Legal Question in Construction Law in California

Re: stoeln property

This is what is classified as a risk of loss issue and is usually determined by the contractual language.

Risk of loss in the absence of breach by either party is governed by contract rather than by the use of title passage or property passage [see Cal. Code Comment and UCC Comment to Com. Code � 2509]. Unless the parties agree otherwise, Com. Code � 2509 provides the rules to be applied to the issue of risk of loss depending on the type of delivery anticipated by the contract.

In any case in which the contract does not require or authorize the seller to ship the goods by carrier or in which the goods are not held by a bailee to be delivered without being moved (your situation), the risk of loss passes to the buyer on receipt of the goods if the seller is a merchant; otherwise, the risk passes to the buyer on tender of delivery [Com. Code � 2509(3)].

First check the contract for risk of loss or other similar language to see if it is covered. You may be liable for the stolen goods under the risk of loss theory under Com. Code Sec 2509(3) because he delivered the goods to the address. However, you would argue that he did not deliver the goods because the contract calls for the goods to be installed and they were not installed so that delivery occurs when the goods are installed. You would argue that because title to the goods never passed to you because the subcontractor did not install the goods, the risk of loss remains with him and you are not liable. You would also argue that he was negligent in his supervision of the goods so that in any event even if title did pass , which it did not you would argue, there is an offset for his 100% negligence in supervising the goods so that you are not liable.

I recommend that you do not make any admissions that you are liable and wait it out to see what he does. I suggest that you send a letter indicating that he is responsible to install the goods under the contract and you expect them to be installed within a reasonable time (I do not know what is reasonable in this situation without more facts)or you will have them installed by others and he will be liable. However, caution is in order when writing the letter because this will certainly create tension and you do not want him to abandon the job and leave you hanging trying to find a replacement for the entire job.

Thank you for your question.

Re: stoeln property

The issue here is commonly called "risk of loss." Many times a loss occurs (physical damage, theft, etc.) and it is unclear which party should bear the loss. Some contracts specify when the risk of loss passes from one party to another (when the item is shipped?, when it is delivered?, when it is installed?). Check your contract to see if it is addressed there. If not, the law has certain rules which kick in but it is usually NOT a black-and-white issue. The good news is that you're in a better position.

He has failed to install the item. Tell him, in writing, that he has X days to get it done. Tell him that you'll hire another sub to install the item if he can't do it.

Lastly (and perhaps most importantly), there may be a policy of insurance which will cover the loss. Hopefully you had a police report prepared. Next, notify the insurance for the owner, for yourself, and for the sub.