Marco Manufacturing contracted to sell Kurtz Industries 3,000 iron clasps. The contract specified: F.O.B. Kurtz Industries. Upon arrival and inspection, the goods were rejected by Kurtz Industries because they did not conform to the contract specifications. In transit back to Marco Manufacturing, the common carrier's truck overturned and completely destroyed the clasps. Which statement is correct?
A. Marco may sue Kurtz for the contract price, as risk of loss transferred to Kurtz at the F.O.B. point.
B. Kurtz will not be liable for the purchase price. The risk of loss had not yet transferred since the goods were nonconforming.
C. The loss will be split between the parties on a 50/50 basis.
D. The loss will be assigned to the party who can best bear the loss.
Answer: B
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