Legal Definitions - C.O.D.

C.O.D. stands for Cash on Delivery or Collect on Delivery.

This is a payment and delivery term where the buyer pays for goods or services at the exact moment they are delivered, rather than paying in advance or on credit. Essentially, the seller ships the item, and the shipping carrier is instructed to collect payment from the buyer before handing over the goods. The carrier then transmits this payment to the seller. A key aspect of C.O.D. transactions is that buyers typically do not have the right to inspect the goods before making the payment.

• Example 1 (Online Retail): A customer orders a unique, handcrafted piece of jewelry from a small online artisan who prefers C.O.D. for international shipments to mitigate fraud risks. When the package arrives at the customer's door, the delivery driver requires the customer to pay the full amount due (including shipping) before releasing the jewelry.

  Explanation: This illustrates C.O.D. because the payment for the jewelry is collected by the delivery driver (acting as the carrier's agent) at the time of delivery, and the customer must pay before taking possession of the item.

• Example 2 (Local Service/Repair): A homeowner calls a local appliance repair service for a broken washing machine. The technician diagnoses the issue and orders a specific part. When the technician returns with the new part to complete the repair, the service agreement states "C.O.D." for the part and labor. The homeowner pays the technician the total bill immediately after the repair is finished and the washing machine is confirmed to be working.

  Explanation: Here, C.O.D. applies to the service and the part. Payment is collected by the service provider (or their agent) at the point of delivery of the completed service and the installed part, ensuring the service is paid for upon its successful completion.

• Example 3 (Wholesale/Business Transaction): A small bakery orders a special batch of imported flour from a new supplier. Since it's their first transaction, the supplier requires payment on a C.O.D. basis. When the delivery truck arrives at the bakery with the sacks of flour, the bakery owner must provide a check or cash to the driver for the full invoice amount before the flour is unloaded and brought into the bakery.

  Explanation: This demonstrates C.O.D. in a business context. The bakery (buyer) pays the delivery driver (carrier's agent) for the flour at the moment it is delivered, ensuring the supplier receives payment immediately upon the goods reaching the buyer.