Shipment Contract vs Destination Contract Under the UCC
The difference turns on where the seller must get the goods before delivery is complete.
Shipment contract
In a shipment contract, the seller generally fulfills the delivery obligation by properly placing the goods with the carrier and taking the required shipment steps.
Destination contract
In a destination contract, the seller must generally tender the goods at the specified destination before the delivery obligation is complete.
Risk implications
The classification can affect risk-of-loss analysis and whether the seller has properly performed.
Exam strategy
Look at the delivery term: carrier handoff usually signals shipment; required arrival at a named destination signals destination.
The takeaway
Shipment contracts focus on proper handoff to the carrier; destination contracts require proper tender at the specified destination.
Related Summit resources
FAQ
What is the key distinction?
Shipment contracts focus on proper handoff to the carrier; destination contracts require proper tender at the specified destination.
What should I identify first?
The difference turns on where the seller must get the goods before delivery is complete.
Why is this tested?
Separate when a seller's delivery obligation ends in a shipment contract versus a destination contract.