You Might Be Thinking…

“If I’ve already paid, then it’s mine and I bear the responsibility.”
It’s not that simple. Under the law, what matters is not who paid, but when the item was handed over or what was agreed in the contract.

Clients Often Ask Me…

• When exactly does the risk of damage transfer from seller to buyer?

• What if the item is damaged by the carrier?

• Do different rules apply to consumers and businesses?

• Can the contract specify a different point of risk transfer?

• What if the seller deliberately or negligently delivers a damaged item?

Risk of Damage in a Nutshell

Under the Civil Code:

• Risk of damage passes to the buyer upon taking delivery of the item.

• If the item is handed over to a carrier for transport, the risk passes to the buyer at that moment.

• For consumer contracts, the law protects consumers: risk passes only upon physical receipt of the item by the consumer.

It’s important to distinguish between transfer of ownership (which may occur earlier) and transfer of risk of damage – they are not the same.

Risks and Common Mistakes

• Confusing the timing – buyers often think the seller bears the risk until full payment. In fact, delivery is decisive.

• Unclear transport terms – if not otherwise agreed, the buyer bears the risk once the item is given to the carrier.

• Lack of insurance – crucial when transporting valuable items.

• Contract gaps – without provisions on risk transfer, disputes are common.

Step-by-Step Guide

1. Identify who arranges the transport.

2. Agree in the contract on the exact moment of risk transfer.

3. For consumer contracts, know that the law protects you – risk passes only on physical delivery.

4. For business-to-business contracts, a different arrangement is possible.

5. Arrange transport insurance for valuable goods.

Examples from Practice

• Business buying machinery – machines were damaged in transport. Because the contract didn’t state otherwise, the buyer bore the risk once the goods were handed to the carrier.

• Consumer buying electronics online – the package arrived broken. The seller had to honor the claim, since risk passes only upon receipt by the consumer.

• Real estate – the buyer paid, but the house burned down before the keys were handed over. The seller bore the risk until delivery.

Why Be Careful with DIY Templates

Many “purchase agreement template free” versions omit provisions on transfer of risk of damage altogether. The parties then rely only on the law, which may be disadvantageous – especially for businesses.

Lawyer’s Recommendation

• Never underestimate provisions on risk transfer – they can have a major financial impact.

• Always arrange transport insurance for valuable goods.

• As a buyer, negotiate that risk passes only upon physical delivery.

Checklist for Certainty

✔ contract clause on risk transfer
✔ clear transport terms
✔ insurance for valuable shipments
✔ understanding the difference between ownership and risk

FAQ

When does risk of damage transfer in a standard purchase agreement?
Usually upon the buyer’s receipt of the item.

What about during transport?
To the buyer once the item is handed to the carrier (except for consumers).

Can the parties agree differently?
Yes, the contract can change the timing of risk transfer.