Risk of Loss. Harold Shook agreed with Graybar Electric Co to ...

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Risk of Loss. Harold Shook agreed with Graybar Electric Co to purchase three reels of burial cable for use in Shook's construction work. When the reels were delivered, each carton was marked burial cable, although two of the reels were in fact aerial cable. Shook accepted the conforming reel of cable and notified Graybar that he was rejecting the two reels of aerial cable. Because of a trucker's strike, Shook was unsuccessful in arranging for the return of the reels to Graybar. He stored the reels in a well-lighted space near a grocery store owner's dwelling, which was close to his work site. About four months later, he noticed that one of the reels had been stolen. On the following day he notified Graybar of the loss and, worried about the safety of the second reel, arranged to have it transported to a garage for storage. Before the second reel could be transferred, however, it was also stolen, and Shook notified Graybar of the second theft. Graybar sued Shook for the purchase price, claiming that Shook had agreed to return to Graybar the nonconforming reels and had failed to do so. Shook contended that he had agreed only to contact a trucking company to return the reels and that, because he had contacted three trucking firms to no avail (owing to the strike), his obligation had been fulfilled. Discuss who bears the risk of loss for the stolen reels.

Question 2

In Yim v. J's Fashion Accessories, Inc, where J's Fashion sued Yim for failing to pay for goods he bought under the name Ho Tae and Yim denied liability on the grounds that he had been acting as an agent for Hosung Enterprise, Inc which also did business under the name Ho Tae, the courts held that Yim was liable because:
 a. Yim unlawfully disclosed Hosung Enterprise, Inc. as the principal
  b. the duty to disclose the principal is on the third party and J's Fashion did not disclose Hosung Enterprise, Inc. as the principal
  c. Hosung Enterprise, Inc. was a limited liability company and so could not be held liable d. Yim made the contract without identifying Hosung Enterprise, Inc. as the agent
  e. none of the other choices are correct

[janieazgirl]

Answer to Question 1

Risk of loss
The court relied on UCC 2-501(1), which states, Where tender or delivery of goods so fails to conform to the contract as to give a right of rejection, the risk of their loss remains on the seller until cure or acceptance. The court held that Shook had formed no contract with Graybar to return the nonconforming goods, although Shook had attempted to facilitate the cable's return at the owner's request. Graybar, however, with full notice of the place of storage which was at the place of delivery did nothing but sleep on its rights for more than three months. Thus, Graybar had evidenced neither the promptness of action nor the good faith required by the UCC and accordingly suffers the loss.

Answer to Question 2

e