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 instalment 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. The convention centre did not know about the chairs being ready for pick up, as Bob, the person who ordinarily makes such phone calls, had been away from work due to an illness. The convention centre was aghast at hearing about the fire and even more surprized when Ace demanded payment in full for the chairs from the convention centre. The convention centre refused to pay the balance and even asked for a refund of the first instalment it had paid.

A. Whose loss are the chairs?

B. Which Rule applies?

C. Explain your answer in A and B above.

D. Render a decision. Would the loss be split half and half?State if the convention centre has to pay the balance of the purchase price and or if the convention centre can obtain a refund for the amount it has already paid?