The Impact of Contract of Carriage of Goods Sold on Passing of Risk in Accordance with INCOTERMS Rules

Abstract

Under the most legal systems, the sale contract transfers the ownership and the buyer owns the subject matter of the contract and the seller owns the price paid to him immediately upon the conclusion of the contract, but because the buyer’s ultimate purpose is to receive the subject matter and be able to possess it proprietarily, not merely the ownership being transferred to him. So the question arises that in case of loss of specific goods without the buyer’s fault before the goods being delivered to him, the seller remains liable for the loss or the buyer? A more difficult issue is the sale of goods embodying the contract of carriage. In this case, can you say that the carrier is liable for damage or loss? Because of the extensive use of certain forms of contract under the rules of INCOTERMS in international trade and the limited use of it in internal trade, to sell the goods that are required to carry them from one place to another, then necessarily those questions mentioned above should be answered in relation to the INCOTERMS rules during a separate study. In addition, the comparative analysis of the INCOTERMS rules in association with the Iran’s law and the Vienna Convention on the international sale of goods could also be useful. The results of this study indicate that unlike Iran’s law that transferring the risk of loss of goods requires the delivery of them, but according to the UN Convention on the Contracts for International Sale of Goods, the risk of loss of the goods before being delivered may passes to the buyer. Under the INCOTERMS rules, since the carriage of goods sold accompanies various issues and any failure during the carriage may results in the delay in delivery of goods and passing of risk, it has been tried to prevent from the issues arising unreasonably.