Which of the following factors would a court find most important in deciding who
ID: 2521548 • Letter: W
Question
Which of the following factors would a court find most important in deciding who bears the risk of loss between merchants when goods are destroyed during shipment? [Future accountants please note that this is a previous CPA exam question]
The agreement of the parties.
Whether the goods are perishable.
Who has title at the time of the loss.
A court would consider none of the above factors.
A.The agreement of the parties.
B.Whether the goods are perishable.
C.Who has title at the time of the loss.
D.A court would consider none of the above factors.
Explanation / Answer
A. The agreement of the parties.
The agreement generally provides who bears the risk of loss.
Loss may also be divided between the parties.
In case of absence of any terms regarding risk bearing, the same may be determined by terms of shipping.
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