Jentz 11e-IM-Ch21 - Chapter21 Title BusLawSeal.eps Creator...

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Chapter 21 Title, Risk, and Insurable Interest See Separate Lecture Outline System I NTRODUCTION Before the Uniform Commercial Code (UCC), title was a central concept in sales law.  The party who had title bore the risk of a loss of goods (and could thus buy insurance against it).  It was often difficult to determine when title passed from seller to buyer, however, and thus which party had title at the time of a loss.  The UCC divorced the question of title from the question of the rights and obligations of buyers, sellers, and others (subsequent purchasers, creditors).  Title remains relevant under the UCC in some situations, and the UCC has rules for locating title. In most situations, however, the UCC replaces the concept of title with other concepts: identification, risk of loss, and insurable interest. Generally, the UCC attempts to place a loss on a party who breaches a contract, the party who has physical control of the goods, or the party who is most likely to have thought of obtaining insurance. Of course, the rules do not apply if a different party caused the loss or if the parties allocated the risk in their contract. The last point is important: parties can agree on who will bear the risk of loss.  A DDITIONAL  R ESOURCES 147
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148           INSTRUCTOR’S MANUAL TO ACCOMPANY  BUSINESS LAW , ELEVENTH EDITION A UDIO  & V IDEO  S UPPLEMENTS The following  audio and video supplements  relate to topics discussed in this chapter— PowerPoint Slides To highlight some of this chapter’s key points, you might use the Lecture Review PowerPoint slides compiled for Chapter 21. Drama of the Law Video No. 5, entitled “Risk of Loss,” illustrates, in a real-world setting, the passage of risk of loss in a breached sales contract.  See the  Instructor’s Manual  for  The Drama of the Law,  pages 35-40 (Script) and pages 41-42 (Teaching Points of Law). C HAPTER  O UTLINE I. Identification Before an interest in goods can pass from seller to buyer, the goods must exist, and they must be iden ti- fied to the contract [UCC 2–105(2)].  For passage of title, goods must be identified in a way that will dis - tinguish them from all similar goods. Identification gives a buyer the right to obtain insurance on goods and the right to recover from third parties who damage goods. Sometimes, identification allows the buyer to take goods from the seller.
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