Jonathan sells crates of tomatoes on board the SS Apapa to Margaret.At the time of the sale,both parties are unaware that the crates were washed overboard.What is the status of the contract between Jonathan and Margaret?
A)Jonathan is still the owner of the shipment.Jonathan bears the loss and will have to refund Margaret's money.
B)Margaret has to pay the agreed price and recover from her insurance.
C)The ownership passed to Margaret,but Jonathan is still in possession,and so he is liable.
D)Margaret is the new owner of the tomatoes and has to bear the loss.
E)Margaret may sue Jonathan for the tort of deceit.

Question

Quizplus · Accepted Answer

The principle of caveat emptor (buyer beware) applies in this case, as Margaret was buying goods that were lost before delivery. As such, Jonathan bears the loss and will have to refund Margaret's money. The contract is void as the subject matter no longer exists.

Jonathan Sells Crates of Tomatoes on Board the SS Apapa