Tom is the owner of a specialty motor parts shop in New York, New York. Pete, a resident of Newark, Delaware, has a specialty car and is looking to purchase a muffler. Pete gives Tom a call and informs him that he has a 1969 Cadillac Eldorado and is searching for a silver exhaust for it. Tom suggests a $600 muffler and even provides installation for an extra $50. Pete is interested in the muffler but rejects Tom's offer to install. Pete's address in Newark, Delaware will receive the muffler by May 1, 2015, according to the contract that Tom and Pete draft.

1. identify reasons why Tom should assume the loss-related risk.

2. identify reasons why Pete should assume the loss-related risk.