TITLE AND RISK OF LOSS

1
TITLE AND RISK OF LOSS
2
SHIPMENT v. DESTINATION CONTRACT

• F.O.B. Free on Board (at Ss expense)
• F.O.B. place of shipment (shipment contract)
• F.O.B. destination (destination contract)

3
BILLS OF LADING

• Negotiable
• Nonnegotiable

4
Goods given to CARRIER

• SHIPMENT CONTRACT
• Title passes to B Time and place for shipment
• Risk of Loss passes to B When carrier receives
  the goods from S
• DESTINATION CONTRACT
• Title passes to B Tender of delivery
• Risk of Loss passes to B Delivery tendered at
  destination

5
Goods given to WAREHOUSEMAN

• NEGOTIABLE DOCUMENT OF TITLE
• Title passes to B When the document is delivered
  to B
• Risk of Loss passes to B When B receives
  document
• NONNEGOTIABLE DOCUMENT OF TITLE
• Title passes to B When document is delivered to
  B
• Risk of Loss passes to B After B has had a
  reasonable time to notify bailee

6
Goods given to WAREHOUSEMAN

• NO DOCUMENTS USED
• Title passes to B Time and place of contract
• Risk of Loss passes to B When bailee
  acknowledges B's right to the goods

7
Personal Delivery by S

• IF S IS A MERCHANT
• Title passes to B Time and place of contract
• Risk of Loss passes to B When goods are
  delivered to B

8
Personal Delivery by S

• IF S IS A NONMERCHANT
• Title passes to B Time and place of contract
  unless there is a document of title
• Risk of Loss passes to B When goods made
  available

9
Distinction between title being

• VOID
• S is a thief
• VOIDABLE
• S acquired title to goods by
• Fraud
• check bounced
• credit, S was insolvent
• purchased by minor

10
Who is protected against rightful owner?

• VOID
• No title
• Can transfer nothing
• Goods returned to Rightful owner
• B goes after S

11
Who is protected against rightful owner?

• VOIDABLE
• B is protected if Good Faith Purchaser
• paid value
• had no knowledge or reason to know
• Rightful owner goes after S

12
MITCHELL MOTORS, INC. v. BARNETT.COURT OF
APPEALS OF GEORGIA, THIRD DIVISION

• Chris Auto sold a Jeep to one of its regular
  customers, Barnett, for 16,734.69. Barnett paid
  for the Jeep in full. At the time of sale,
  Barnett received a sales contract, a vehicle
  buyer's order, and possibly an odometer
  statement. He did not receive the Jeep's
  certificate of title, but expected Chris Auto to
  process the paperwork and mail the certificate to
  him, "just like they always did." According to
  Barnett, "that's just the way it was always done
  Pay the tax and tag and title fee, and I get it
  in the mail from the dealership."

13
MITCHELL MOTORS, contd

• When Barnett did not receive the Jeep's
  certificate of title within four to six weeks, he
  called Chris Auto, which promised to "check into"
  the situation. He heard nothing further and
  called the dealer back. At that point, Barnett
  learned that Chris Auto had purchased the Jeep
  from Mitchell Motors, which apparently still had
  the certificate of title, and "that there was a
  problem Chris Auto was trying to straighten
  out." Eventually, a representative from Mitchell
  Motors called Barnett and advised that Chris Auto
  had paid them with a check that had been
  dishonored, and therefore, the vehicle remained
  the property of Mitchell Motors. The Mitchell
  Motors representative demanded that Barnett
  pay Mitchell Motors 14,000 or return the Jeep.
  Barnett refused, arguing that he had already
  purchased the Jeep from Chris Auto. Mitchell
  Motors did not release the certificate of title
  to Barnett, who had been unable to obtain a
  license tag and was told by police not to drive
  the Jeep.