XYZ Automobile was the authorized dealer and seller of motorcars of brand "Royals".With a view to boost the sales XYZ Automobiles sold a motorcar to Mr X on trial basis for a period of three days. It was agreed between the seller and the buyer that Mr. X could use the car for three days to check the performance. It was further agreed that if Mr X was not satisfied with the performance of the car, he could return it. The price of the car was negotiated and agreed. The car was delivered to Mr. X.Buyer used the car and sent the approval, however, the payment was to be made after one month (as per the agreement between the parties). Two days after the approval sent by the buyer, the car got destroyed in a fire accident at the place of Mr X. This was purely an accident and no negligence at the end of buyer could be proved.

The seller (XYZ Automobiles) demanded the final agreed price of the car from the buyer after the expiry of one month, stating that the loss had to be borne by the buyer. XYZ contended that the property in car was transferred from him to the buyer when he conveyed the acceptance of car after the trial period was over. Therefore, buyer became the owner of the car. Since the risk travelled with the ownership, the buyer must bear the loss. Buyer did not accept the arguments of the seller and matter reached to the court.

Questions

1. Who will bear the risk and why?

2. Will your decision change, if full price of the car was paid in advance to the seller? Why or why not?