International Trade Transaction - : Passing of Risk from the Seller to the Buyer uder Sea Carriage

Abstract The concept of risk under sea carriage is an important subject under sales law. This due to the fact that when goods are handed over from the seller to a carrier, neither the seller nor the buyer has physical control over the goods while in transit Risk under sales law deals with who bears the risk of goods damaged or loss without fault on the part of the parties to the sales contract. Risk under the sea carriage therefore has to do with who bears the ultimate responsibility in circumstances of loss or damage to the goods while in transit. Usually the parties under the sales contract contemplate on insurance to cover such losses. However, it is important to establish whether it is the seller or the buyer who has a claim against the carrier or insurer. I chose the concept of risk under sea carriage because coming from a developing country where raw materials are exported and finished products imported, trade is vital to the economic growth of the country. As bulk cargoes are mainly transported by sea, risk under sea carriage cannot be overlooked. Therefore, it is important to understand how trade partners allocate risk among themselves especially after each has fulfilled his contractual obligation and a carrier who is not a party to the transaction has to convey the goods to the buyer. To get a clear understanding of the concept of risk under sea carriage, I chose to look at the transaction based on a contract where the seller has to get the goods, arrange for the transport and insurance (CIF) and found out that the contract of sale, finance, contract of carriage and contract of insurance are inter-dependant in an international trade transaction.