risk of loss


Also found in: Legal, Wikipedia.

risk of loss

Responsibility for damage to improvements,typically after signing a contract for sale and before closing takes place.States that have adopted the Uniform Vendor and Purchaser Risk Act place the risk of loss on the seller. As a result, if the property is damaged before closing, the buyer may cancel the contract,recover all sums paid,and not have any liability,provided the buyer has not taken possession.Contracts may,of course,vary the terms of the uniform law,and not all states have adopted it.

References in periodicals archive ?
Coverage of mortgage by insurance against the risk of loss of income
A liability is recourse to the extent that a partner or a related person bears the economic risk of loss for that liability under Regs.
In this case, the risk of loss is not transferred from the seller to the buyer until the produce is delivered to the contract destination.
Although the second owner of the LLC, IO, does not bear direct risk of loss, the IRS argued it should be allocated part of the loan since it is a related party to Forsythe, who does bear the risk of loss.
Title transfer is a legal question and generally determines when risk of loss and control passes from the seller to the buyer.
The original framework assessed capital mainly in relation to credit risk (the risk of loss due to the failure of a counterparty to meet its obligations) and addressed other risks only implicity, effectively loading all regulatory capital requirements on measures of credit risk.
RAID-5 (striped parity): During a single disk failure, data is at risk of loss because there is no redundancy.
The net effect of the legislation is to pass the risk of loss after seven years to the building owner.
Under the program the New Hampshire HFA will take 50 percent of the risk of loss on the loan for the Mariner's Village project.
Other advantages include minimal additional business office effort, no risk of loss on Part B, and no Medicaid recovery of Part B revenue.
In either case, the IRS reasoned, the taxpayer would have the benefits and burdens of ownership, and the opportunity for gain and risk of loss on a sale to a third party.
A partnership liability is recourse to the extent that one or more partners (or a related person) bear the economic risk of loss for the liability.