You will be given 2 contracts with questions to be answered for each contract.

The first clause I will discuss from the risk of loss section of the contract.

According to the text book, “Under the UCC, the question of who suffers a financial loss

if goods are damaged, destroyed, or lost is not necessarily determined by title. Who

bears the risk of loss can be determined by the parties in their contract. Who suffers the

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loss may also depend on whether the sales or lease contract has been breached at the

time of loss.” (Chapter 19-2 Risk of Loss). The most significant step for business is

making sure a contract includes the allocation of a liability and responsibility for

damaged, lost, stolen, or destroyed goods. Managing the risk of loss in the contract is

the most important step in commercial transaction because it determines the liability of

a carrier to compensate if there is a damage or loss. For example, when a buyer

demands a certain type of goods if the goods was damaged in shipping, the buyer

should not bear the risk of damage does not pass to the buyer until the goods is

delivered to the buyer. This clause the seller is bearing the entire responsibility for lost

or damaged goods during transportation. Most businesses have this clause to cover all

possible types of damages such as loss, destruction, or stolen.

The second clause is the right of inspection, this clause gives the buyer the right

to inspect the goods after arrival within a short period. According to the text book,

“Unless otherwise agreed, or for collect-on-delivery goods, the buyer or lessee has an

absolute right to inspect the goods before making payment. This right allows the buyer

or lessee to verify, before making payment, that the goods tendered or delivered

conform to the contract.” (chapter 20-2b Right of Inspection). In this clause the buyer

has the chance to examine the goods to determine if they conform to the contract or not

before payment. The buyer must inspect the goods within a short period of time. For

example, when goods are delivered to the buyer, the buyer is allowed to check the

goods and he is not obligated to pay if it’s not conform to specifications of the goods in

the contract.

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The third clause is the revocation of acceptance clause, in this clause the buyer

may withdraw his offer after it has been agreed. So, after the buyer has accepted the

goods, the buyer is allowed to refuse the acceptance if he discovers nonconformity in

the goods. According to text book, “After a buyer or lessee accepts a lot or a

commercial unit, any return of the goods must be by revocation of acceptance.”

(Chapter 20-2c Revocation of Acceptance). This clause gives the buyer the right to

revoke and refuse the delivered goods even though it has already accepted. In this case

the buyer must notify the seller that he is revoking his acceptance within a reasonable

period of time after finding the nonconformity explaining the reason of revocation of

acceptance in detail. For example, when a buyer ordered a certain type of goods, the

buyer accepts the goods. The buyer inspects the delivered goods and discovers that it

contains different descriptions. The buyer can take back his acceptance because the

goods are nonconforming.