[needhelpnow]

Pulse Corp. maintained a warehouse where it stored its manufactured goods. Pulse received an order from Star. Shortly after Pulse identified the goods to be shipped to Star, but before moving them to the loading dock, a fire destroyed the warehouse and its contents. With respect to the goods, which of the following statements is correct?

Incorrect

A.Pulse has title but no insurable interest.

B. Star has title and an insurable interest.

C. Pulse has title and an insurable interest.

D.Star has title but no insurable interest.

The correct answer is C.

Title passes from the seller to the buyer only if the goods are identified in the sales contract. A buyer has an insurable interest from the time the goods are identified in the contract.

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But I thought that Pulse identified the goods. Then why didn’t the insurable interest transfer over? Thank you!

[Anonymous]

Insurable interest hadn't passed to the buyer because the merchandise was still in the warehouse. If it had been on the loading dock or on a truck, depending on whether the contract was FOB or Destination, then the insurable intrest would have transferred.

[spinfuzer]

Title – Passes based on what the contract says. If there is no agreement, it passes upon delivery.

Insurable Interest – Seller always has this if seller owns the goods. Buyer has this as soon as the seller identifies the goods in the contract.

Risk of Loss – Based off of shipping terms.

Who has Title? Pulse.

Who has Insurable Interest? Pulse and Star. (Both buyer and seller can have this at the same time)

Who has both title and insurable interest? Pulse.

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[Author]

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