If legal title or possession has been transferred, who bears the risk of loss?

• A. The buyer
• B. The seller
• C. Both parties share the loss
• D. Risk of loss is determined by the contract terms and is not fixed

Answer: (A)

The key idea is that risk of loss in a sale of goods follows ownership and control of the goods. Under the UCC, once legal title or possession has transferred to the buyer, the buyer bears the risk of loss. This reflects that the buyer now owns and controls the goods, and the seller’s obligation has been discharged by delivery. The contract can alter this allocation if there are explicit terms, but absent such terms, transfer of title or possession shifts the risk to the buyer.