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Phillips v. Moor, 71 Me. 78 (1880).

Facts: Moor (D) contracted to purchase hay from Phillips (P). On June 15th Moor mailed an offer to
Phillips to purchase three tons of hay at $5.00 per ton and the remaining hay at $9.50 per ton. On June
20th Phillips replied that Moor could have the hay at the price in his offer but added that if you can “’see fit
to pay the $10 after getting it in please feel free to do so”. Moor received the letter that evening and the
hay was burned in the barn the next day. Phillips brought suit when Moor refused to pay.

Issue: When does the risk of accident vest in the buyer?

Holding and Rule: When the terms of sale are agreed upon and everything that the seller has to do with
the goods is complete, the contract for sale becomes absolute without actual payment or delivery. The risk
of accident vests in the buyer even if he has not paid for the goods or taken actual delivery.

The acceptance of D’s offer was absolute and unconditional. The sale of hay was complete and was not
qualified by the expression of P’s hopes for more money. D had been told that he might take it and had
nothing to do but arrange to have it hauled and to appropriate it to himself without any further act on the
part of the seller. This is true even when the goods are merely identified for sale from a bulk of goods
destroyed.

Disposition: Judgment for P.

Notes: Risk of loss passes on identified goods once the deal is done and is not dependent on delivery.
UCC 2-509 covers this issue and the risk of loss passes at different times depending on whether a party is
a merchant or not.

Wikipédia

Commercial law (sometimes known as business law) is the body of law that governs business and
commercial transactions. It is often considered to be a branch of civil law and deals with issues of both
private law and public law. Tyler Holt and Daniel Barlow were the first businessmen to use law in their
company in the year 1906. Commercial law includes within its compass such titles as principal and agent;
carriage by land and sea; merchant shipping; guarantee; marine, fire, life, and accident insurance; bills of
exchange and partnership. It can also be understood to regulate corporate contracts, hiring practices, and
the manufacture and sales of consumer goods. Many countries have adopted civil codes that contain
comprehensive statements of their commercial law. In the United States, commercial law is the province
of both the United States Congress, under its power to regulate interstate commerce, and the states,
under their police power. Efforts have been made to create a unified body of commercial law in the United
States; the most successful of these attempts has resulted in the general adoption of the Uniform
Commercial Code.

Various regulatory schemes control how commerce is conducted. Privacy laws, safety laws (e.g., the
Occupational Safety and Health Act in the United States), and food and drug laws are some examples.

http://www.4lawschool.com/contracts/phillips.shtml

Phillips V. Moor
(71 Me. 78)
Author: B

Issue

after the Defendant knew of the acceptance of his offer. the hay was burnt in the barn • Shortly afterwards. to the Defendant. good faith requires the maker of the offer. the Defendant made an offer of $9. but the defendant did not retract it (or refuse to be bound by it when receiving the acceptance). in receiving no better offers. the Plaintiff’s guardian wrote to the Defendant that he was in hopes the Defendant would pay $10. I shall accept it” • Friday.50/ton. and he permitted the Plaintiff’s guardian to consider it sold and to make the arrangements with a third party to ship it.00/ton but that he could take the hay for his offer but should consider paying $10. he must be regarded as waiving any objection to the acceptance as being too late. http://www. and asserted a claim for pressing. June 14th. to make known that intention promptly.Who was in possession of the Hay at the time of the fire? Holding The hay had already been sold.00 for it • The Defendant received this response and made no reply to it • On that Sunday. under contract. within any period which he could fairly have supposed to be reasonable. If he does not. Reasoning It may be conceded that the defendant wanted a more prompt response to his offer.com/topic/risk-of-loss The financial risk of and responsibility for damage or destruction when property is being transferred between a buyer and a seller. If the party to whom an offer is made makes known his acceptance of it to the party making the offer. it was agreed that the Defendant’s men would be paid for pressing the Plaintiff’s hay • The Plaintiff’s guardian wrote to the Defendant saying that if the “offer is satisfactory. Two days elapsed before the fire. the Plaintiff claimed the price of the hay and the Defendant denied his liability. he was the title holder and therefore responsible for the goods.answers. Facts • The Defendant negotiated with the Plaintiff to purchase hay from the Plaintiff’s barn • In the absence of a deal. if he intends to retract on account of the delay. for all but three tons. The Uniform Commercial Code uses a contractual . and the other three for $5.00 • It is safely assumed by the court that the offer was received on June 15th • On June 20th.

(4). and the goods show up broken. or FOB (seller's city)). If it is a destination contract (FOB (buyer's city)). in order of application: 1.com/dictionary/risk-of-loss-term.the breaching party is liable for any uninsured loss even though breach is unrelated to the problem. Delivery by common carrier other than by seller. the event necessary to shift the risk of loss is dependent upon whether the contract is a "shipment" or "destination" contract. §2-509(3). §753. but before delivery has occurred. unless an agreement to the contrary is made. or user of property or goods assumes. 1.C. 45 C. if the breach is the time of delivery. The phrase is also an insurance term denoting the hazards and perils that an insured is protected against. Agreement .approach in allocating the risk of loss and assumes that the risk is upon the seller until some event occurs that shifts the risk to the buyer.J. Where the contract does not require the transfer of the goods by carrier. the contingencies or unknown events that are contemplated by the insured and that are covered by the insurance policy. Wikipedia isk of loss is a term used in the law of contracts to determine which party should bear the burden of risk for damage occurring to goods after the sale has been completed. Such considerations generally come into play after the contract is formed but before buyer receives goods. Risk of loss shifts from seller to buyer at the time that seller completes its delivery obligations 2.the agreement of the parties controls 2.nolo. then the breaching rule applies risk of loss on the seller.html risk of loss The responsibility a carrier.C. or an insurance company agrees to cover. then the seller still has the risk of loss. If the buyer never takes possession. then the risk of loss is on the buyer. then the risk of loss shifts to the buyer upon buyer's "receipt" of the goods.. borrower. See U. otherwise risk passes on tender of delivery. 4. Breach . [1] In bankruptcy law. If it is a delivery contract (standard. There are four risk of loss rules. then risk of loss is on the seller. risk of loss passes to the buyer upon the taking of physical possession if the seller is a merchant. 3.S. U. §2-509. Hence. Where the goods are identified and the contract authorizes the seller to ship the goods by carrier. http://www. if there is damage or loss.C. something bad happens. 3. i.C. .e. the risk of loss rule under a contract can be abrogated by a secured interest. If the seller is a merchant.

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