Okla. Stat. tit. 12A § 2-510

Current through Laws 2024, c. 453.

Section 2-510 - Effect of Breach on Risk of Loss

(1) Where a 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.

(2) Where the buyer rightfully revokes acceptance he may to the extent of any deficiency in his effective insurance coverage treat the risk of loss as having rested on the seller from the beginning.

(3) Where the buyer as to conforming goods already identified to the contract for sale repudiates or is otherwise in breach before risk of their loss has passed to him, the seller may to the extent of any deficiency in his effective insurance coverage treat the risk of loss as resting on the buyer for a commercially reasonable time.

Okla. Stat. tit. 12A, § 2-510

Laws 1961, p. 90, § 2-510.

Oklahoma Code Comment

(1) Previous Oklahoma law is in accord. The seller must ship conforming goods to pass title to the buyer. Bower-Venus Grain Co. v. Norman Milling & Grain Co., 86 Okl. 152, 207 P. 297 (1922); Hurley Gasoline Co. v. Johnson Oil Refining Co., 118 Okl. 26, 246 P. 438 (1926). The previous Oklahoma approach was that title passed conditionally upon delivery to the carrier, but with the right of rejection upon inspection. The Commercial Code provision is more direct, and avoids the difficult question as who has risk of loss when title is "conditionally" in the buyer. It is clear under the Commercial Code that risk of loss is on the seller.

(2) There has been no previous similar Oklahoma law. In some situations, the buyer may have received physical delivery of the goods, and may have put them to use before the defects are discovered. This is an acceptance under Section 2-607, which precludes the right of rejection, and therefore passes the risk of loss to the buyer. However, acceptance may be revoked under proper conditions by Section 2-608. When acceptance is thereby revoked, this paragraph permits the buyer to treat the risk of loss as having rested on the seller from the beginning, but only to the extent of deficiency of the buyer's effective insurance coverage. Since it is a divestment of risk from the beginning, the risk can be placed on the buyer even though the loss or damage occurs before discovery of the breach.

(3) There has been no previous similar Oklahoma law. This has importance in the seller of the feed situation given in the discussion of the preceding section. If risk of loss has remained on the seller, but the buyer fails or refused to take physical possession beyond a reasonable time, the seller may treat the risk of loss as resting on the buyer for a commercially reasonable time, but only to the extent of the deficiency of the seller's insurance.