REG UCC · Updated November 2026
Goods Are Damaged in Transit. Who Bears the Loss?
Do not answer until you know whether the contract is a shipment contract, destination contract, or a non-carrier delivery.
Shipment contract
The seller generally completes its delivery obligation by properly placing goods with the carrier and performing required shipping steps.
Destination contract
The seller generally bears risk until the goods are properly tendered at the specified destination.
Merchant vs nonmerchant
When no carrier shipment is involved, whether the seller is a merchant can affect when risk passes.
Breach
Nonconforming goods can change the ordinary risk-of-loss result, so test breach before applying the default rule.
The takeaway
Shipment contracts generally shift risk earlier. Destination contracts generally keep risk with the seller until proper tender at destination.
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FAQ
Does risk always pass when goods reach a carrier?
No.
Can breach change risk of loss?
Yes.
Is risk of loss always identical to title transfer?
No.