International transports, delivery of goods and passage of risk: 3 mistakes to avoid

Luca Davini
Avvocato in Milan and Turin

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In the context of international trade, with partners who speak different languages, who often operate in distant markets, not only with reference to the geographical location but also to the uses, customs and culture, it has gradually become necessary to share tools universally known and recognized with the purpose of agreeing with a high degree of certainty the methods of transport and return of the goods.

It is therefore necessary to focus on the need to identify within an international sales contract, as well as in a distribution one, with absolute certainty, the delivery time of the goods and the moment of the passage of risk, thus avoiding making mistakes which very often end up jeopardizing the success of the operation.

The first mistake not to be committed in the context of the negotiation of an international sales – or distribution – contract consists in not defining with absolute certainty the time of delivery of the goods, as on the contrary it would be necessary to indicate, for example, the date or the period of time determined or determinable according to the contract within which fulfill this obligation.

In fact, in the absence of specific agreements, in the highly probable case in which the contract is governed by the Vienna Convention, the seller will be required to deliver the goods “within a reasonable time from the conclusion of the contract”.

It is clear that the indeterminacy of this moment and the consequent discretion of the judge eventually called to establish it, contain in themselves a high risk of achieving unexpected results and most of the time unwelcome to the Italian exporter.

In this regard, it is also desirable, and here we come to the second mistake not to commit, to define in the contract whether the deadline set for the delivery of the goods is of essential value or not and if the failure to comply can justify the termination of the contract for non-fulfillment, or if it is a valid reason for a request for compensation for any damage caused by the failure or late delivery of the goods, in order to avoid long and costly disputes on this point.

The third mistake not to be committed concerns the issue of passing the risk: it is in fact fundamental for the parties to the contract, seller and buyer, to be able to rely on a complete knowledge of the law to which they will have to refer when they find themselves in the situation of having to identify the place and the moment in which the transfer of charges and risks – relating to the delivery of the goods from the country of departure to the country of destination – takes place.

For example, again with reference to the Vienna Convention, it is good to remember that if the seller undertakes to return the goods to the buyer or transporter in a specific place, the risk passes at that time, while if the sale does not involve transport, or the buyer must collect the goods from the seller, the risk passes with the delivery to the buyer.

In this second case, the buyer who does not take delivery of the goods bears the risk of loss or damage to the goods when they are placed at his disposal.

From this information it is immediately evident that the drafting of a complete and coherent international contract, with reference to these multiple risks, is of fundamental importance, in order to guarantee the safe conclusion of the deal.

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