(a) Except as otherwise provided in this section, the risk of loss as to a copy passes to the licensee on receipt of the copy. In an access contract, risk of loss as to the information to be accessed remains with the licensor if the resource is in the possession or control of the licensor, but risk of loss as to a copy of information made by the licensee passes to the licensee when it makes the copy.

(b) If a contract allows requires or authorizes a licensor to send a copy on a physical medium by carrier, the following rules apply:

(1) If the contract does not require delivery at a particular destination, the risk of loss passes to the licensee when the copy is delivered to the carrier even if the shipment is under reservation.

(2) If the contract requires delivery at a particular destination and the copy arrives there in the possession of the carrier, the risk of loss passes to the licensee when the copy is tendered at that destinationin a manner that enables the licensee to take delivery.

(3) If a tender of delivery of a copy or a shipping document fails to conform to the contract, the risk of loss remains on with the licensor until cure or acceptance.

(1) the licensee's receipt of a negotiable document of title covering the copy;

(2) acknowledgment by the third party to the licensee of the licensee's right to possession of or access to the copy; or

(3) the licensee's receipt of a record directing the third party to make delivery or authorizing the third party to allow access or of access codes enabling delivery or access.

Committee Action: Reviewed twice without substantive change.

Notes to this Section: Sentence in subsection (a) deleted as redundant.

1. Nature of the Issue. Risk of loss issues relate to copies of the information and eventually deal with the obligation to pay for or provide additional copies or additional access to obtain new copies of the information. This section uses a concept of transfer of possession or control as the general standard for when risk of loss is transferred to the other party. Unlike in the sale of goods, however, the issue may go in either or both directions as there are many transactions in which licensees provide information to licensors.

Under subsection (a), in an access contract, risk remains with the access provider or licensor as to the information that it controls and retains, but passes to the licensee as to copies made by the licensee on the making of that copy.

2. Transfer by Carrier. The rules in subsection (b) deal with shipment contracts and generally correspond to current Article 2.