1. Check whether the parties have already dealt with the risk in the contract. If so, their agreement will control.
2. If not, ask whether either party has breached (can be any other part of the contract unrelated to delivery). If so, that breaching party bears the risk of loss.
- 3. If no breach, and the goods are being shipped, ask what type of delivery contract.
- ~ if shipment contract: risk of loss with buyer
- ~ if delivery contract: risk of loss with seller
- 4. If no breach, and for all other cases not involving goods via shipment, ask if seller is a merchant.
- ~ if yes, risk of loss with seller until buyer receives the goods
- ~ if no, risk of loss moves to the buyer when the seller tenders the goods.