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The general rule is that the buyer bears the transit risk, because the seller will be at a distance from the damaged goods and the buyer will be in a better position to access the damage and issue a claim against the shipper (Grewal, 1991).
The UCC’s provisions are more detailed than the Convention’s when dealing with loss of goods during transit: § 2-510 states “Where […] delivery of goods so fails to conform to contract as to give a right of rejection, the risk of loss remains of the seller until cure or acceptance.” UCC § 2-509 and § 2-510 focus less on “property” concerns (who owns what when) and more on sales contracts themselves; it still presumes that the risk falls onto the buyer — when there has not been a breach by the seller (such as knowing selling damaged items) — due to the buyer’s proximity to the damaged goods, unless the sales contract between buyer and seller specifically designate the seller as responsible for damages occurred in transit.
Although we cite the UCC), it is interesting to note that Article 68 of the U. Convention addresses the issue of who bears the risk of loss of goods during transit in a simple point-to-point sale.
The introduction of the widespread use of shipping containers and the “daisy chain” of shippers and handlers between seller and buyer introduce complications the Convention did not offer any firm guidance about, however, leaving it a grey area.
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The method of delivery determines, to a great degree, when ownership of goods occurs. (Pace Law School Institute of International Commercial Law). Risk of Loss (Originally published in Published in Galston & Smit ed., , Matthew Bender (1984), Ch.
A shipment contract requires the seller to relinquish the goods to a middle-man carrier or shipper, and the ownership of those goods falls on the buyer at the point where they are shipped. Determining Which Party Bears Risk of Loss for Shipments Governed by the Uniform Commercial Code.
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