Canadian Hospitality Law Practice Exam

In a cash on delivery contract, the seller retains both the title and risk until the goods are delivered to the buyer. This arrangement typically means that even though the seller has dispatched the goods, full ownership and the associated risks—such as damage or loss during transit—remain with the seller until the buyer actually receives the goods and pays for them.

In this context, "title" refers to legal ownership of the goods, which does not transfer to the buyer until they have been delivered and payment has been made. The seller assumes the responsibility for the goods during transit, which includes any liability for loss or damage that might occur before delivery is completed. Once the buyer receives the goods and payment is made, title and risk then shift to the buyer, completing the transaction.

The other options such as the buyer, carrier, or consignor do not hold title or risk in this specific contractual arrangement until the goods are delivered and the payment is rendered, reinforcing the seller's primary role in managing the goods until that point.