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Part
5
PERFORMANCE
Insurable
Interest in Goods; Manner of Identification of Goods
31.1
The buyer obtains a special property interest and an insurable interest
in goods by identification of existing goods as goods to which the contract
refers, even though the goods so identified do not conform to the contract,
and he has the right to reject them. Such identification can be
made in any manner explicitly agreed to by the parties. In the
absence of explicit agreement, identification occurs-
a.
when the contract is made if it is for the sale of goods already existing
and identified;
b.
if the contract is for the sale of future goods other than those described
in paragraph c., when goods are shipped, marked, or otherwise designated
by the seller as goods to which the contract refers;
c.
when the crops are planted or the young animals.
31.2
The seller also retains an insurable interest in goods as long as title
to or any security interest in the goods remains in him. Where
the seller along identifies the goods, he may substitute other goods
for those identified, but he may do so only until a default under the
contract or insolvency or his notifying the buyer that his identification
of goods is final.
Buyer’s
Right to Goods on Seller’s Insolvency
32.
Even though the goods have not been shipped, a buyer who has paid part
or all of the price for goods in which he has a special property interest
may, by tendering any unpaid portion of their price, recover them from
the seller if the seller becomes insolvent within ten days after receiving
the first installment on their price.
Seller’s
Delivery of Goods
33.1
Tender of delivery requires that the seller hold conforming goods at
the buyer’s disposition and give the buyer notice reasonably necessary
to enable him to take delivery.
33.2
Where the seller is to send to goods to the buyer, tender requires that
the seller comply with the provisions of Section 34.
Shipment
by Seller
34.
Where the seller is required or authorized to send the goods to the
buyer and the contract does not specify a particular destination, then
unless otherwise agreed he must
a.
put the goods in the possession of a carrier and enter into a contract
for their transportation that is reasonable under the circumstances;
and
b.
promptly tender any document necessary to enable the buyer to obtain
possession of the goods; and
c.
promptly notify the buyer of the shipment.
The
seller’s failure to notify the buyer under paragraph c., or to make
a proper contract under paragraph a., is a ground for the buyer to reject
the goods only if the failure causes material delay or loss.
Effect
of Seller’s Tender; Delivery on Condition
35.1
The seller’s tender of delivery is a condition to the buyer’s duty to
accept the goods and pay for them.
35.2
Where payment is due upon delivery to the buyer of goods or documents
of title, the buyer’s right to retain or dispose of the goods is conditional
upon making the payment due.
Cure
by Seller of Improper Tender or Delivery; Replacement
36.1
Where any tender or delivery by the seller is rejected because non conforming
and the time for performance has not yet expired, the seller may promptly
notify the buyer of his intention to cure and may then within
the contract time make a conforming delivery.
36.2
When the buyer rejects a non conforming tender which the seller had
reasonable grounds to believe would be acceptable , the seller
may promptly notify the buyer and have a further reasonable time to
substitute a conforming tender.
Risk
of Loss in the Absence of Breach
37.1
Where the contract authorized the seller to ship the goods by carrier-
a.
if it does not require him to deliver them at a particular destination,
the risk of loss passes to the buyer when the goods are delivered to
the carrier; but
b.
if it does require him to deliver them at a particular destination,
the risk of loss passes to the buyer when the good are tendered so as
to enable the buyer to take delivery.
37.2
Where the goods are held by a bailee to be delivered without being physically
moved, the risk of loss passes to the buyer.
a.
When he received a negotiable or non-negotiable document of title covering
the goods ; or
b.
when the bailee acknowledge the buyer’s right to the goods.
37.3
In any case not within subsection 1 or 2, the risk of loss passes to
the buyer when he received the goods if the seller is a merchant; otherwise
the risk passes to the buyer on tender or delivery.
37.4
The provision of These section are subject to any contrary agreement
by the parties and to the provisions of Section 38 on the effect of
breach on risk of loss.
Effect
of Breach on Risk of Loss
38.1
Where a tender or delivery of goods so fails to conform to the contract
as to give the buyer the right to reject them, the risk of loss remains
on the seller until cure or acceptance.
38.2
Where the buyer rightfully revokes acceptance, he has the right to treat
the risk of loss as having rested on the seller from the beginning.
38.3
Where the buyer as to conforming goods already identified to the contract
repudiates the contract, or otherwise breaches the contract before risk
of their loss has passed to him, the seller has the right to treat the
risk of loss as resting on the buyer for a commercially reasonable time.
Tender
of Payment by Buyer
39.
Unless otherwise agreed, the buyer’s tender of payment is a condition
to the seller’s duty to tender and complete delivery of the goods.
Buyer’s
Right to Inspection of Goods
40.1
Unless otherwise agreed, the buyer has a right before payment or acceptance
to inspect the goods in any reasonable manner. When the seller
sends the goods to the buyer, the inspection may be after their arrival.
40.2
Unless otherwise agreed, the expenses of inspecting the good must be
borne by the buyer but may be recovered from the seller if the goods
do not conform and are rejected.
Preserving
Evidence of Goods in Dispute
41.
In order to resolve any dispute, either party on reasonable notification
to the other has the right to inspect and test the goods, even though
the goods may be under the control of the other party.
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