Legal Definitions - no arrival, no sale

The term "no arrival, no sale" refers to a specific condition sometimes included in sales contracts, particularly for goods that need to be shipped over a distance. It places the responsibility and risk of successful delivery squarely on the seller.

Under a "no arrival, no sale" agreement:

• The seller is obligated to deliver the goods to a specific destination.
• The seller bears the risk of loss or damage to the goods while they are in transit.
• If the goods do not arrive at the specified destination, or if they arrive damaged or significantly late, the buyer has the option to either cancel the contract entirely (avoid the sale) or accept the goods at a reduced price.

Essentially, the sale is contingent upon the goods arriving safely and on time, in an acceptable condition. If these conditions are not met, the buyer is not obligated to complete the purchase.

Examples:

• Example 1: Perishable Goods Shipment

  A restaurant in Chicago orders a large quantity of fresh, exotic seafood from a supplier in Alaska, with their contract specifying "no arrival, no sale." During the air freight shipment, an unexpected delay causes the refrigeration unit to fail, and the seafood arrives spoiled and unfit for consumption.

  Illustration: Because of the "no arrival, no sale" clause, the Alaskan supplier bears the risk of the seafood spoiling during transit. The restaurant can refuse to accept the spoiled shipment and cancel the order without payment, as the goods did not arrive in an acceptable condition. The supplier would be responsible for the loss.

• Example 2: Time-Sensitive Industrial Equipment

  A manufacturing plant purchases a crucial, custom-built machine part from an overseas vendor. The plant has a tight production schedule, so the contract includes a "no arrival, no sale" term, specifying delivery by a certain date. Due to unforeseen customs issues and shipping delays, the part arrives three weeks after the agreed-upon deadline, causing significant disruption to the plant's operations.

  Illustration: The "no arrival, no sale" condition means the overseas vendor is responsible for the timely delivery of the machine part. Since the part arrived too late to meet the manufacturing plant's critical schedule, the plant can invoke the clause, reject the late delivery, and cancel the purchase, placing the burden of the delay and its consequences on the vendor.

• Example 3: Unique Collectible Item

  An antique dealer purchases a rare, one-of-a-kind vintage automobile from a seller in another state, with the agreement stating "no arrival, no sale" for delivery to the dealer's showroom. While being transported by a specialized carrier, the truck carrying the automobile is involved in an accident, and the vehicle is completely destroyed.

  Illustration: Under the "no arrival, no sale" term, the original seller assumes the risk of the automobile's loss during transit. Since the vehicle never arrived at the dealer's showroom, the sale is void, and the antique dealer is not obligated to pay for the lost item. The seller would bear the financial loss of the destroyed automobile.