Who Bears the Risk of Loss in Transit? NY UCC Explained
- Reza Yassi
- Oct 29, 2024
- 21 min read
Updated: May 15
Who Bears the Risk? Understanding Risk of Loss Under NY UCC
When goods are sold and shipped, one critical question arises: Who is responsible if the goods are lost or damaged during transit? The answer depends on the shipping terms agreed upon by the parties, as outlined in the New York UCC.
Understanding UCC §§2-509 and 2-510:
Risk of Loss:
Refers to the responsibility for goods that are lost, damaged, or destroyed during shipment.
Shipping Terms Define Risk Allocation:
Shipment Contracts (FOB Shipping Point):
Definition: Seller is required to ship the goods, but not deliver them to a specific destination.
Risk Transfer: Risk of loss passes to the buyer when the goods are delivered to the carrier.
Example: Once the seller hands over the goods to FedEx, the buyer assumes the risk.
Destination Contracts (FOB Destination):
Definition: Seller must deliver the goods to a specified destination.
Risk Transfer: Risk of loss remains with the seller until the goods are tendered at the destination.
Example: The seller is responsible until the goods arrive at the buyer's warehouse.
Importance for Merchants:
Contract Clarity:
Clearly specifying shipping terms in the contract avoids confusion and disputes.
Insurance Considerations:
Knowing when the risk transfers helps in deciding who should insure the goods during transit.
Financial Protection:
Understanding risk allocation prevents unexpected losses.
Key Takeaways:
Always specify shipping terms (FOB Shipping Point or FOB Destination) in your contracts.
Be aware of when the risk of loss transfers to plan accordingly.
Consider obtaining appropriate insurance to cover potential risks during transit.
Disclaimer:
This article is for informational purposes only and does not constitute legal advice. Although I am an attorney, I am not your attorney, and reading this article does not create an attorney-client relationship. For advice pertaining to your specific situation, please consult a qualified attorney licensed in your area.
The Full Statutory Framework: NY UCC §§2-509, 2-510, and Beyond
New York has adopted the Uniform Commercial Code in its entirety, and Article 2 governs the sale of goods from contract formation all the way through breach and remedies. When goods are damaged, stolen, or destroyed in transit, the statutory framework that controls your rights is more layered than a simple FOB clause. Understanding the full picture is critical before you decide whether to pursue a claim against a seller, a carrier, or both.
Under UCC §2-509, the default rules for risk of loss depend entirely on whether the contract is a shipment contract or a destination contract. But §2-509 is not the end of the analysis. UCC §2-510 is the provision that plaintiffs and their attorneys often overlook — and it is enormously powerful. Section 2-510 shifts the risk of loss back onto a breaching party even when the contract terms would otherwise place the risk on the buyer.
Here is how §2-510 works in practice:
Seller's Breach — Nonconforming Goods: If a seller tenders goods that do not conform to the contract, the risk of loss remains on the seller until the defect is cured or the buyer accepts the goods. This means that if your supplier shipped defective merchandise that was then lost in a warehouse fire, the supplier — not you — bears that loss.
Buyer's Breach — Repudiation or Revocation: If a buyer repudiates or wrongfully revokes acceptance of conforming goods, the risk of loss shifts to the buyer for a commercially reasonable time, to the extent the seller's insurance does not cover the loss.
Revocation of Acceptance: Under UCC §2-608, a buyer who rightfully revokes acceptance of goods may treat the risk of loss as having rested on the seller from the beginning.
New York courts have consistently applied these provisions in commercial disputes. The New York Appellate Division, First Department, has recognized that the risk-shifting provisions of §2-510 are intended to penalize the breaching party and incentivize contract compliance. When a seller knowingly ships nonconforming goods and those goods are subsequently damaged, the seller cannot hide behind an FOB Shipping Point clause to escape liability.
Additionally, UCC §2-319 governs the specific meaning of FOB terms. It is not enough to simply write "FOB" in a contract — the parties must specify whether it is FOB the place of shipment or FOB the named destination point. Ambiguity in this language is frequently litigated, and New York courts will construe ambiguous shipping terms against the drafter under general contract principles rooted in common law and reinforced by CPLR §3016 when fraud or misrepresentation accompanies the transaction.
Finally, do not overlook UCC §7-309, which governs the liability of carriers who issue bills of lading. A carrier that issues a negotiable bill of lading and then loses or damages the goods may be independently liable — separate and apart from the seller's or buyer's risk allocation under the sales contract. This creates multiple potential defendants, which is exactly how aggressive commercial litigation should be structured.
What Happens When Goods Are Damaged in Transit: Damages, Valuation, and Real Legal Strategies
Knowing who bears the risk of loss is only the first step. The next question is how much you can recover, and under what legal theories. New York law provides several overlapping remedies for buyers and sellers, and a skilled litigation attorney will pursue all available avenues simultaneously.
Buyer's Remedies Under UCC Article 2
If you are a buyer who received damaged goods — or no goods at all — and the risk of loss remained with the seller at the time of loss, your remedies under UCC §2-711 and §2-714 include:
Cover damages: The difference between the cost of substitute goods purchased on the open market and the original contract price, under UCC §2-712.
Market price damages: If you did not cover, the difference between the market price at the time of breach and the contract price, under UCC §2-713.
Consequential damages: Lost profits, lost business opportunities, and other foreseeable downstream losses caused by the seller's failure to deliver conforming goods, under UCC §2-715.
Incidental damages: Costs you incurred in inspecting, rejecting, and mitigating the loss.
Valuation of the damaged goods is often contested. New York courts use the fair market value of the goods at the time and place of delivery as the primary benchmark. However, where goods are unique, custom-manufactured, or have a specialized commercial purpose, courts have accepted alternative valuation methodologies including replacement cost, lost resale value, and expert appraisal testimony. Do not allow a defendant to low-ball your damages with a generic market-price argument when your specific goods had a demonstrably higher commercial value.
Carrier Liability Under Federal and State Law
Where a common carrier — a trucking company, freight forwarder, or rail carrier — is responsible for the loss or damage, federal law under the Carmack Amendment (49 U.S.C. §14706) may preempt state law claims and establish a strict liability framework for interstate shipments. Under Carmack, a carrier is liable for the actual loss or injury to the property unless it can prove one of five common law exceptions: an act of God, the public enemy, the shipper's own fault, a public authority, or the inherent vice of the goods.
For intrastate shipments entirely within New York, state common carrier liability rules apply, and New York courts have held that carriers owe a high duty of care to the goods entrusted to them. A carrier cannot contractually limit its liability below the actual value of goods unless the shipper was given a meaningful choice of rates tied to declared value — a requirement that many carriers routinely ignore in their standard form contracts.
Common Defenses and How to Defeat Them
Sellers and carriers raise predictable defenses in transit loss cases. Here is what to expect — and how to counter each one:
"The contract was FOB Shipping Point, so it's your problem." Counter: Invoke UCC §2-510. If the goods were nonconforming in any respect at the time of shipment, the risk never left the seller. Demand inspection records, packing slips, and prior quality complaints.
"The loss was caused by an act of God or force majeure." Counter: Force majeure clauses are construed narrowly under New York law. The New York Court of Appeals has held that a party invoking force majeure must prove that the specific event was unforeseeable and that the event — not the party's own negligence — was the proximate cause of the loss. See Kel Kim Corp. v. Central Markets, Inc., 70 N.Y.2d 900 (1987), where the Court of Appeals affirmed that force majeure clauses excuse performance only when the event renders performance objectively impossible, not merely more difficult or expensive.
"You failed to mitigate your damages." Counter: Document every step you took after learning of the loss — alternative sourcing, carrier communications, insurance claims, and internal cost tracking. Mitigation is a burden-shifting defense; once you demonstrate reasonable efforts, the defendant must prove you failed to take a specific step that would have reduced the loss.
"Your claim is time-barred." Counter: Under UCC §2-725, the statute of limitations for breach of a contract for the sale of goods is four years from the date of breach. For carrier claims under Carmack, the period may be shortened by contract, but only to a minimum of nine months for filing a claim and two years for filing suit. Know your deadlines and do not let a carrier's fine print strip you of your rights.
Hypothetical Scenarios: How These Rules Play Out in Real New York Disputes
Abstract legal rules become clearer — and more actionable — when applied to the kinds of disputes that actually arise in New York's commercial marketplace.
Scenario 1: The Brooklyn Electronics Distributor
A Brooklyn-based electronics distributor contracts with a New Jersey manufacturer to purchase 500 units of consumer electronics under a contract specifying "FOB Seller's Warehouse." The manufacturer hands the shipment to a trucking company, which subsequently loses the entire load in a warehouse fire at its facility in the Bronx. The manufacturer argues that risk passed to the buyer when the goods were handed to the carrier.
Under UCC §2-319(1)(a), "FOB Seller's Warehouse" is a shipment contract, meaning risk of loss passed to the buyer upon delivery to the carrier. The buyer is responsible — unless the buyer can demonstrate that the goods were nonconforming at the time of shipment, triggering §2-510. The buyer should immediately demand pre-shipment inspection reports, quality control documentation, and any prior communications about the goods' condition. A single email confirming defects before shipment can transform a losing case into a winning one.
Scenario 2: The Manhattan Restaurant Supply Chain Dispute
A Manhattan restaurant signs a contract with a food supplier for weekly deliveries of fresh seafood, specifying "FOB Restaurant" — a destination contract. The supplier's delivery truck is involved in an accident on the FDR Drive, destroying the entire load. The supplier demands payment for the destroyed goods, arguing the buyer bears the risk because the buyer is a merchant.
The supplier is wrong. Under a destination contract governed by UCC §2-509(1)(b), risk of loss remains with the seller until the goods are tendered at the named destination. The accident occurred before tender at the restaurant. The seller bears the loss. The restaurant owes nothing for the destroyed shipment and may seek cover damages for the cost of sourcing substitute seafood on short notice, plus any consequential losses such as cancelled reservations and lost revenue — all recoverable under UCC §2-715 if properly documented.
Scenario 3: The Queens Garment Manufacturer and Rightful Rejection
A Queens garment manufacturer orders a custom dye lot from an overseas supplier shipped through a New York freight forwarder. The goods arrive, the buyer inspects them, and discovers the color does not match the contract specification. The buyer rightfully rejects the goods under UCC §2-601. Three days later, the warehouse storing the rejected goods floods. Who bears the loss?
Under UCC §2-510(1), because the seller tendered nonconforming goods, the risk of loss remains on the seller regardless of the FOB terms in the contract. The flooding loss falls on the seller. The buyer should promptly notify the seller of both the rejection and the flood damage, preserve all inspection records and photographs, and initiate a formal breach of contract claim seeking the return of any prepayment plus consequential damages for production delays.
Frequently Asked Questions
If my contract says "FOB Shipping Point," am I completely out of luck if goods are damaged during shipping?
Not necessarily. While FOB Shipping Point generally shifts the risk of loss to the buyer once the seller hands goods to the carrier, UCC §2-510 creates a critical exception: if the goods were nonconforming — meaning they failed to meet the contract's specifications — at the time of shipment, the risk of loss never legally left the seller. You should immediately investigate the condition of the goods before and at the time of shipment. Demand production records, shipping inspection certificates, and any quality assurance documentation. A commercial litigation attorney can issue pre-litigation document demands and, if necessary, pursue discovery to build this case.
Can I sue both the seller and the shipping company if my goods are lost in transit?
Yes, and in most cases you should. The seller and the carrier are potentially liable under different legal theories. The seller may be liable under the UCC if the risk of loss remained with them or if they breached the contract in another way. The carrier may be independently liable under the Carmack Amendment for interstate shipments, or under New York common carrier liability rules for intrastate shipments. Structuring your claim against multiple defendants maximizes your recovery and creates settlement pressure that targeting a single party does not. An experienced commercial litigation attorney will identify all potentially liable parties from day one.
How long do I have to file a lawsuit for goods lost or damaged during shipping in New York?
The statute of limitations depends on your legal theory. For a breach of contract claim under the UCC, you generally have four years from the date of breach under UCC §2-725. For claims against a common carrier under the Carmack Amendment, the minimum period for filing a civil action is two years from the date the carrier gives written notice that it has disallowed any part of the claim. However, many carrier contracts contain shorter notice and claim-filing deadlines — sometimes as brief as nine months — and failure to comply with these deadlines can bar your claim entirely. Do not wait. Contact an attorney as soon as the loss occurs.
What evidence do I need to prove my risk of loss claim in a New York court?
The most critical evidence includes: (1) the written sales contract, including all FOB and shipping terms; (2) the bill of lading or freight receipt showing when and where the goods were transferred to the carrier; (3) any inspection reports or certificates of conformity issued at the time of shipment; (4) photographs of the goods before shipment and upon arrival; (5) written communications between the parties about the goods' condition; (6) insurance certificates showing who insured the goods and for what period; and (7) invoices, purchase orders, and any prior course of dealing between the parties. The stronger your documentary record, the harder it is for the opposing party to contest when risk transferred and whether the goods were conforming.
My supplier is based outside of New York. Which state's law applies to my dispute?
When both parties are merchants and the transaction involves the sale of goods, the UCC applies in every state, so the substantive rules are largely uniform. However, choice-of-law provisions in your contract may designate a specific state's version of the UCC to govern disputes. New York courts apply a "grouping of contacts" analysis under CPLR §202 and New York common law conflicts principles when no choice-of-law clause exists. In practice, where the goods were to be delivered in New York and the buyer is a New York entity, New York law will almost certainly apply. This is important because New York courts have a well-developed body of UCC case law and experienced commercial judges who understand these disputes — making New York a favorable forum for well-prepared plaintiffs.
Speak With a NYC Litigation Attorney
Risk of loss disputes move fast. Goods are damaged, carriers issue denials, sellers point fingers at each other, and critical evidence disappears. If your business has suffered a loss from goods damaged or destroyed in transit — whether you are a buyer who received nothing, a seller trying to enforce payment, or a merchant caught in the middle of a supply chain dispute — you cannot afford to wait and hope the other side does the right thing. The New York UCC gives you powerful rights, but only if you move quickly and strategically. At Yassi Law, we represent businesses and individuals throughout New York City in commercial litigation, contract disputes, and transit loss claims. We are aggressive, we know the law, and we are ready to fight for every dollar you are owed. Call us today at 646-992-2138.
The Full Statutory Framework: What New York UCC §§ 2-509 and 2-510 Actually Say
Most clients who come to us after a shipping dispute have one thing in common: they never read the fine print in their sales contract. The New York Uniform Commercial Code does not leave risk allocation to chance — but it does require you to know exactly where to look. If you are dealing with a loss right now, understanding the full statutory framework is the first step toward protecting your financial interests.
Under New York UCC § 2-509, risk of loss in the absence of breach follows a strict hierarchy. The statute sets out three distinct scenarios:
Carrier Contracts: When a contract requires or authorizes the seller to ship goods by carrier, risk passes to the buyer when the seller delivers the goods to the carrier — but only if it is a shipment contract. If the contract requires delivery to a particular destination, risk does not pass until the goods are tendered there and the buyer has a reasonable opportunity to inspect them.
Goods Held by Bailee: When goods are held by a bailee — such as a warehouse — and are to be delivered without being moved, risk passes when the buyer receives a negotiable document of title, when the bailee acknowledges the buyer's right to possession, or when the buyer receives a non-negotiable document of title or other written direction to deliver.
All Other Cases: If the seller is a merchant, risk of loss does not pass until the buyer actually takes physical possession of the goods. If the seller is a non-merchant, risk passes upon tender of delivery. This distinction matters enormously in New York commercial disputes, because most businesses qualify as merchants under UCC § 2-104.
New York UCC § 2-510 adds another critical layer: when there is a breach, the normal risk allocation rules get flipped. If a seller tenders goods that are so nonconforming that the buyer has the right to reject them, the risk of loss remains with the seller until cure or acceptance. Conversely, if a buyer who already bears the risk repudiates the contract or breaches before risk has passed, the seller can treat the risk as resting on the buyer for a commercially reasonable time — to the extent not covered by the seller's insurance. This is a powerful litigation tool that plaintiffs' attorneys routinely use to shift financial responsibility back onto the party that caused the problem in the first place.
The interplay between §§ 2-509 and 2-510 means that a simple question — "who bears the loss?" — can quickly become a complex factual and legal inquiry. If you have suffered a loss and the other side is pointing fingers, do not accept their interpretation at face value. You can review a broader overview of these rules in our post on Who Bears the Risk of Loss in Transit? NY UCC Explained.
How New York Courts Have Decided Risk of Loss Disputes: Key Principles and Case Guidance
New York courts have developed a body of case law interpreting the UCC's risk of loss provisions that every commercial plaintiff should understand before walking into a negotiation or a courtroom. While the New York Court of Appeals has not issued sweeping pronouncements on every aspect of § 2-509, the Appellate Division — particularly the First and Second Departments — has addressed these disputes in ways that give real guidance.
The Merchant Standard Changes Everything
New York courts have consistently held that when a seller is a merchant, the seller retains the risk of loss until actual physical delivery. This is not a technicality — it is a substantive rule that protects buyers who rely on the seller's professional responsibility to ensure safe delivery. In commercial transactions between New York businesses, both parties are almost always merchants, which means risk does not transfer simply because the seller hands goods off to a carrier under a destination contract. Courts look closely at the shipping terms, but they also look at the parties' course of dealing, usage of trade, and any representations made about delivery obligations.
The Role of FOB Terms Under New York Law
New York courts apply UCC § 2-319 in conjunction with § 2-509 when interpreting FOB terms. "FOB Shipping Point" language shifts risk to the buyer at the moment of carrier delivery, but courts have found that such terms must be unambiguous. Ambiguous or inconsistent contract language is construed against the drafter — which in most commercial sales contracts means the seller. If your contract uses loose language like "shipped at buyer's risk" without specifying FOB terms, a New York court may well find that the risk never transferred. This is exactly the kind of argument that can mean the difference between recovering your full loss and walking away with nothing.
Breach Reallocates Risk: The § 2-510 Weapon
The First Department has recognized that § 2-510 operates as an exception to the standard risk allocation rules precisely because it would be inequitable to allow a breaching party to escape financial responsibility for losses caused during a period of their own wrongdoing. If a seller ships nonconforming goods — goods that do not match the contract description, are defective, or arrive damaged due to the seller's improper packaging — and the buyer rightfully rejects them, the seller cannot hide behind "FOB Shipping Point" language. The risk never left the seller. This principle has significant implications for businesses that receive damaged or incorrect shipments and are then pressured by sellers to file insurance claims on their own policies.
If you believe you received nonconforming goods and were wrongly told to bear the loss, the legal framework discussed in our post on Who Bears the Risk of Loss in Transit? NY UCC Explained is directly relevant to your situation and should be reviewed with counsel immediately.
Practical Steps to Protect Yourself: Before, During, and After a Shipping Loss
Whether you are a buyer or a seller, the time to protect yourself from a risk of loss dispute is before the goods ever leave the warehouse — not after they arrive damaged or fail to arrive at all. Here is what aggressive, proactive businesses do to minimize exposure and maximize their ability to recover when things go wrong.
Before the Shipment: Contract Drafting Is Everything
Specify FOB terms explicitly. Do not use vague language. State whether the contract is FOB Shipping Point or FOB Destination. If you are the buyer, push for FOB Destination terms so the seller retains risk until delivery.
Address insurance obligations directly. Your contract should state who is required to maintain cargo insurance, in what amount, and who is named as a beneficiary. Under New York law, failing to insure goods you are required to protect can expose you to liability beyond the loss itself.
Include a right to inspect upon delivery. Under UCC § 2-513, a buyer has the right to inspect goods before acceptance. Your contract should spell out inspection procedures so that you can document nonconformity and preserve your rights under § 2-510 if needed.
Document the condition of goods at shipment. Photographs, signed condition reports, and third-party inspection certificates create a contemporaneous record that courts find compelling. If the goods leave the seller's facility in damaged condition, you want proof that the damage predated the carrier's involvement.
During Transit: What to Do When Something Goes Wrong
Notify all relevant parties immediately. Under UCC § 2-607, a buyer who accepts goods must notify the seller of any breach within a reasonable time or lose any remedy. Even if you have not yet formally accepted the goods, prompt written notice to the seller, carrier, and your insurer preserves your legal options.
Do not dispose of damaged goods without documentation. Courts and insurers need evidence. Premature disposal of damaged goods can be treated as spoliation — the destruction of evidence — which can severely damage your case under New York CPLR rules and applicable case law.
Reject nonconforming goods formally and in writing. Under UCC § 2-602, rejection must occur within a reasonable time and must be communicated to the seller. A written rejection letter, sent by certified mail and email, creates the paper trail you need to invoke § 2-510 and keep the risk squarely on the seller.
After a Loss: Damages and Valuation
New York UCC § 2-714 governs damages for accepted goods that turn out to be nonconforming. The measure of damages is the difference between the value of the goods as accepted and their value as warranted — plus any consequential and incidental damages allowed under § 2-715. In shipping loss cases, consequential damages can include lost profits, lost business opportunities, and costs incurred because substitute goods had to be obtained at higher prices. These are real damages that New York courts award, and they can dwarf the contract price of the goods themselves.
If the goods were never delivered at all, § 2-713 provides the buyer with the difference between the market price at the time of breach and the contract price, plus incidental and consequential damages. Do not let the other side convince you that your recovery is limited to the invoice value of the lost shipment. Under New York law, you may be entitled to significantly more. The principles underlying these damages claims connect directly to the risk allocation rules we discuss in our guide on Who Bears the Risk of Loss in Transit? NY UCC Explained.
Common Defenses Sellers Raise — and How to Beat Them
When buyers come to us after a shipping loss, they have often already heard the seller's defenses. Knowing these arguments in advance — and how New York law defeats them — puts you in a far stronger negotiating and litigation position.
"The FOB Shipping Point Clause Covers Us"
This is the seller's favorite defense. They point to the contract language and argue that risk transferred the moment goods were handed to the carrier. The counterattack: Was the contract language truly unambiguous? Did the seller pack the goods properly? Did the seller choose a reputable carrier as required by UCC § 2-504? If the seller failed to make a reasonable contract for transportation — or failed to notify the buyer promptly so insurance could be obtained — the risk does not transfer cleanly even under an FOB Shipping Point clause. Section 2-504 explicitly provides that such failures by the seller can constitute a breach giving the buyer grounds to reject.
"You Should Have Bought Insurance"
This argument is legally irrelevant if the risk of loss had not yet transferred to the buyer. The fact that a buyer could have purchased insurance does not shift the risk if the UCC and the contract place it on the seller. More importantly, if the seller was required by contract to maintain insurance and failed to do so, that failure may give rise to a separate breach of contract claim entirely.
"The Carrier Is Responsible, Not Us"
This defense conflates two separate legal issues. The carrier's liability to the seller under the bill of lading is a separate question from the seller's liability to the buyer under the sales contract. Even if the carrier is ultimately responsible for the physical loss, the buyer's immediate legal claim is against the seller if risk had not yet transferred. The seller then pursues the carrier. A buyer should never be left holding the bag while the seller and carrier point fingers at each other. New York courts have been clear that the party bearing the risk under the UCC is the party who must make the buyer whole — whatever indemnification rights that party may have against the carrier are a separate matter.
Frequently Asked Questions
If my goods were damaged during shipping and the seller says it's my problem, what are my rights under New York law?
Your rights depend on the shipping terms in your contract. If the contract was an FOB Destination agreement, the seller retained the risk of loss until delivery to your location, and you have a strong breach of contract claim under New York UCC § 2-509. Even under FOB Shipping Point terms, if the goods were nonconforming — meaning they did not match what was ordered — § 2-510 keeps the risk on the seller until you accept the goods. You should document the damage immediately, send written notice of rejection or nonconformity, and contact a New York commercial litigation attorney before communicating further with the seller.
Can I sue the shipping carrier directly in New York if my goods were lost or destroyed in transit?
Yes, but the legal framework depends on whether the shipment was domestic or interstate. For interstate shipments, federal law under the Carmack Amendment governs carrier liability, which limits certain damages and preempts some state law claims. For intrastate New York shipments, you may have claims under state law directly against the carrier. However, whether you have standing to bring that claim — as opposed to the seller — depends on who bore the risk of loss at the time of the damage. If risk had transferred to you as the buyer, you likely have a direct claim against the carrier. If not, the seller must bring that claim. An attorney can help you determine the correct party and theory of recovery based on your specific facts.
What does "FOB" actually mean on a sales invoice, and does it matter in a New York lawsuit?
FOB stands for "Free On Board" and it is one of the most consequential terms in any sales contract involving shipped goods. Under New York UCC § 2-319, "FOB Shipping Point" means the seller fulfills its obligations — and risk transfers to the buyer — when goods are delivered to the carrier at the point of shipment. "FOB Destination" means the seller remains responsible until goods arrive at the named location. In a New York lawsuit, these terms are often the central factual and legal issue in the entire case. Courts look at the full contract, including invoices, purchase orders, and any prior course of dealing between the parties, to determine what the parties actually agreed to. Do not assume the term on a single invoice controls the outcome.
My business received a shipment with missing items. The seller says it's a carrier issue. Who do I go after first in New York?
Go after the seller first if the risk of loss had not transferred at the time of the shortage. Under New York UCC § 2-509, if the seller bore the risk — either because it was a destination contract or because the seller is a merchant who never completed delivery — the seller is obligated to make you whole. The seller can then pursue the carrier for indemnification. In practice, many sellers try to deflect buyers directly to carriers to avoid liability. Do not fall for this. Assert your UCC rights against the seller in writing immediately, preserve all documentation, and consult an attorney who handles New York commercial disputes. Time limits matter: New York's four-year statute of limitations for UCC breach of contract claims under CPLR § 213 runs from the date of breach, not from when you discover the problem.
Can I recover lost profits if goods damaged in transit were supposed to be resold to my own customers?
Yes, in many cases you can. New York UCC § 2-715 allows buyers to recover consequential damages — including lost profits from downstream sales — if the seller had reason to know at the time of contracting that you intended to resell the goods and that a failure to deliver would result in lost business. The seller cannot claim surprise if you are a retailer, distributor, or any business whose entire model involves reselling purchased inventory. You must be prepared to document your anticipated profits with reasonable certainty — courts do not award speculative damages, but they do award damages proven by business records, prior sales history, and market data. This is an area where having aggressive legal representation makes a measurable financial difference in what you recover.
Speak With a NYC Litigation Attorney
Risk of loss disputes can result in significant financial harm to businesses and individuals who do not understand their rights under the New York UCC. Whether you are a buyer who received damaged goods, a seller facing a wrongful breach of contract claim, or a business owner trying to figure out who is responsible for a shipment that never arrived, you need a New York attorney who will fight for your interests — not a passive one who tells you to file an insurance claim and move on. At Yassi Law, we represent clients aggressively in commercial disputes, contract litigation, and business injury claims throughout New York City. Do not let the other side's lawyers define the narrative. Call us today and get the answers you need: 646-992-2138
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