Shipment Contract Lawyers
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What Is a Shipment Contract?
A shipment contract is part of a sale of goods transaction that is governed by the Uniform Commercial Code (UCC). When a shipment contract is used between a buyer and seller, then the buyer bears the risk for any loss or damage that occurs during the shipment of the goods. The seller of the goods is only liable up until the moment that the goods are delivered to a common carrier.
A shipment contract is distinct from a destination contract. In a destination contract, the seller of goods is liable for any loss or damages up until the moment when the goods actually arrive at the buyer’s destination.
How to Spot a Shipment Contract?
The following clauses may help spot shipment contracts:
- FOB [place of shipment / seller’s location] – Here, the place from which the goods should be shipped is stated at the end of "free on board" clause. Therefore, if the seller is in the City of Oakland and the buyer is in San Francisco, and the clause reads as "FOB Oakland Railroad Station"—this is a shipment contract. In this example, the seller is only required to tender the goods to the common carrier at the Oakland Railroad Station. At that point, the seller has no further obligation for the risk of loss.
- FAS [name of the port] – This means "free alongside ship," which is followed by the name of the port from which the goods are shipped to the buyer.
- CIF or CF – A shipment contract may include "cost, insurance, and freight" or "cost and freight" terms. This means that the price the buyer pays for the goods includes the costs of insurance and shipping (CIF) or the costs of shipping only (CF).
Seeking Legal Help
If you are a party to a shipment contract, you may need specialized advice concerning your delivery obligations and the risk of loss. A qualified UCC lawyer can help you negotiate, draft, and review your shipment contracts. If a contract has been breached, an attorney can help you obtain the appropriate legal remedies.
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Last Modified: 08-24-2016 10:16 PM PDT
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