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Risk of Loss: UCC

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Jenkins agreed to purchase goods from Smith, F.O.B. Smith's plant. The goods in Smith's plant are separated and stenciled with Jenkins' name. Jenkins then telephones Smith and repudiates. The goods are subsequently destroyed by fire. Assume that Smith had no insurance on the goods. If Smith sues Jenkins for the purchase price, what result? Use UCC provisions to support your answer/analysis. Cite the specific sections of the UCC that support your argument.

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Solution Summary

The risk of destruction by fire under the Uniform Commercial Code is explained in a structured manner in this response. The answer includes references used.

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Smith can recover the entire amount. Jenkins agreed to purchase goods from Smith FOB Smith's plant. The goods in Smith's plant are separated and stenciled with Jenkin's name. Jenkins then telephones Smith and repudiates. After the stenciling and separating, the goods are destroyed by fire. Since, Smith had no insurance on the goods but the ownership of the goods has passed on to Jenkins before the fire, if Smith sues, he will get full payment ...

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