Who Bears the Loss for a Shipment of Missing Watches? On March 4, Pedro Pestana, a resident of Chetumal, Mexico, entered into a contract in which he agreed to purchase from the Karinol Corporation, a company based in Miami, Florida, 64 watches for $6,006.An employee of Karinol Corporation wrote the contract in Spanish, and at the bottom of the agreement was a notation that said, “Please send the merchandise in cardboard boxes duly strapped with metal bands via air parcel post to Chetumal. Documents to Banco de Commercio De Quintano Roo S.A.” The contract contained no provisions for allocating the risk of loss on the goods sold while they were in transit; it also did not include any specific shipping terms (such as F.O.B., F.A.S., C.I.F, or others). Pestana paid Karinol a 25 percent deposit on the watches prior to their shipment.
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