In a shipment contract, generally the risk of loss during transit is placed on:

Question

BlackTom AI · Accepted Answer

First, let's restate the question and options to ensure clarity:
Question: In a shipment contract, generally the risk of loss during transit is placed on:
Options:
- neither buyer nor seller.
- the buyer and the seller, proportionately.
- the seller.
- the buyer

Now, analyze each option:
Option 1: neither buyer nor seller.
This is incorrect because, in a shipment contract, the risk of loss is allocated to one of the parties, not left in a vacuum. The contract framework assigns risk transfer points to prevent ambiguity about who bears loss during transit.
Option 2: the buyer and the seller, proportionately.
This is not consistent with standard shipment contracts. The risk typically shifts as a function of delivery milestones rather than a proportional split; the UCC defines specific transfer points when goods are delivered to the carrier, not a shared proportional risk.
Option 3: the seller.
This is correct. In a shipment contract, the seller bears the risk of loss while the goods are in transit up to the point they are delivered to the carrier (the carrier assumes responsibility after delivery) or until the carrier delivers the goods to the buyer, depending on the terms. The seller’s obligation to ship and risk of loss during transit aligns with the concept that risk passes to the buyer upon proper delivery to the carrier.
Option 4: the buyer.
This is incorrect for a shipment contract. The buyer usually assumes risk of loss after receipt or upon delivery from the carrier, not during the transit period while goods are with the carrier, which is typically the seller’s risk.

In summary, the standard rule for a shipment contract places the risk of loss on the seller during transit until the goods are delivered to the carrier and clear for shipment, after which risk may transfer per contract terms. The other options misstate the allocation or misunderstand the point at which responsibility shifts.

In a shipment contract, generally the risk of loss during transit is placed on:

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