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On October 10, Vivetone Electronics (hereafter Vivetone) contracted with Baseline Audio Corp. (hereafter Baseline) to sell Baseline 200 Model 301...
On October 10, Vivetone Electronics (hereafter Vivetone) contracted with Baseline Audio Corp. (hereafter Baseline) to sell Baseline 200 Model 301 stereo speakers. The contract was provided that the speakers would be shipped F.O.B. Vivetone's loading dock. The contract was silent as to when risk of loss for the speakers would pass to Baseline. Delivery was to be completed by November 10.
On October 18, Vivetone identified the speakers to be shipped to Baseline and moved them to the loading dock. Before the carrier picked up the goods, a fire on Vivetone's loading dock destroyed 50 of the Model 301 speakers. On October 20 Vivetone shipped, by common carrier (Doright Delivery Co.) the remaining 150 Model 301 speakers and 50 Model 201 speakers. The Doright Delivery truck carrying the speakers was involved in an accident resulting in damage to 25 of the Model 201 speakers. Baseline received the 200 speakers on October 25 and on October 27 notified Vivetone that 100 of the Model 301 speakers were being accepted but the rest of the shipment was rejected. Baseline also informed Vivetone that, due to Vivetone's failure to comply with the terms of the contract, Baseline would contest paying the contract price and would sue for damages. Vivetone requested that Baseline ship back the rejected speakers.
a. Who bears the risk of loss in respect to the 50 Model 301 speakers destroyed on the loading dock? Explain.
b. Who bears the risk of loss in respect to the 24 speakers damaged in the truck accident? Who had an insurable interest in the goods? Explain.
c. Does Baseline have the right to reject part of the shipment? Explain.
d. Does Vivetone have a right to cure in the above circumstances? Explain.
e. Assuming Vivetone does not cure, to what remedy, if any, is Baseline entitled?
