Legal Definitions - attachment of risk

Attachment of Risk refers to the precise moment in a sales transaction when the responsibility for potential damage, loss, or destruction of purchased goods shifts from the seller to the buyer. Before this point, the seller bears the financial burden if something happens to the goods; after this point, the buyer assumes that responsibility. This concept is critical because it determines who must absorb the cost if goods are lost or damaged before they are fully in the buyer's possession or control.

Here are some examples illustrating the attachment of risk:

• Online Retail Purchase: Imagine a customer orders a new smartphone from an online electronics store. The store ships the phone via a common carrier. The sales contract might specify that the risk of loss transfers to the buyer once the seller delivers the phone to the shipping carrier (often referred to as "FOB shipping point").

  Illustration: If the smartphone is lost or damaged while in transit with the shipping carrier, the "attachment of risk" occurred when the seller handed the package to the carrier. Therefore, the buyer would typically bear the loss and would need to pursue a claim with the shipping company or their own insurance, rather than demanding a replacement from the seller.

• In-Store Pickup of Custom Goods: A customer commissions a local artisan to build a custom piece of furniture. The agreement states that the customer will pick up the finished item from the artisan's workshop.

  Illustration: The "attachment of risk" for the furniture typically occurs when the customer takes physical possession of it at the workshop. If the furniture is accidentally damaged in the workshop *before* the customer arrives for pickup, the artisan (seller) is responsible for the damage. However, once the customer loads the furniture into their vehicle and drives away, the risk has attached to the buyer. If it then gets damaged on the way home, the customer (buyer) bears the loss.

• Large Commercial Shipment with Delivery Terms: A manufacturing company in Texas purchases a specialized industrial machine from a supplier in Michigan. Their contract specifies "FOB Destination, Buyer's Plant."

  Illustration: In this scenario, the "attachment of risk" does not occur until the machine is delivered to the buyer's plant in Texas. If the machine is damaged during its journey from Michigan to Texas, the supplier (seller) is responsible for the loss because the risk had not yet attached to the buyer. The seller would be obligated to replace the machine or repair the damage at their own expense, as the risk remained with them until successful delivery to the specified destination.