Destination Contracts

In a destination contract, the seller‘s obligation is to see to it that the goods actually arrive at the destination. Here again, the parties may employ the use of abbreviations that indicate the seller‘s duties. See the following from the UCC, Section 2-319:

  • F.O.B. [destination] means the seller‘s obligation is to ―at his own expense and risk transport the goods to that place and there tender delivery of them‖ with appropriate pickup instructions to the buyer.
  • Ex-ship ―is the reverse of the F.A.S. term.‖ Uniform Commercial Code, Section 2-322. It means ―from the carrying vessel‖—the seller‘s obligation is to make sure the freight bills are paid and that ―the goods leave the ship‘s tackle or are otherwise properly unloaded.‖
  • No arrival, no sale means the ―seller must properly ship conforming goods and if they arrive by any means he must tender them on arrival but he assumes no obligation that the goods will arrive unless he has caused the non-arrival.‖ Uniform Commercial Code, Section 2-324. If the goods don‘t arrive, or if they are damaged or deteriorated through no fault of the seller, the buyer can either treat the contract as avoided, or pay a reduced amount for the damaged goods, with no further recourse against the seller. Uniform Commercial Code, Section 2-613.
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