What Is a Shipment Contract? (2024)

FAQs

What Is a 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.

An example of this would be if the seller is shipping a load of televisions from New York to the buyer in Chicago. The contract states “FOB New York Factory,” which indicates that the seller is required to load the goods from its factory in New York.

[6] In a shipment contract the seller must merely provide conforming goods to the carrier, at which time the risk of loss passes to the buyer. In a destination contract, the seller retains responsibility for anything that goes wrong until the goods reach the purchaser.

All About Contracts for Shipping

So, it is usually between a seller, a carrier, and a buyer. Often, the contract states out that the seller is responsible for the shipment until it reaches the carrier. Once it is at the carrier, then the buyer would take responsibility for any losses.

Shipping Contracts means the agreement or agreements under which the Project Company charters a vessel or enters into other transportation arrangements to provide the transportation of LNG produced by the Project for export to a discharge port, as the same may be supplemented, amended or modified in accordance with its ...

Free on board, often abbreviated as “F.O.B.,” applies to the sale of goods and indicates that purchased property will be placed on board a vessel for shipment at a designated place without expense to the buyer for packing, potage, cartage, etc.

Once on the ship, the buyer is responsible financially for transportation costs, customs clearance, fees, and taxes. Conversely, with FOB destination, the seller pays the shipment cost and fees until the items reach their destination, such as the buyer's location.

In a shipment contract, the seller has four duties: (1) to deliver the goods to a carrier; (2) to deliver the goods with a reasonable contract for their transportation; (3) to deliver them with proper documentation for the buyer; and (4) to promptly notify the buyer of the shipment (UCC, Section 2-504).

What is the name of shipping contract? ›

bill of lading: A contract between a shipper and carrier listing the terms for moving freight between specified points.

A bill of lading is a document of title, a receipt for shipped goods, and a contract between a carrier and a shipper. This document must accompany the shipped goods and must be signed by an authorized representative from the carrier, shipper, and receiver.

All three modes of shipping-land, air, and sea-play a significant role in our economy.

"Shipment" derives from the Old English word "scip" pronounced the same as modern "ship" and having cognate forms in other Germanic languages. The historical usage of "shipment" was to indicate the totality of cargo being transported at one time, whether on multiple wagons or multiple ships.

A destination contract requires the seller to deliver goods to either the buyer's place of business or another destination, with title passing when delivery is rendered.

A common carrier is able to work with multiple shippers to fulfill the duty they have to their customers. Contract carriers work under contract with specific shippers. The shippers can work via air or water, but the carrier is only restricted to work with one shipper as they are in a long-term contract.

A batch of goods destined for or delivered to someone. Example: “The latest shipment of books arrived at the store today.”

There are many different types of carrier contracts. Carrier agreements, rate confirmations, load tenders, accessorial contracts, and bills of lading all serve different purposes.

A bill of lading is a contract issued by a transport company to a shipper that spells out the quantity, type, and destination of the goods being shipped.