[Anonymous]

West purchased a painting from Noll, who is not in the business of selling art. West is picking up the painting from Noll. Noll tendered delivery of the painting after receiving payment in full from West. West informed Noll that West would be unable to take possession of the painting until later that day. Thieves stole the painting before West returned. The risk of loss:

A: Remained with Noll, because West had not yet received the painting.

B: Remained with Noll, because the parties agreed on a later time of delivery.

C: Passed to West at the time the contract was formed and payment was made.

D: Passed to West on Noll’s tender of delivery.

WIll attempt to find the answer once I’m done with the CPAexcel practice session (it doesn’t organize the answers as neatly as Wiley).

[thehip41]

It's not A or B since that person has the money.

So it's C or D.

We have three things happen.

contract (or agreement) to buy the painting
payment
delivery

With C, only the agreement and payment have been made. Person A still has control of the painting. If the painting gets stolen, Person A should have to return the money, and Person A would take the loss.

In answer D, delivery has been made, but Person B hasn't picked it up yet. The transaction is over.

A has money
B has painting

Painting gets stolen, B takes loss.

FAR - 83
AUD - 73 92
BEC - 83
REG - 88

Licensed CPA in the state of Michigan

[Author]

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