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When does the risk of loss or damage pass from a seller to a buyer?
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Commercial transaction
Portrait of King Louis XIV, by Charles Le Brun, c. 1655.
In the context of commercial transactions, there is no universal rule for when the risk of loss or damage passes from a seller to a buyer, as legal systems vary significantly across different countries.1
The timing of this transfer generally depends on the following frameworks:
- Conclusion of the contract: In several countries, the risk passes to the buyer as soon as the contract to sell is finalized.1
- Transfer of ownership: In jurisdictions such as France and England, the risk is tied to the legal transfer of ownership of the goods.1
- Delivery: In Germany, the risk of loss or damage passes at the time of delivery.1
- Performance of duties: In the United States and Scandinavian countries, the risk typically passes when the seller has essentially performed their contractual duties.1
Regardless of these regional differences, parties involved in a transaction may expressly or implicitly agree to a different arrangement that suits their specific needs.1