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Posted: April 9th, 2022
Instructions
Have you ever bought something, paid for it, and arranged to have it delivered to you at a later date? That is a fairly typical transaction, and, under the Uniform Commercial Code (UCC), a delivery contract is created. However, it is a little complicated to determine when you become the complete owner of the thing purchased. First, when the contract is made and the purchase price is paid, the title to the item purchased is transferred to you, the purchaser. The UCC says that title is ownership, so you become the owner when the contract is signed and the purchase price is paid. However, only when the item purchased is actually delivered to you does the risk of loss pass to you. Why is that two-step process (i.e., [1] title is transferred to you when the purchase price is paid, and [2] then risk of loss is transferred to you when the good is delivered to the purchaser) necessary or helpful? Your journal entry must be at least 200 words in length. No references or citations are necessary.
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Instructions
Have you ever purchased something, paid for it, and then arranged for it to be delivered to you at a later time? That is a very normal transaction, and a delivery contract is made under the Uniform Commercial Code (UCC). However, determining when you become the sole owner of the item acquired is a little more tricky. First, when the contract is signed and the purchase price is paid, the title to the acquired object is passed to you, the buyer. According to the UCC, title equals ownership, thus when the contract is signed and the purchase price is paid, you become the owner. However, the risk of loss passes to you only when the purchased item is delivered to you. Why is this so?
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