Chapter 17

Transfer of Ownership and Risk of Loss

Who May Transfer the Ownership of Goods? Persons Authorized to Do So May Transfer

Another’s 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

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

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

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

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

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