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Transfer of risks in goods purchase and sale contracts is an important factor that helps participating parties clearly define their responsibilities and rights. Specifying regulations on when and how risks are transferred not only protects the commercial interests of both seller and buyer, but also minimizes disputes and uncertainty in transactions. The following article will analyze risk transfer cases and related legal solutions.
A contract for the sale of goods is a legal agreement between the seller and the buyer. According to Article 24 of the Law on Commercial 2005, contracts must be expressed verbally or in writing. International goods sales contracts must be made in writing or in another form with equivalent legal validity.
For some types of goods purchase and sale contracts that are required by law to be made in writing, traders must comply with that regulation.
According to Article 57 of the Law on Commercial 2005, risk is transferred to the buyer when the goods are delivered at the agreed location. The transfer of risk takes place immediately at the time the buyer or authorized person receives the goods. This provision applies even if the seller holds documents of ownership of the goods.
Scope of risk transferred:
Actual example: Company A (seller) delivers goods to Company B (buyer) at Company B’s warehouse at 123 XYZ Street. The risk is transferred to Company B as soon as the goods are delivered to this address and the representative of Company B signs to receive the goods.
Pursuant to Article 58 of the Law on Commercial 2005, risk transfers to the buyer when the goods are delivered to the first carrier. This provision applies in cases where the contract has a transportation clause but does not specify a specific delivery location.
Actual example: Company X in Hanoi sells goods to Company Y in Ho Chi Minh City, using the shipping service of unit Z. Risk is transferred to Company Y when Company location Z and has a delivery record.
Article 59 of the Law on Commercial 2005 stipulates two moments of risk transfer:
Case 1: When the buyer receives ownership documents
Case 2: When the consignee confirms possession
For goods in transit, risk is transferred from the moment the contract is signed. This regulation aims to clearly define the responsibilities of the parties in this special case.
Legal basis: Article 60 of the Law on Commercial 2005.
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To ensure your rights in commercial transactions, customers need professional advice on risk transfer regulations in goods purchase and sale contracts. Long Phan is committed to supporting you with a team of experienced experts in the field of commerce. Contact Long Phan immediately via the hotline: 0906735386 for detailed advice.
Note: The content of the articles published on the website of Long Phan Investment Consulting Company is for reference only regarding the application of legal policies. Depending on the time, subject, and amendments, supplements, and replacements of legal policies and legal documents, the consulting content may no longer be appropriate for the situation you are facing or need legal advice on. In case you need specific and in-depth advice according to each case or incident, please contact us through the methods below. With our enthusiasm and dedication, we believe that Long Phan will be a reliable solution provider for our clients.
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