shipment contract

A shipment contract is a type of sales agreement where the buyer assumes the risk of loss once the seller delivers the goods to a common carrier. The seller’s responsibility ends when the goods are properly handed over for transport. This contract is often identified with terms like "FOB [seller’s city]."

In the United States, shipment contracts are governed by Article 2 of the Uniform Commercial Code. For international shipments, additional regulations may apply, including those from the International Maritime Organization (IMO), which oversees maritime safety, shipping practices, and cargo handling standards under conventions such as SOLAS and the International Convention for the Prevention of Pollution from Ships (MARPOL).

[Last reviewed in July of 2025 by the Wex Definitions Team]

Keywords

contract law

Wex