Transfer of Ownership and Risk of Loss

1
Chapter 17

• Transfer of Ownership and Risk of Loss

2
Who May Transfer the Ownership of Goods?

• Persons Authorized to Do So May Transfer
  Anothers Title
• Fraudulent Buyers May Transfer Better Title Than
  They Have
• Holders of Negotiable Documents of Title May
  Transfer Better Title Than They Have
• Merchants Who Keep Possession of Goods They Have
  Sold

3
What is Required for Transfer of Ownership?

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

4
When Does Ownership Transfer?

• If the Seller Is to Deliver the Goods to Their
  Destination
• If the Seller Is to Ship, But Not Deliver, the
  Goods to Their Destination
• If the Seller Is to Deliver a Document of Title
• If the Buyer Is to Take Possession of the Goods
  at the Place of Sale

5
When Does Risk of Loss Transfer?

• If the Seller Ships the Goods by Carrier
• FOB - free on board
• If the Goods Are held by a Bailee
• Bailee - has temporary possession of goods
• If Either party Breaches After the Goods Are
  Identified
• If the Goods Are Neither to Be Shipped by Carrier
  Nor Be Held by a Bailee

6
When Do Insurable Property Interests Transfer?

• Cash-and-Carry Sales
• Sales on Credit
• COD Sales
• Sale or Return
• Sale on Approval
• Sale of an Undivided Interest
• Auctions

7
What Procedure Must Be Followed in a Bulk
Transfer of Goods?

• 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