A Contract Between Pacific Import Company in Seattle and Atlantic

question 37

Essay

A contract between Pacific Import Company in Seattle and Atlantic Coast Retail Corporation in Baltimore does not expressly state which party bears the risk of loss but says only that Pacific Import is "to ship goods at the seller's expense." At what point does the risk of loss of the goods pass from the seller to the buyer

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Definitions:

Price Ceiling

A legal maximum price that can be charged for a good or service, above which it cannot be sold.

Excess Demand

A situation in a market where the quantity demanded of a good or service exceeds the quantity supplied at the current price.

Price Floor

A government or regulatory minimum price set above the equilibrium price, preventing the market price from falling below it.

Equilibrium Price

The market price at which the quantity of a good or service supplied is equal to the quantity demanded.