Question
a) Ace Manufacturing Ltd agreed to manufacture and sell 5000 chairs to a convention centre. The contract contained detailed specifications for the chairs, and provided
a) Ace Manufacturing Ltd agreed to manufacture and sell 5000 chairs to a convention centre. The contract contained detailed specifications for the chairs, and provided that the purchase price of $200 000 would be paid in two equal instalments: one half when the contract was signed and one half when the convention centre was notified that the chairs were ready to be picked up. The contract said nothing about when ownership of the chairs would transfer to the buyer. The convention centre paid the first installment when the contract was signed. The chairs were manufactured by Ace and were in Ace's warehouse when a serious fire destroyed the warehouse and all the chairs. Ace had not yet notified the convention centre that the chairs were ready for pick up, because the person who ordinarily makes such phone calls had been away from work due to an illness. Ace has demanded payment in full for the chairs from the convention centre. The convention centre has refused to pay the balance and has asked for a refund of the first installment it paid.
Applying the relevant and correct principle(s) of law discussed in the sales of goods contract, discuss whether title to the chairs has passed from Ace to convention centre and who bears the risk in the given situation. Answers must be supported with valid principles of law and explanation.
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