## Facts

- A construction subcontractor (Jordan) purchased custom-made windows from a fabricator (Windows) for installation at an airport facility in New York.
- The agreement required the windows to be properly packaged for cross-country motor freight and delivered to New York City.
- Windows manufactured the windows to specification and delivered them to a common carrier intact and properly packaged.
- During transit, a substantial portion of the shipment was damaged due to load shift; the buyer noted extensive damage on the delivery receipt.
- To maintain its construction schedule, Jordan’s employees disassembled damaged window frames to salvage usable parts.
- Windows shipped a second, intact set of windows, but Jordan did not pay for either the damaged first shipment or the replacement shipment.
- Windows sued for the contract price; Jordan counterclaimed for incidental and consequential damages arising from the transit damage and resulting delays.
- After removal to federal court and a settlement between Windows and the carrier, the only remaining claim was Jordan’s counterclaim against Windows.
- The district court granted summary judgment to Windows, and Jordan appealed.

## Issues

1. Whether contract language requiring the windows to be “delivered to New York City” created a destination contract rather than a shipment contract under U.C.C. Article 2.
2. Whether, under U.C.C. § 2-509, the risk of loss passed to the buyer when the seller delivered conforming goods to the carrier, precluding buyer damages against the seller for transit damage.
3. Whether U.C.C. § 2-613 (casualty to identified goods without fault) governed the allocation of loss for carrier-caused transit damage, or whether § 2-509 controlled.

## Decision

- The Second Circuit affirmed summary judgment for Windows.
- The court held the agreement was a shipment contract, not a destination contract, despite the phrase “delivered to New York City.”
- Under U.C.C. § 2-509(1)(a), risk of loss passed to Jordan when Windows duly delivered conforming, properly packaged goods to the carrier.
- Because the loss occurred after risk passed and did not result from Windows’s breach, Jordan could not recover incidental or consequential damages from Windows.
- The court affirmed on risk-of-loss grounds under § 2-509 rather than relying on § 2-613.

## Legal Principles

- In contracts involving delivery by carrier, the default classification is a shipment contract unless the parties clearly require the seller to tender delivery at a particular destination.
- Under U.C.C. § 2-509(1)(a), for shipment contracts, risk of loss passes to the buyer when conforming goods are duly delivered to the carrier.
- Buyer recovery of incidental and consequential damages against the seller generally requires that the damages result from the seller’s breach; carrier-caused transit damage after risk passes is not, by itself, a seller breach.
- U.C.C. § 2-613 does not displace § 2-509 for ordinary transit-damage disputes when the seller has duly delivered conforming goods to the carrier.

## Conclusion

The court held that the contract was a shipment contract and that risk of loss shifted to the buyer upon the seller’s proper delivery of conforming goods to the carrier; because the seller did not breach, the buyer’s counterclaim for incidental and consequential damages from transit damage failed.


Windows, Inc. v. Jordan Panel Sys. Corp., 177 F.3d 114 (2d Cir. 1999)