What does "risk of loss" refer to in UCC transactions?

In the context of UCC (Uniform Commercial Code) transactions, "risk of loss" refers specifically to the responsibility for loss or damage to goods during transportation before delivery to the buyer. This concept is critical because it determines who bears the financial burden in the event that goods are damaged or lost before they reach the buyer.

Under the UCC, the risk of loss may shift between the seller and the buyer based on the terms of the sale, such as whether the goods are shipped or picked up, and whether certain delivery terms, like FOB (free on board), are involved. The seller retains the risk of loss until the goods are delivered to the buyer or leave the seller's possession under the specified terms. Once the risk of loss shifts to the buyer, they assume responsibility for any loss or damage that occurs during shipment.

The other options do not accurately capture the legal meaning of "risk of loss" within the scope of UCC transactions. They discuss aspects related to sales or delivery, but they do not encompass the specific financial responsibility for damage or loss that occurs during transit.