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Alice, living in country A, sold an item to Bob, living in country B. She sent the item using A Post, tracked but with no insurance (the sale contract obliged her to ship the item, not deliver).

The item arrived in B but got stuck/lost somewhere in B Post. Bob approached B Post but was told they have no idea where the item was and that the sender should file claim with A Post.

Could Bob somehow break the privity of contracts "A↔A Post" and "A Post↔B Post" so that he could sue B Post for losing the item? For example, could Bob claim being a party to collateral contract here?

If answer varies vastly by jurisdiction, let's assume A=China, B=New Zealand.

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  • I think the usual course of action is that Bob should sue Alice, since the sale contract was that Alice should deliver the goods to Bob, and she (and her agents the postal services) didn't perform that. Alice may then turn around and sue the appropriate postal service. Jul 20, 2018 at 23:04
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    Another question is whether the postal service has disclaimed liability for lost shipments. As a state-run service, they might also have immunity by law. Jul 20, 2018 at 23:17
  • @NateEldredge Let's assume the sale contract obliged Alice to ship the item, not deliver.
    – Greendrake
    Jul 21, 2018 at 1:15
  • @Greendrake I came to ask almost this exact question - down to the country.
    – davidgo
    Jul 5, 2022 at 5:34
  • Usually, remedies for shipping damages by postal authorities is governed by postal system specific administrative law type remedies (if any) and not by bare contract law principles. If the shipment is FOB China and not insured, Bob probably bears the loss and has no remedy.
    – ohwilleke
    Jul 5, 2022 at 6:43

2 Answers 2

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Usually, remedies for shipping damages by postal authorities is governed by postal system specific administrative law type remedies (if any) and not by bare contract law principles.

Usually, reimbursement (at least in excess of postage paid or some other very minimal amount) for packages lost or damaged in shipping is only available from a postal system for a country in the case of packages shipped via that postal system, if the package is expressly insured.

Generally, all other remedies are either contractually waived, or are waived by statute or regulation.

Thus, while Alice might have a duty to cooperate with Bob in securing a remedy from the postal service, in all likelihood, that remedy will be minimal or non-existent.

If the shipping terms in the contract are FOB (Free on Board) China, and the shipment is not insured, Bob probably bears the loss and has no remedy. The question seems to imply that this is the case when it states that:

Alice, living in country A, sold an item to Bob, living in country B. She sent the item using A Post, tracked but with no insurance (the sale contract obliged her to ship the item, not deliver).

On the other hand, if the shipping terms in the contract were FOB Customer's Address, then Alice would bear the uninsured loss, and Bob could sue Alice for the loss, reverse payment on a credit card payment, or decline to pay if the goods were shipped on credit.

For what it is worth, shipping goods of any meaningful value via the postal service without insurance would be a quite irregular practice in an international sale of goods situation.

Incidentally, to the extent that there is a dispute between Alice and Bob (e.g. regarding shipping terms or contract formation), the law controlling that dispute is the U.N. Convention of the International Sale of Goods (CISG) and not either Chinese or New Zealand law, because both China and New Zealand are parties to the Convention, and this is an international sale of goods, if it is a business to business purchase rather than a consumer purchase from a business.

The relevant provisions of this treaty state:

Article 66

Loss of or damage to the goods after the risk has passed to the buyer does not discharge him from his obligation to pay the price, unless the loss or damage is due to an act or omission of the seller.

Article 67

(1) If the contrnct of sale involves carriage of the goods and the seller is not bound to hand them over at a particular place, the risk passes to the buyer when the goods are handed over to the first carrier for transmission to the buyer in accordance with the contract of sale. If the seller is bound to hand the goods over to a carrier at a particular place, the risk does not pass to the buyer until the goods are handed over to the carrier at that place. The fact that the seller is authorized to retain documents controlling the disposition of the goods does not affect the passage of the risk.

(2) Nevertheless, the risk does not pass to the buyer until the goods are clearly identified to the contract, whether by markings on the goods, by shipping documents, by notice given to the buyer or otherwise.

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Thanks to the wording of your question, I just found this, and wonder if its the answer - Contract and Commercial Law Act 2017 - https://www.legislation.govt.nz/act/public/2017/0005/21.0/whole.html#DLM6844064, Section 12(2). Section 12 reads:

Deed or contract for benefit of person who is not party to deed or contract

(1) This section applies to a promise contained in a deed or contract that confers, or purports to confer, a benefit on a person, designated by name, description, or reference to a class, who is not a party to the deed or contract.

(2) The promisor is under an obligation, enforceable by the beneficiary, to perform the promise.

(3) This section applies whether or not the person referred to in subsection (1) is in existence when the deed or contract is made.

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