Contracts and Sales Multistate Bar 2025 – 400 Free Practice Questions to Pass the Exam

When goods are destroyed before the risk of loss has passed to the buyer, the correct outcome is that the contract is avoided if the goods were specifically identified in the contract. This principle is rooted in the Uniform Commercial Code (UCC), which governs sales of goods in the United States.

Under the UCC, risk of loss typically transfers from the seller to the buyer at a predetermined point in the sales process, often related to delivery terms or acceptance of the goods. If the goods are destroyed before this point, the seller bears the risk, and since the specific goods set forth in the contract no longer exist, the contract cannot be fulfilled as originally intended.

Therefore, the buyer is not obligated to pay for the destroyed goods, since they were never at risk of loss. This ensures fairness in the transaction, as the buyer should not suffer a financial loss for goods that were not delivered in an identifiable and usable state. Additionally, the disappearance of the goods means that there is no subject matter that can be transferred to the buyer, effectively voiding the contract as it pertains to those specific items.

In contrast, other options imply different obligations or responsibilities that do not align with the principles of risk of loss under the UCC.