LinkedIn Series Chapter 3: Delivery and Risk of Loss

December 9, 2013
Jack Walsh

This one is obvious if you think about it. Unless your customer picks up your products at your location (think retail store) or you deliver your product in a company truck (think furniture store), delivery could occur when the seller hands the product off to the carrier or when the carrier delivers the product to the buyer. Seller's forms always specify that delivery occurs when they hand off the goods to the carrier. Buyer's forms always say delivery occurs upon receipt from the carrier. Why? Primarily risk of loss. Before delivery, the risk of damage or loss belongs to the seller. After delivery, the risk of loss belongs to the buyer. Use of a carrier creates a no man’s land in which to fight. Looking back to the last article, acceptance looks more important. If buyer accepts seller's offer, the chance that buyer's Standard Terms and Conditions apply is much higher. The converse is true if seller accepts buyer's offer. Winning the terms and conditions fight now makes a difference if the product is damaged in shipment. This term has a middle ground (not all do); the parties can insure the shipment, passing the risk in whole or part to a third party, the insurer. Of course, there is a catch; someone has to pay for the insurance.