Simple Guides

At what point does the risk pass from me (the seller) to the purchaser?

Risk, in terms of loss, is the responsibility a carrier, borrower, user/purchaser of property or goods assumes if there is damage or loss. Passing of Risk means the point at which the buyer will be responsible for the goods. For example, if goods are delivered by lorry, who bears the loss if the goods are stolen in transit before they reach the purchaser?

This issue arises just as much within your own jurisdiction as in a cross-border context and is covered by the Sale of Goods legislation, which is broadly similar in both jurisdictions. It can (and should) also be covered by your written contract.

Normally, in the absence of a written contract stating something different, where the seller arranges delivery to the purchaser, risk will only pass to the purchaser on receipt of delivery. In a cross-border sale, this may therefore mean that risk would only pass to the buyer when he receives the goods in Ireland. Often, the contract will define at which point risk passes. A seller (who generally draws up the contract) will however want to ensure that risk passes at the earliest point.

In a cross-border context, you may want to consider appointing a Distributor based in Ireland to ensure that risk passes to the Distributor. That is, the risk passes to him once goods are collected from your premises in Northern Ireland.