An Important Aspect Of Purchasing And Selling Goods Whether

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An important aspect of purchasing and selling goods whether for trade or personal reasons is to understand who bears the burden of damage to the goods. This is of great importance, but often overlooked, determining when risk has passed from one party to the next establishes whether the seller may still recover the full price of the damaged goods and the buyer be left with damaged goods or not. In this short note we will briefly look at the consequences of not dealing with these issues in your contract as well as some brief thoughts on how this may be avoided. WHAT DO WE MEAN BY RISK PASSING AND WHEN DOES THIS HAPPEN? When we talk of the risk passing to the buyer what is referred to is the burden of having to deal with the damaged goods.…show more content…
As such, in these types of contracts the risk does not pass until the goods described in the contract are appropriated to the contract. That is, when the seller has set aside a specific 10 tonnes of maize to be bought by the buyer. Until the product has been appropriated to the contract the seller is liable to replace the goods before they are entitled to the purchase price, once they have been appropriated or distinguished the risk for damage passes to the buyer. What if the sale is subject to a condition? For example suppose that the contract of sale for a buffalo was made conditional on the buffalo being tested for, and being found free of, any disease (the sale is suspended until the buffalo is found to be disease free) and the buffalo dies before this can be determined. In situations like this the risk does not pass to the buyer until the condition has been fulfilled. On fulfilment of the condition the risk becomes the buyers from the date of conclusion of the sale. In the above scenario the risk has not yet passed to the buyer therefore the seller bears the risk of the buffalo dying or being injured. The buyer does not have to pay the price even when it is later determined that the buffalo was disease free. If the buffalo had been injured or died after the condition was fulfilled (the vet finding that the buffalo was

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