Shipment Contract Lawyers (2024)

What is a Shipment Contract?

A shipment contract is a legal document concerning the sale of goods (transfering a tangible item for a price) and other commercial transactions that are subject to theUniform Commercial Code (UCC). Entered into by a buyer and seller, the shipment contract states the buyer’s risk for any loss or damages that result during the shipment of goods.

Shipment contracts can also provide other types of information. For instance, they also establish the seller’s liability up to the moment when the goods are delivered to acommon carrier or port of shipment, when liability is transferred to the carrier or back to the buyer.

Contents

  1. What is the Uniform Commercial Code?
  2. Is a Shipment Contract Different from a Destination Contract?
  3. What Terms Can Help You Spot a Shipment Contract?
  4. Should I Seek Legal Help If I Have a Dispute over a Shipment Contract?

What is the Uniform Commercial Code?

The UCC is a codified set of laws and rules intended to achieve uniformity among the states concerning commercial transactions. The UCC concerns commercial and business transactions involving sales, leases, funds transfers, documents of title, secured transactions, and investment securities, among other commercial transactions. While UCC addresses the transfer or sale of personal property, it does not regulate transactions dealing with real property.

The UCC does require some sales of goods to be in writing to be legally enforceable. As stated earlier, shipment contracts discuss the risks of both the buyer and the seller. The shipment will also have all the earmarks of good contract requirements concerning the sale of goods, including price, payment, quantity and delivery.

Is a Shipment Contract Different from a Destination Contract?

Like a shipment contract, a destination contract is a type of freight contract that concerns the sale of goods and is governed by the UCC. In a destination contract, the seller agrees to ensure delivery of the specified goods to the buyer’s destination, and the seller’s liability continues until the goods are actually delivered. Risk of loss or damage to the goods while they are in delivery is borne by the seller.

In comparison, with a shipment contract, the seller’s liability typically ends when the goods are loaded onto the carrier or delivered to a specified location for shipment to the buyer. At that point, the liability is transferred to the buyer, or to the common carrier by contract.

What Terms Can Help You Spot a Shipment Contract?

Under the UCC, the shipment contract allows the buyer and seller to allocate risk in the event the goods are lost or damaged before the buyer receives the goods. The seller promises to get the goods to a common carrier to make delivery of goods from seller to buyer. The shipment contract will typically state “free on board” and list where the seller is located.

If your contract has language that is similar to that above, you probably have a shipping contract. Additionally, the shipment contract may read like the following:

  • FOB Plus the Place of Shipment or Seller’s Location: The place from which the goods ship is stated at the end of “free on board” or “freight on board” (FOB) clause. For example, 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. Once it does so, it no longer has any liability to buyer under the contract.
  • FAS [name of the port/vessel]: This means “free alongside ship,” which is followed by the name of the port or vessel from which the goods are shipped to the buyer.
  • CIF or CF: You also may have a shipment contract if it includes the terms “cost, insurance, and freight” (CIF) or “cost and freight” (CF). This means that the seller assumes the costs and responsibility for the freight (which includes insurance) to deliver buyer’s goods to the port of destination. The seller’s CIF may be reflected in a higher price on buyer’s goods. The risk transfers back to buyer once the goods are loaded on the ship.

On the other hand, the following terms generally point to a destination contract:

  • FOB Destination” or “FOB Buyer’s Factory.”
  • Ex Ship: This means seller’s price includes charges up to the port of destination or arrival when liability passes to the buyer who is responsible for unloading the goods.
  • No Arrival, No Sale: This is a UCC term that gives the buyer the option to cancel the contract or accept the goods at a discounted cost. This covers scenarios in which the goods are lost or damaged while the seller is delivering the goods to a specified location.

Should I Seek Legal Help If I Have a Dispute over a Shipment Contract?

Freight contracts are fairly standard in the shipping industry. However, if you are dealing with a complicated arrangement concerning your obligations under a shipment contract, you may wish to consult with a qualified contract lawyer to help you negotiate and draft your shipment contract. Your attorney also can help you if the shipment contract has been breached and you have suffered damages as a result.

Shipment Contract Lawyers (1)

Michelle Shaw

LegalMatch Legal Writer

Original Author

Michelle received her BA in English and Anthropology from Williams College, and then went on to receive her Juris Doctor from Rutgers University School of Law. After law school, she practiced as an attorney and focused on environmental policy. She later transitioned to full-time writing for a variety of publications on a wide-range of legal topics. She has written about legal marijuana, the Family Medical Leave Act, and articles designed to guide future lawyers on what steps to take after graduation. You can learn more about Michelle and her experience as a legal writer at her personal website.

Shipment Contract Lawyers (2)

Jose Rivera

Managing Editor

Editor

Last Updated:Apr 10, 2019

Shipment Contract Lawyers (2024)

FAQs

How do you answer a contract law problem question? ›

Be clear and precise when setting out the relevant law, it will make the application so much more easier! This means that you must demonstrate how the law (as you have outlined and explained it) applies to the facts of the question, i.e. you must show what the rule you have just outlined means for the scenario at hand.

How do you get out of a breach of contract? ›

6 Common Remedies for Breach of Contract in Business
  1. Compensatory Damages. An award of compensatory damages is the most common of the legal remedies for breach of contract. ...
  2. Specific Performance. ...
  3. Injunction. ...
  4. Rescission. ...
  5. Liquidated Damages. ...
  6. Nominal Damages. ...
  7. Consult with a Contract Law Attorney About Your Case.
Oct 11, 2022

How do you win a contract case? ›

To win a breach of contract claim, a plaintiff has to prove that there was an agreement; that the plaintiff performed according to agreement terms or was excused from performance; that all of the conditions for the defendant's performance were satisfied or excused; and that the defendant failed to complete his ...

Can you negotiate a contract without a lawyer? ›

Consulting a Business Lawyer

If you and the other side are in general agreement about the contract's terms and you have knowledge of basic contract provisions, you can probably negotiate the agreement yourself. Your industry knowledge and business insight will be valuable assets at the negotiation table.

What are common mistakes in law of contract? ›

A common mistake is the circ*mstance where all parties to a contract are “mistaken” regarding a fundamental matter of fact. If both parties are under the same misapprehension (e.g. the existence of goods under a sale of contract) it may render the contract void at law or, in some circ*mstances, voidable in equity.

Is contract law difficult? ›

Contract exams are not as transactional as criminal law or torts, so many law students find them more difficult. There are a lot of interlocking pieces on a contract law exam. Generally, the exam has one to three contracts at issue and you must analyze those in great depth.

Is breach of contract hard to prove? ›

The short answer is yes. Breaches of oral contracts are harder to prove, but the contracts are absolutely enforceable. Breach of oral contract elements are the same as for written contracts. The hardest part of proving a breach of contract for an oral agreement is proving that the contract existed and was valid.

What is a legal excuse for breach of contract? ›

This practice note covers excuses that develop after contract formation, such as failure of a condition, supervening events, impossibility, impracticability, frustration of purpose, anticipatory repudiation, and later agreements between the parties (including modifications, waivers, rescissions, and accord and ...

What are the 4 types of damages available for breach of contract? ›

Today, we're looking into four types of damages you may be able to receive in a breach of contract case.
  • Compensatory damages. ...
  • Punitive damages. ...
  • Nominal damages. ...
  • Liquidated damages.
Sep 20, 2022

What must be proven to win a case? ›

Depending on the jurisdiction and type of action, the legal standard to satisfy the burden of proof in U.S. litigation may include, but is not limited to: beyond a reasonable doubt in criminal law. clear and convincing evidence in fraud in will disputes. preponderance of the evidence in most civil cases.

What are the four C's in contract law? ›

In deciding which dispute resolution option to choose, a party should consider the four C's of dispute resolution: cost, complexity, competency, and conclusiveness.

How serious is breach of contract? ›

A material breach-failure to perform one's duties as set in the contract-is considered one of the most serious, and allows the injured business or individual to seek damages in court. The broke contractor mentioned above might be able to collect in court because his client failed to perform his end of the deal.

How do you politely negotiate a contract? ›

10 Tips for Successful Contract Negotiation
  1. Start with a draft. ...
  2. Break it down into smaller pieces. ...
  3. Keep your initial terms simple. ...
  4. Know your “why.” ...
  5. Prioritize your key objectives. ...
  6. Ask questions and understand your counterparty's motives. ...
  7. Come prepared with research.

Are unfair contracts illegal? ›

Abusive contracts are illegal or unfair to one of the parties. These types of contracts are void under the law and are not enforceable. An unconscionable abusive contract is a contract that is so one sided, it would be unjust for one of the parties to be required to perform their duties under the contract.

How long do contract negotiations take? ›

It usually takes 4 to 6 weeks to negotiate contract language. This step may take longer or shorter, depending on the complexity and risk involved with the specific contract.

What are the 3 types of misrepresentation? ›

There are three types of misrepresentations—innocent misrepresentation, negligent misrepresentation, and fraudulent misrepresentation—all of which have varying remedies.

What are the 3 types of mistakes? ›

The three types of mistake recognised by the law are:
  • common mistake.
  • mutual mistake, and.
  • unilateral mistake.

What are the two types of contract mistakes? ›

There are two types of mistakes of facts that can occur:
  • Bilateral mistake: Both parties are misinformed as to the contracts meaning and terms. ...
  • Unilateral mistake: A unilateral mistake means that just one party is misinformed as to the terms or meaning of the contract.

What is the most difficult type of contract to enforce? ›

Contracts May be Oral or Written

Contracts are formed through written or oral agreement. Understandably, oral agreements are far more difficult to enforce than written contracts. Nevertheless, the law provides for oral contract formation, including oral rescission, and modifications.

What 3 things make a contract legal? ›

The basic elements required for the agreement to be a legally enforceable contract are: mutual assent, expressed by a valid offer and acceptance; adequate consideration; capacity; and legality. In some states, elements of consideration can be satisfied by a valid substitute.

What is the most basic rule of contract law? ›

Offer and Acceptance

The most basic rule of contract law is that a legal contract exists when one party makes an offer and the other party accepts it. For most types of contracts, this can be done either orally or in writing.

What are 6 things that void a contract? ›

What Is a Voidable Contract?
  • Failure by one or both parties to disclose a material fact.
  • A mistake, misrepresentation, or fraud.
  • Undue influence or duress.
  • One party's legal incapacity to enter a contract (e.g., a minor)
  • One or more terms that are unconscionable.
  • A breach of contract.

What are the three 3 most important elements in proving that a contract exists? ›

Elements of a Contract
  • Offer - One of the parties made a promise to do or refrain from doing some specified action in the future.
  • Consideration - Something of value was promised in exchange for the specified action or nonaction. ...
  • Acceptance - The offer was accepted unambiguously.

How does a court usually calculate damages in a contract case? ›

Receiving actual damages does not prevent a party from also receiving punitive damages. When calculating actual damages, courts will often look at the fair market value of destroyed/damaged property, lost wages/income, and necessarily incurred expenses.

What is the most common breach of contract? ›

Material Breach

This can be the case when goods and services are not provided at all or within a specified length of time per the contract. These are probably the most major and most common of all types of breaches. This might also be called an “actual” breach.

What 3 elements must a breach of contract claim? ›

The existence of a contract; Performance by the plaintiff or some justification for nonperformance; Failure to perform the contract by the defendant; and, Resulting damages to the plaintiff.

What is a willful breach of contract? ›

"'wilful breach' means a material breach of this Agreement that is a consequence of any act undertaken or failure to act by the breaching Party with the knowledge that the taking of such act or failure to act would, or would be reasonably expected to, cause a material breach of this Agreement" (Section 1.1 – definition ...

How much compensation for breach of contract? ›

The general remedy for breach of contract is a monetary sum amounting to the financial loss suffered as a result of the breach. The common law position is to place the innocent party in the same position as if the contract had been performed, such as accounting for a loss of sales.

What is an example of a major breach of contract? ›

A material breach of contract could be something like failing to produce any product as outlined by the deal or failing to pay the agreed-upon price for the delivered product. Another example of a material breach would be the delivery of the wrong product.

Which damages are not recoverable for breach of contract? ›

Punitive Damages: Damages designed to punish a wrongdoer and to deter similar conduct in the future. Such damages are generally not recoverable in breach of contract actions, unless the breaching party's actions give rise to a separate tort claim.

What is the hardest case to win in court? ›

Murder, First Degree

This is because it entails premeditation, which means the defendant is accused of pre-planning their victim's death.

What 3 things must a plaintiff prove? ›

Breach - The defendant breached that legal duty by acting or failing to act in a certain way; Causation - It was the defendant's actions (or inaction) that actually caused the plaintiff's injury; and. Damages - The plaintiff was harmed or injured as a result of the defendant's actions.

How much evidence is enough to convict someone? ›

Beyond a reasonable doubt.

Every state in the country has laws that make it clear a prosecutor must present enough evidence to show, beyond a reasonable doubt, that the defendant committed the crime they are accused of.

What are the 5 essential elements of a contract? ›

  • The Offer.
  • Acceptance.
  • Consideration.
  • Mutuality of Obligation.
  • Competency and Capacity.
  • Other Considerations.
  • Types of Contracts.
  • Why Are Contracts Necessary?

What are 4 valid contracts? ›

There are four elements that are required for a legally valid contract: offer, acceptance, consideration, and intention to create legal relations.

What happens if you lose a contract? ›

In general, if the contract is not lost, a copy of the contract is presented to the court. If the contract is lost and all copies are also lost, then other forms of evidence must be used to prove what was written in the contract. Before the litigation stage, there are several preventative measures that should be taken.

What are the 5 forms of breach of contract? ›

  • Minor Breach. ...
  • Material Breach. ...
  • Anticipatory Breach. ...
  • Fundamental Breach. ...
  • Actual Breach.

What is minor breach of contract? ›

A minor breach of contract occurs when a party to a contract performs most of the terms of the contract. The party may fail to perform a minor term of the contract that does not significantly impact the other contract terms.

How do you negotiate a tough deal? ›

What to do when negotiating
  1. Be the first to make an offer. Part of being a good negotiator is taking control of the deal. ...
  2. Provide set terms instead of price ranges. ...
  3. Use words wisely while negotiating. ...
  4. Ask open-ended questions and be a good listener. ...
  5. Offer a win-win scenario.

What are the 7 steps of the negotiation process? ›

What are the 7 stages of negotiating?
  • Try.
  • Raise the bar.
  • Other side of the table.
  • Yields/Shields.
  • Assigning value.
  • Prepare offers.
May 10, 2023

How do you counter offer a contract? ›

You can use the following steps as guidance when countering a job offer to negotiate your compensation:
  1. Ask for time to make your decision. ...
  2. Conduct research on industry compensation. ...
  3. Assess your qualifications and experience. ...
  4. Review and evaluate the initial offer. ...
  5. Determine your counteroffer value. ...
  6. Submit your counteroffer.
Sep 30, 2022

What is a predatory contract? ›

A predatory lease is an unfair or illegal rental contract that takes advantage of the renter. Sometimes, predatory leases are outright scams designed to cheat tenants out of their money or belongings. In other instances, predatory leases are legal and valid agreements but with terms that are unfair to the renter.

What makes a contract void? ›

A contract may be deemed void if the agreement is not enforceable as it was originally written. In such instances, void contracts (also referred to as "void agreements"), involve agreements that are either illegal in nature or in violation of fairness or public policy.

What makes a contract invalid? ›

If the formation or performance of the contract will require a party to break the law, the contract is invalid. Examples of contracts with illegal subject matter: Agreement for the sale or distribution of prohibited substances, such as drugs. Contracts to engage in an illegal activity.

When should you walk away from contract negotiation? ›

Anything that is under Breakpoint to Achieve is your key point as to when you should walk away in a negotiation. Once the other party starts to mention anything that is placed under the Breakpoint table should be your call to attention for a possible walk away point.

Do contractors expect you to negotiate? ›

Remember to treat the contractor as an ally who can help you lower costs if any figures are too high. They want your business just as much as you want their help. So if you're open with them about cost concerns, they should try to meet you halfway.

What is bad faith bargaining? ›

Engage in bad-faith, surface, or piecemeal bargaining. Refuse to furnish information the union requests that is relevant to the bargaining process or to the employees' terms or conditions of employment. Refuse to sign a writing that incorporates a collective-bargaining agreement you have reached with the union.

What are contract problems? ›

A contract issue is any disagreement or problem that may arise during the formation or performance of the contract. The contract issue could be something as small as a misunderstanding about the terms of the agreement, or it could be something much larger, such as one party not holding up their end of the bargain.

What is contract law explanation? ›

Contract law is the legal body that encompasses both the origination, enforcement and ultimate enactment of all legal contracts or agreements. All those who engage in business transactions, at some point or another, engage in contract law. Companies and consumers alike use contracts in their everyday actions.

What are the possible problems that could occur in a contract situation? ›

Common contract clarity issues can include a lack of contract scope, payment processes, delivery schedules, term penalties, compliance boundaries and more. Lack of price protection: Businesses may experience unexpected price hikes, only to find their contracts contain no price protection terms or clauses.

What is an answer to a legal question? ›

Mostly, an answer includes the defendant's counterclaims (allegations or claims against the plaintiff) and/or affirmative defenses (legal defenses that can defeat the plaintiff's claim).

What are the 3 conditions of a contract? ›

Contracts are made up of three basic parts – an offer, an acceptance and consideration.

What are the 4 conditions of a contract? ›

The basic elements required for the agreement to be a legally enforceable contract are: mutual assent, expressed by a valid offer and acceptance; adequate consideration; capacity; and legality. In some states, elements of consideration can be satisfied by a valid substitute.

What are the 7 conditions of a contract? ›

There are seven essential elements an agreement must have to be considered a valid contract. The elements of a contract include identification, offer, acceptance, consideration, meeting of the minds, competency and capacity, and contract legality.

What is unenforceable contract? ›

What is an Unenforceable Contract? An unenforceable contract is a valid contract that the court chooses, for specific reasons, not to enforce. An unenforceable defense is commonly used in contradistinction to void the contract or make it voidable.

What is the main purpose of contract law? ›

The primary purpose of contract law, he contends, is to enforce the agreement of the parties. For there to be a contract, substantial agreement must exist and the parties must have freely intended to be legally bound. In interpreting contracts, courts are primarily try- ing to carry out the intent of the parties.

What factors can destroy a contract? ›

There are five vitiating factors that undermine a contract: Misrepresentation, Mistake, Duress, Undue Influence and Illegality.

What makes a contract bad? ›

Bad Contracts Contain Unfair or Unreasonable Terms

One-sided contracts can include unfair terms that favor the party that drafted the agreement. For instance, an agreement may include an indemnity clause in which one party is left with all the risk.

What makes a contract ineffective? ›

This includes the use of uncertain language, incomplete information where there is a missing essential term, a mutual mistake or misunderstanding between both parties, a lack of mental capacity to understand the contract, illegal matters contained within the contract or if the contract constitutes a breach of public ...

Do lawyers object to questions or answers? ›

The real legal world is rarely as tense an active as courtroom dramas would have you believe. For example, your attorney is bound by the law when objecting to questions: he may only interrupt if the question is irrelevant or improper. If the answer hurts your case, but is relevant, there is legally nothing he can do.

What are the 4 types of cases? ›

Types of Cases
  • Criminal Cases. Criminal cases involve enforcing public codes of behavior, which are codified in the laws of the state. ...
  • Civil Cases. Civil cases involve conflicts between people or institutions such as businesses, typically over money. ...
  • Family Cases.

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