Risk Transfer in Commercial Trade Law
Passing of Risk in Trade Law
A significant issue in Trade Law is the transfer of risk, particularly concerning commodity deterioration. Key attribution rules include:
a) Risk pertains to specific goods, not gender.
b) The debtor (seller and owner) bears the risk if they fail to deliver.
Commercial Law, being a law among professionals, addresses risk transfer in detail, especially in trade involving goods transportation. Delivery concerns both buyer and seller due to potential damages and taxed goods.
In Trade Law, the distance between parties often necessitates goods transport, introducing risks during loading, storage, and transit. To manage this, Trade Law separates delivery into two stages: provision of goods by the seller and buyer’s collaboration to complete delivery.
The general risk rule, outlined in Articles 331-333 of the Commercial Code (CCo), states that the seller bears the risk until making the goods available at the agreed time and place. Until then, the seller faces economic consequences for loss or damage, unable to claim the sale price.
Article 331 allows contract termination if goods are lost before delivery without seller negligence, unless a repository was established under Article 339.
Article 333 refers to provision, not defined in the CCo, but generally understood as the seller completing all delivery responsibilities, barring buyer non-cooperation.
If the seller makes goods available but the buyer delays retrieval, the seller can demand care fees and isn’t liable for risk transfer, as per Article 339.
If goods are lost before provision and the buyer paid in advance, the seller must refund the payment (Article 335 CCo).
Exceptions to the General Rule
Article 334 of the CCo outlines three situations where the seller bears the risk:
Accidental Damage: If goods are sold by number, weight, or measure, or are not specifically identified, making delivery specification impossible.
Express Agreement or Trade Usage: In trial sales, where the buyer assesses conformity before accepting delivery.
Conditional Contracts: If goods must meet specific conditions before transfer, the seller is freed from risk consequences once goods are dispatched.
Risk assessment in Commercial Law involves evaluating provision and determining when damage occurs. Distance between parties increases risk and complicates proof, especially in international trade.
Incoterms (International Commercial Terms) standardize risk transfer in international sales, setting precise moments for risk allocation.