Fred has 100 tons of stone in a warehouse.Barney agrees to purchase the stone from Fred.The contract states that Barney will pick-up the stone directly from the warehouse.Fred delivers a warehouse receipt to Barney for the stone.Before Barney is able to pick-up the stone,a tornado sweeps through and destroys the stone.Who has the risk of loss?
A) Fred has the risk of loss because Barney did not pick-up the stone yet.
B) The warehouse has the risk of loss because Barney did not pick-up the stone yet.
C) Barney has the risk loss because the risk of loss was transferred when he received the warehouse receipt.
D) Fred, the warehouse and Barney are equally responsible for the risk of loss.
E) Fred and the warehouse are equally responsible for the risk of loss.

Question

Quizplus · Accepted Answer

The risk of loss is transferred when Barney receives the warehouse receipt, according to the contract. Therefore, Barney has the risk of loss even though he has not physically taken possession of the stone yet.

Fred Has 100 Tons of Stone in a Warehouse