Rhode Island Notice by Buyer of Rejection of Goods - Risk of Loss Remains on Seller

State:
Multi-State
Control #:
US-02882BG
Format:
Word; 
Rich Text
Instant download

Description

In this form the buyer giving notice of its rejecting delivery of the goods. This is covered by Section 2-602 of the Uniform Commercial Code, which state:


Rejection of goods must be within a reasonable time after their delivery or tender. It is ineffective unless the buyer seasonably notifies the seller. Subject to the provisions of the two following sections on rejected goods (Sections 2-603 and 2-604). After rejection any exercise of ownership by the buyer with respect to any commercial unit is wrongful as against the seller; and


" If the buyer has before rejection taken physical possession of goods in which he does not have a security interest under the provisions of this Article (subsection (3) of Section 2-711), he is under a duty after rejection to hold them with reasonable care at the seller's disposition for a time sufficient to permit the seller to remove them; but


" The buyer has no further obligations with regard to goods rightfully rejected.

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FAQ

With a shipment contract, the buyer bears the risk of loss for the goods prior to actually receiving them. Here, the seller's only duty is to get the goods to a common carrier and make proper delivery arrangements for the goods to get to the seller.

Goods being sold remain at the seller's risk until the property in the goods is transferred to the one who buys the goods known as the buyer. Once this property is passed, the goods are at the buyer's risk even if the delivery has not been made. This is what passing of risk means in the business world.

So if there is a breach by the seller (delivery of nonconforming goods), the risk of loss never shifts except if the buyer has taken possession of the nonconforming goods; in that case, the buyer does have the risk of loss insofar as her insurance covers the loss.

The Uniform Commercial Code (UCC) § 2?509 allocates the risk of loss when there is no contractual breach, and shifts the risk of loss to the buyer when the seller or bailee take certain steps to deliver the goods in certain circumstances.

If it is a destination contract (FOB (buyer's city)), then risk of loss is on the seller. If it is a delivery contract (standard, or FOB (seller's city)), then the risk of loss is on the buyer.

Goods Held by the Seller: If the seller is a merchant, risk of loss passes to the buyer at the time he or she takes physical possession of the goods. If the seller is a non-merchant, risk of loss passes to the buyer when the seller tenders the goods to the buyer.

With a shipment contract, the buyer bears the risk of loss for the goods prior to actually receiving them. Here, the seller's only duty is to get the goods to a common carrier and make proper delivery arrangements for the goods to get to the seller.

The Uniform Commercial Code (UCC) § 2?509 allocates the risk of loss when there is no contractual breach, and shifts the risk of loss to the buyer when the seller or bailee take certain steps to deliver the goods in certain circumstances.

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Rhode Island Notice by Buyer of Rejection of Goods - Risk of Loss Remains on Seller