Question

On May 2, Lace Corp., an appliance wholesaler, offered to sell appliances worth $3,000 to Parco, Inc., a household appliances retailer. The offer was signed by Lace’s president, and provided that it would not be withdrawn before June 1. It also included the shipping terms: “FOB-Parco’s warehouse.” On May 29, Parco mailed an acceptance of Lace’s offer. Lace received the acceptance June 2.

Risk of loss for the appliances will pass to Parco when they are

	a.	Identified to the contract.
	b.	Shipped by Lace.
	c.	Tendered at Parco’s warehouse.
	d.	Accepted by Parco.

Answer 1

C. Tendered at Parco's warehouse.

In an FOB place of shipment contract, the buyer obtains the risk of loss once the goods are delivered to the carrier.