Business law case analysis and principles

SCHOCK VS. RONDEROSS

This is a law case analysis based on determination of risk of loss of the buyer and seller. It uses only one reference.

This is a case of determining risk of loss under the heading of damage to or destruction of good. In this, the risk of loss is determined as who is to pay under a contract in the event that the goods have been subjected to damage. According to Article 2, Schock and Rondeross did not have shipment agreement except for the receipt that identified the goods as Schock's. In the absence of a shipment agreement the delivery place as well as the obligation for delivery does not lie in the hands of the seller. "Under the Revised Article 2, [2-612], the risk of loss passes to the buyer once the receipt is in the hands of the buyer."

Furthermore, under the heading of damage to or destruction of goods, once the buyer identified the goods, the damage or its destruction is passed onto the buyer. If the goods were damaged or destroyed without the fault of either party before the risk of loss agreement has passed then the contract is avoided. However in the case of Schock vs. Rondeross, the goods were identified after the risk of loss were passed to the buyers. Hence, Schock does not have any claim to the damages except to bear them. But, here the buyer kept the goods at the seller's place so with the understanding that he would claim it after one week. When the wind destroyed his mobile house, it was in the possession of the "third party." But, since there was no FOB agreement between the parties, Rondeross will win the case based on the fact that there was no agreement of shipment or taking care of the mobile home.