Marthas Homes of Albuquerque contracted with ABC Supply in Portland to purchase 25 double-pane glass garage doors, F.O.B. Albuquerque. ABC Supply filled the order with 25 double-pane glass garage doors and placed them with a carrier. The doors were destroyed prior to reaching Albuquerque.

Required: (1) What law applies? Who has the risk of loss, Marthas or ABC Supply? Explain.

(2) Suppose that Martha's prepaid its order for the doors. Did Martha's have an insurable interest in the doors when they were shipped? Could it recover the price of the destroyed doors from its insurer?