Everett bought a washer and dryer for $1,200 from Neely Appliances, which was to deliver the set in two days, on its regular delivery date for Everett's area. However, on the night of the sale, Neely's suffered an accidental fire and the washer and

dryer were destroyed. Who has the risk of loss? Who would have the risk of loss if Everett had instead bought a used washer and dryer from his neighbor who was having a moving sale, and the washer and dryer were destroyed after Everett had paid for them and after the neighbor made them available to Everett but before he picked them up?


In the first situation, the risk of loss is on Neely Appliances, and Everett can recover his $1,200 payment from them. If the seller is a merchant, as Neely is, risk of loss does not pass to the buyer until the buyer receives the goods. In the second situation, the seller is not a merchant, and the risk of loss passes to the buyer when the seller tenders the goods. Therefore, the risk of loss was on Everett at the time the used washer and dryer were destroyed.

Business

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