A new florist placed a written order for $15,000 worth of fresh flowers and arranged delivery via a national service. The wholesaler required $5,000 in advance and the remaining $10,000 within 20 days after delivery. The flowers were damaged in transit due to temperature control failure, and the florist rejected the flowers. The wholesaler sued for the remaining $10,000; the florist countersued for the return of the $5,000. Should the florist recover $5,000?

• A. Grant the florist's claim for $5,000 and deny the wholesaler's claim for $10,000 because the risk of loss remained with the wholesaler.
• B. Grant the wholesalers's claim for $10,000 and deny the florist's claim for $5,000.
• C. Grant both claims.
• D. Deny both claims.

Answer: (A)

The key concept is who bears the risk of loss when a tender is nonconforming and the goods are damaged in transit. Under a shipment delivery, risk of loss generally shifts to the buyer when the goods are delivered to the carrier, but this can be overridden if the tender is nonconforming and the buyer properly rejects.

Here, the flowers were damaged in transit due to the carrier’s temperature-control failure, so the tender was nonconforming. The florist rightfully rejected the delivery. Because the goods never conformed and were not accepted, the seller remains responsible for the loss of those goods, and the buyer is entitled to recover payments already made for those nonconforming goods. The $5,000 advance payment should be returned. The remaining $10,000 isn’t due because there was no delivery of conforming goods and no acceptance to trigger the obligation to pay the balance.

So, the florist should recover $5,000, and the wholesaler cannot collect the $10,000.