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James contracts with Zeke to purchase 1,000 cotton tents from a lot that contains 10,000 tents made of cotton, nylon, felt, and polyester. If Zeke has separated the cotton tents from the rest, title and risk of loss:

A. Remain with Zeke
B. Have transferred to James when the tents were ordered
C. Have transferred to James when the contract was formed with Zeke
D. Cannot be determined by a court because no contract specifies when risk of loss transfers.

Answer :

Final answer:

The title and risk of loss were transferred to James when the contract with Zeke was formed, as per the default rules under the UCC, given that the goods were specifically identified to the contract. The correct answer is c.

Explanation:

The correct answer is c. Have transferred to James when the contract was formed with Zeke. In transactions involving goods, the Uniform Commercial Code (UCC) typically governs the transfer of title and risk of loss from the seller to the buyer. Given that the goods in question, in this case, 1000 cotton tents, were specifically identified in the contract between James and Zeke, the title and risk of loss were transferred to James upon the formation of the contract. It does not require the physical movement of the goods for this transfer to occur.

Therefore, unless the contract specifically states otherwise, the default rule under the UCC is that title and risk of loss transfer to the buyer once the contract is finalized and the goods are identified to the contract, which they were when Zeke separated them.

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