If the parties do not provide for a transfer of ownership, section 2-401, paragraph 2, of the UCC provides that “the property is transferred to the buyer at the time and place in which the seller completes his service by referring to the physical delivery of the goods.” And if the parties do not have a duration in their delivery contract, the standard delivery time of the UCC is controlled. “The place of delivery is the seller`s seat or if it is not domiciled,” and delivery is made where the seller “provides and accepts the goods to the buyer and provides the buyer with a reasonably necessary notice to enable delivery.” Unique Code of Trade, sections 2-308 and 2-503. If the seller ships non-compliant goods but has time to fulfill his contractual obligations, or if he reasonably believed that the goods were appropriate, he can inform the buyer of his intention to heal, and if he does so in a timely manner, the buyer must pay. Now suppose that a seller violates the contract by offering non-compliant goods, and that the buyer, after discovering the non-compliance, accepts – the non-compliant goods are in the hands of the buyer. The buyer has the right to revoke the acceptance, but before the defective merchandise is returned to the seller, it is destroyed in the buyer`s possession. The seller has broken, but here is the trick: the UCC says that the seller bears the loss only to the extent of a defect in the buyer`s insurance. Unique Code of Trade, Section 2-510 (2). Very Fast Foods had delivered the sponges and a few days later it turned out that the sponges were not in compliance with the contract. Very Fast has the right to revoke it and announces its intention. The next day, the camp burns and the sponges are destroyed.

She then discovers that her insurance was not enough to cover all the sponges. Who represents the loss? The seller in turn does so to the extent of a lack of insurance coverage of the buyer. The terms and conditions under which the parties set their delivery obligations, which then affect securities transfers (F.O.B., F.A.S., ex-schiff, etc.), were discussed earlier in this chapter. Similarly, the parties may use common conditions to determine which party is at risk of loss; this occurs during the trial sale. That is, sometimes the seller will allow the buyer to return the goods, even though the seller has complied with the contract. If the merchandise is primarily for the purchaser`s use, the transaction is called “sale by authorization.” If they are primarily for resale, the transaction is called “sale or refund.” If the buyer is really just a seller for the “seller,” it`s a shipping sale. The security is important for three reasons: it determines whether a sale has taken place, it determines the rights of creditors and it has an impact on who has an insurable interest. Contracting parties may give explicit consent in the event of a change in the title, or by indirectly agreeing to delivery conditions (due to the absence of an explicit agreement, control of the delivery of the property). Delivery terms include delivery contracts, destination contracts and delivery without the goods being moved (with or without proof of ownership). If it is not said when the security moves and the parties have not indirectly consented by the choice of a delivery time, the security is deferred when the delivery obligations are met and, in the absence of delivery conditions, the delivery is made when the seller makes the goods available at the seller`s headquarters (or if the seller does not have a head office , the merchandise is made available to the seller) – then the title moves.

In setting the transfer of ownership and the risk of loss, the parties often use succinct terminology whose importance must be respected in order for the contract to be useful.