Besides the general rule, which factor determines who bears the risk of loss in a sale of goods?

Besides the general rule, which factor determines who bears the risk of loss in a sale of goods?

• A. Agreement between the parties
• B. Common Carrier delivery until obligations are met
• C. Merchant seller until buyer takes physical custody
• D. Non-merchant seller as soon as goods are made available to the buyer

Answer: (A)

The key idea is that the contract between the parties controls who bears the risk of loss. Under the UCC, the seller’s delivery obligations and the point at which risk transfers are defined by what the parties have agreed to, such as terms like FOB shipping point or FOB destination. If the contract specifies how risk is allocated, those terms govern. If there’s no such agreement, the UCC’s default rules apply based on the delivery method, but the overarching factor remains the parties’ agreement. The other statements describe specific delivery scenarios, not the binding factor that allocates risk—the allocation is whatever the contract provides.

The key idea is that the contract between the parties controls who bears the risk of loss. Under the UCC, the seller’s delivery obligations and the point at which risk transfers are defined by what the parties have agreed to, such as terms like FOB shipping point or FOB destination. If the contract specifies how risk is allocated, those terms govern. If there’s no such agreement, the UCC’s default rules apply based on the delivery method, but the overarching factor remains the parties’ agreement. The other statements describe specific delivery scenarios, not the binding factor that allocates risk—the allocation is whatever the contract provides.