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Organic Farms and Grocery, Inc: Terms of Contract, F.O.B. (Free on Board)

Scenario: Grocery, Inc., is a retail grocery store chain based in Any State, U.S.A. Grocery has stores throughout the United States. Grocery has written contracts with many different vendors to purchase the products they sell in their stores. Vendors range from individuals to international corporations. Tom Green works as the produce manager for the store in My Town, U.S.A. Jeff Fresh, 17 years old, is spending his summer vacation working for Tom in the produce department.

Using the scenario above, give detailed answers to the following questions:

1. Organic Farms shipped a truckload of peaches to Grocery using an independent trucker. In route, the truck broke down and the shipment was delayed three days. The peaches were spoiled when they arrived. The terms of the contract were F.O.B. Who bears the risk? Explain your answer.

2. Discuss the different warranties that apply to Grocery's business. Explain your answer in detail.

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1. Organic Farms shipped a truckload of peaches to Grocery using an independent trucker. In route, the truck broke down and the shipment was delayed three days. The peaches were spoiled when they arrived. The terms of the contract were F.O.B. Who bears the risk? Explain your answer.
You must think of the following: FOB means free on board. This means that the vendor is responsible only for loading the peaches in good condition on the trucks.
In short this means that the warranty will be borne by the trucker.
Remember that FOB is a trade term requiring the seller to deliver goods on board a vessel designated by the buyer. The seller fulfills his obligations to deliver when the goods have passed over the ship's rail.

When used in trade terms, the word "free" means the seller has an obligation to deliver goods to a named place for transfer to a carrier.

You must think of the following: Contracts involving international transportation often contain abbreviated trade terms that describe matters such as the time and place of delivery and payment, when the risk of loss shifts from the seller to the buyer, as well as who pays the costs of freight and insurance.

The most commonly known trade terms are Incoterms, which are published by the International Chamber of Commerce. These are often identical in form to domestic terms, such as the American Uniform Commercial Code, but have different meanings. As a result, parties to a contract must expressly indicate the governing law of their terms.

2. Discuss the different warranties that apply to Grocery's business. Explain your answer in detail.
The different warranties that apply to Groceries business include:
You must think of the following:A warranty is a two-part pledge to you. First, it promises that the merchandise sold is as represented. Second, it promises that you will receive repairs, a replacement, or a refund if it is not the quality or condition represented. A seller does not have to use formal words such as "warranty" or "guaranty," for a warranty to exist. There are two types of warranties: express and implied.
Express Warranty:
You must think of the following:Sellers create an express warranty when they make a promise, show a sample or model, or describe goods to you. The written warranties provided by some manufacturers are express warranties. Express warranties can be oral or written, but you should try to get all promises in writing for your protection.
Implied Warranty of Merchantability:
Under the implied warranty of merchantability, the merchandise must do what it was designed to do with reasonable safety, efficiency and ease, and for at least a reasonable period of time. For example, a toaster must toast, a TV set must have a picture and a clothes dryer should not overheat and catch fire when properly operated.
You must think of the following: ...

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