What Is Transfer of Risk?

Risk transfer refers to a risk treatment method in which risk is transferred to another person or unit through a contract or non-contractual method. Risk transfer is the transfer of the burden of loss caused by risks. In international goods trading, it means that the risk of the goods originally borne by the seller is changed to the buyer at some point. In the absence of agreement by the parties, the main issue of risk transfer is when the risk is transferred from the seller to the buyer.

Risk transfer

1. Delivery directly to the buyer, after the delivery is borne by the buyer.
2. The subject matter is transported by a third party-delivery to the first carrier, that is, for the delivery (including the seller's consignment, which is deemed to be the delivery by the first carrier) shall be borne by the buyer.
3. Easy delivery-When the contract comes into effect, it is deemed to be delivered, and the subsequent risk responsibility is borne by the buyer.
4. Sale and purchase of the subject matter in the way-when the contract takes effect, the risk is transferred; if the subject matter has been damaged or lost before the contract takes effect, the seller will bear it.
5. One party defaults first-the defaulting party bears.

The seller refuses to accept the delivery if the buyer fails to accept the goods the seller assumes it; The buyer does not receive the goods in breach of the contract the buyer assumes it.

Risk transfer special risk issues

Special contract risk issues-Ownership 1. Borrowing, leasing, storage, pledge contract: Ownership 2. Trial sale: During the trial period, it belongs to the seller; When the trial period expires, it does not buy, it belongs to the seller

Risk transfer basis

This question is the one with the most practical value, and it is also a controversial theoretical question. Some scholars combine risk transfer with the conclusion of a contract, that is, establishmentism ; some scholars combine risk transfer with the transfer of ownership of goods, that is, ownershipism ; and some scholars combine risk transfer with the delivery of goods. That is deliveryism . Each theory affects legislative and judicial practice. For example, modern Swiss law and Roman law adopt legislative doctrine. British law and French law adopt proprietaryism based on the so-called "owner bears risk." Principles of the United States, Germany, Austria, and China The Contract Law uses the delivery time of the goods to determine the time of risk transfer, and adopts deliveryism . In comparison, it is more reasonable and wise to determine the risk transfer time by the delivery time of the goods and the risk transfer time by the transfer of the ownership of the goods. Because the transfer of ownership is an abstract, elusive, or even difficult to prove problem. Moreover, the transfer of ownership is inconsistent with the actual possession of the goods. In the case that the goods have not been transferred, but the goods have actually been delivered, it is not only unreasonable but also unfair to bear responsibility for the risk of damage and loss of the goods to the party who has lost the actual possession and control of the goods, which is not conducive to trading development of. Therefore, the modern rules of buying and selling goods and the opinions of most scholars use the delivery time to determine the risk transfer time, and do not use the moment of the ownership of the goods to determine the risk transfer time. According to the "Contract Law" of the People's Republic of China, "General Principles of Civil Law" and related interpretations: the risk transfer of the subject matter adopts deliveryism; that is, movable property --- delivery, real property --- delivery = possession .

Article 142 of the Contract Law The risk of damage to or loss of the subject matter shall be borne by the seller before the delivery of the subject matter and shall be borne by the buyer after the delivery, unless otherwise provided by law or otherwise agreed by the parties.

Article 143 Where the subject matter cannot be delivered within the agreed time limit due to reasons of the buyer, the buyer shall bear the risk of damage or loss of the subject matter from the date of violation of the agreement.

Article 144 The seller sells or sells the objects in transit that are transported by the carrier. Unless otherwise agreed by the parties, the risk of damage or loss shall be borne by the buyer from the time the contract is concluded.

Article 145 If the parties have not agreed on the place of delivery or the agreement is not clear, if the subject matter needs to be transported in accordance with the provisions of Paragraph 2 (1) of Article 141 of this Law, the seller shall deliver the subject matter to the first After the carrier, the risk of damage to or loss of the subject matter shall be borne by the buyer.

Article 146 The seller shall place the subject matter at the place of delivery in accordance with the agreement or in accordance with the provisions of the second paragraph of Article 141 of this Law. If the buyer fails to collect it in violation of the agreement, the subject matter is damaged, The risk of loss shall be borne by the buyer from the date of breach of the agreement.

Article 147 If the seller fails to deliver the documents and materials related to the subject matter in accordance with the agreement, it shall not affect the transfer of the risk of damage or loss of the subject matter.

Article 148 If the quality of the subject matter does not meet the quality requirements and the contract purpose cannot be achieved, the buyer may refuse to accept the subject matter or terminate the contract. If the buyer refuses to accept the subject matter or terminates the contract, the risk of damage or loss of the subject matter shall be borne by the seller.

Article 149 Where the risk of damage to or loss of the subject matter is borne by the buyer, it does not affect the right of the buyer to claim liability for breach of contract because the seller's performance of the debt does not comply with the agreement.

Interpretation of the Supreme People's Court on Several Issues concerning the Application of Law in the Trial of Disputes over Contracts for the Sale of Commercial Houses Article 11 The transfer of possession of a house shall be deemed as the delivery of the house, unless the parties agree otherwise.

The risk of house damage and loss shall be borne by the seller before delivery and use, and shall be borne by the buyer after delivery and use; if the buyer receives the seller's written notice of delivery, and refuses to accept it without a valid reason, the house is at risk of damage or loss The buyer shall assume the date of delivery and use as determined in the written notice of delivery, unless otherwise provided by law or otherwise agreed by the parties.