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Risk of Loss in Contracts - Assignment Example

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The assignment "Risk of Loss in Contracts" focuses on the critical analysis of the major issues in the risk of loss in contracts. Ocean freight has been one of the most utilized modes of shipment throughout the globe as it is cheaper and it can transport any size or weight of goods…

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Subject: English
Type: Assignment
Level: High School
Pages: 1 (250 words)
Downloads: 2
Author: gerholdlacey

Extract of sample "Risk of Loss in Contracts"

In such a case, the buyer should have included a condition subsequent (Mallor, et al., 2012) in their contract stating that full payment for the ordered goods will be rendered upon successful delivery of goods in perfect condition. Whereas, any circumstance that fails in delivery will therefore discharge the buyer from paying the agreed amount for the transaction. Setting conditions in a contract protects both parties from being charged with breach especially if failure of delivery is a result of force majeure.

On the other hand, the seller must secure a conditioned contract with a third party - insurance companies of the cargo ships – where, under the classification of condition precedent (Mallor, et al., 2012), the monetary amount insured will be collected by the seller in instances that their goods are damaged during transport.

In addition, their bond with the buyer must indicate specific conditions to prevent allegations of breach of contract from the other party if such circumstances occur. Nevertheless, the condition stated by the seller must indicate non-performance of expected duty only in force majeure situations such as bad weather conditions that result in damage of goods during transport thus preventing excuses to non-performance other than what is indicated in the contract (Mallor, et al., 2012).

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