I would like to solve this problem: let’s suppose there are two companies, company A and company B.Now they stipulate a contract: company A pays in advance for some devices, and company B needs to deliver them in 4 months.My question is.Who is the owner of these devices before they are delivered to company A?Any damage to these goods is responsibility of B or can be considered as a risk born by A?Thank you for your time.


Company B owns them until Company A does

The exact moment that ownership or risk transfers is a matter for the parties to agree. Ownership and risk can transfer at the same or different times, also as agreed.

If the parties do not explicitly agree, and if it’s relevant to a dispute, the court will need to establish when the transfer occurred. If there is a commonly used standard for this in the industry in which the parties operate, the court may make that an implicit term of the contract.

If there isn’t an industry standard, then the most likely outcomes are that both ownership and risk transfer from B to A when B delivers the goods to A or when A accepts the delivery (for example, A might reject the goods if they are faulty or not as specified).

Of course, if delivery is through an intermediary such a logistics company or an import/export firm it may be difficult to pinpoint the moment of delivery. This will likely turn on whether the intermediary is A or B’s agent. If A’s the transfer will likely be when the intermediary receives it from B, if B’s agent then likely when they deliver it to A. However, almost all contracts that include shipping will clearly state when title and risk transfers. The International Chamber of Commerce has even defined the most common arrangements. Similarly, online selling platforms like eBay and Amazon state who is at risk for goods in transit.

  • Thanks dale, just one more question.If a third party damages the goods, can company A sue this third party for infringement of property right?
    – Alex D'ago
    Sep 25 at 19:33
  • @AlexD'ago only if they own them.
    – Dale M
    Sep 25 at 21:15
  • I assume “if A suffered damages”. If the contract between A and B says that B owns the goods before transport starts, but A is responsible for damages during the transport, and C’s lorry hits A’s lorry, then A suffers damaged and should be able to sue C.
    – gnasher729
    Sep 25 at 22:24

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