Shipment Contract Law and Legal Definition

In a shipment contract, a seller shall bear the risk of damage to the items sold only until they are brought to the place of shipment. If the terms of delivery are not addressed in a contract, then such a contract is considered as a shipment contract. A shipment contract is a contract that requires or authorizes the seller to send the goods to the buyer but does not require that he deliver them at any particular destination. Generally, in shipment contracts, risk of loss passes to the buyer at the point of shipment, which is also the point of ‘delivery.’