On September 1,Mike enters into an agreement with Kelly to purchase 100 sets of headphones.The contract entered into between Mike and Kelly is a shipment contract.On September 10,Kelly identifies the 100 sets of headphones that will be sent to Mike.On September 15,Kelly ships the headphones.Mike receives the headphones on September 20.When does Kelly's insurable interest terminate?
A) on September 1
B) on September 10
C) on September 15
D) on September 20
E) Kelly never had an insurable interest.

Question

Quizplus · Accepted Answer

Kelly's insurable interest terminates on September 15, when she ships the headphones. As per the terms of the shipment contract, the ownership of the goods passes from Kelly to Mike upon shipment. Therefore, Kelly no longer has an insurable interest in the headphones after she ships them to Mike.

On September 1,Mike Enters into an Agreement with Kelly to Purchase