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[kevin oleary]
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LSDefine
Simple English definitions for legal terms
Shipment Contract
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A quick definition of Shipment Contract:
A shipment contract is a way for a buyer and seller to agree on who will be responsible if goods are lost or damaged before the buyer receives them. With a shipment contract, the buyer takes on the risk of loss for the goods once they are shipped by the seller. The seller's only responsibility is to make sure the goods are delivered to a carrier and arrangements are made for them to be delivered to the buyer. If anything happens to the goods during shipment, the buyer is responsible for the costs. A shipment contract can be identified by the phrase "free on board" and the location of the seller.
A more thorough explanation:
A shipment contract is a type of agreement between a buyer and seller that determines who bears the risk of loss if goods are lost or damaged during shipment. This type of contract is governed by Article 2 of the Uniform Commercial Code.
Under a shipment contract, the buyer assumes the risk of loss for the goods once they are in transit, but before they are actually received. The seller's responsibility is to get the goods to a common carrier and make arrangements for delivery to the buyer. If any loss occurs during shipment, the buyer is responsible for the costs.
For example, if a buyer in New York purchases a shipment of goods from a seller in California, and they agree to a shipment contract, the seller's only responsibility is to get the goods to a common carrier in California. Once the goods are in transit, the buyer assumes the risk of loss until they are received in New York.
Another example could be a company that regularly ships products to customers. They may have a standard shipment contract that outlines the responsibilities of both parties in the event of loss or damage during shipment.