ContractsIntermediateAlaska Exam

Under the Alaska Uniform Vendor and Purchaser Risk Act, if a property is materially damaged after the purchase agreement is signed but before closing, the risk of loss falls on:

AThe buyer, because equitable title transferred at contract signing
BThe seller, because legal title has not yet passedCorrect
CThe party who holds the homeowner's insurance at the time of loss
DBoth parties equally, split 50/50

Why The seller, because legal title has not yet passed Is Correct

Answer B: The seller, because legal title has not yet passed

Under Alaska's Uniform Vendor and Purchaser Risk Act, the risk of loss remains with the seller until legal title or possession transfers to the buyer, whichever occurs first. If the property is materially damaged before closing, the seller bears the risk and the buyer may rescind the contract.

Exam Tip: Contracts

Contract questions frequently test the essential elements required for a valid contract. Remember: competent parties, mutual consent, lawful object, and sufficient consideration. Watch for void vs. voidable distinctions.

Key Contracts Terms in This Question

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