Risk of Loss in a Contract of Sale

Introduction
When a contract of sale is made, the risk of loss of goods is an important consideration. The risk of loss refers to the possibility that the goods may be damaged or destroyed before they are delivered to the buyer. This risk may arise while the goods are still in the possession of the seller or during their transportation to the buyer. The allocation of this risk between the parties to the contract can have significant legal and financial consequences.

Buyer's Obligation to Pay
In a contract of sale, the buyer is generally obligated to pay for the goods before they are delivered. However, the obligation to pay does not necessarily mean that the buyer bears the risk of loss. The risk of loss may be allocated differently depending on the terms of the contract and the applicable law.

Risk of Loss Before Delivery
If the goods are damaged or destroyed before delivery, the question arises as to who bears the risk of loss. Generally, the risk of loss is borne by the party who has legal title to the goods at the time of the loss. However, if the contract provides otherwise, the risk of loss may be allocated differently.

Goods Lying with the Seller
If the goods are lying with the seller and have not yet been delivered to the buyer, the risk of loss generally remains with the seller. This is because legal title to the goods has not yet passed to the buyer. Therefore, if the goods are damaged or destroyed while still in the seller's possession, the seller bears the risk of loss.

Buyer's Obligation to Insure
While the risk of loss may be allocated differently in different contracts, it is generally advisable for the buyer to insure the goods against loss or damage during transportation. This can help to protect the buyer's financial interests in case of loss or damage to the goods.

Conclusion
In a contract of sale where goods are lying with the seller, the risk of loss of goods will be borne by the buyer only if the contract specifically provides for this allocation of risk. Otherwise, the risk of loss remains with the seller until the goods are delivered to the buyer.