## Facts

- A Mexico resident contracted through an authorized representative to buy 64 electronic watches from a Florida exporter for $6,006, paying a 25% deposit.
- The written invoice (in Spanish) instructed the seller to send the merchandise by air parcel post to Chetumal and route documents to a specified bank.
- The contract did not include risk-of-loss language or delivery terms such as F.O.B., F.A.S., C.I.F., or C. & F.
- The seller delivered the watches to a freight forwarder for shipment and obtained insurance through the forwarder’s insurer.
- The shipment was routed to Belize City for pickup by the buyer’s representative and onward transport to Chetumal.
- Upon arrival in Belize City, the cartons were opened and found empty.
- The buyer’s personal representative sued the seller, freight forwarder, and insurer for damages based on failure to deliver.
- The parties did not dispute that if the contract was a shipment contract, the seller had satisfied its UCC obligations by delivering to a proper carrier under a reasonable contract, providing notice, and supplying necessary documents.

## Issues

1. Whether a sales contract that specifies where goods are to be sent by carrier, but lacks express risk-of-loss allocation and destination-type delivery terms, is a shipment contract or a destination contract under the UCC.
2. If the contract is a shipment contract, whether risk of loss passed to the buyer upon the seller’s delivery of the goods to the carrier.

## Decision

- The appellate court affirmed judgment for the seller, freight forwarder, and insurer after a non-jury trial.
- The court held the contract was a shipment contract because it contained no express destination terms or explicit allocation of risk of loss during transit.
- The court concluded risk of loss passed to the buyer when the seller duly delivered the goods to the carrier under a reasonable contract of carriage.
- Because the seller’s performance was undisputed under the shipment-contract characterization, the loss discovered after delivery to the carrier did not create liability on the theory asserted.

## Legal Principles

- Under the UCC, contracts requiring carriage are presumptively shipment contracts; destination contracts require clear, express contractual terms.
- Language directing that goods be “sent” or “shipped” to a named place is ordinarily a shipping instruction and does not, by itself, make the agreement a destination contract.
- Absent destination-type terms (e.g., “F.O.B. place of destination”) or explicit risk allocation, risk of loss in a shipment contract passes to the buyer when the seller delivers the goods to the carrier under a reasonable contract of carriage and complies with required notice/document duties.

## Conclusion

The court treated the agreement as a shipment contract because it lacked express destination delivery terms or an explicit risk-of-loss allocation; therefore, risk of loss shifted to the buyer upon the seller’s proper delivery of the watches to the carrier, defeating the buyer’s contract-based claim for nondelivery.


Pestana v. Karinol Corp., 367 So. 2d 1096 (Fla. Dist. Ct. App. 1979)