the Seller Ships the Goods by Carrier –FOB - free on board n If the Goods Are held by a Bailee –Bailee - has temporary possession of goods n If Either party Breaches After the Goods Are Identified n If the Goods Are Neither to Be Shipped by Carrier Nor Be Held by a Bailee

When Do Insurable Property Interests Transfer? n Cash-and-Carry Sales n Sales on Credit n COD Sales n Sale or Return n Sale on Approval n Sale of an Undivided Interest n Auctions

What Procedure Must Be Followed in a Bulk Transfer of Goods? n Bulk Transfer - the transfer, generally by sale, of all or a major part of the goods of a business in one unit at one time