Question

Joe ordered goods from Mike to be delivered to Joe under the term “delivery to buyer”. Mike shipped the goods with Federal Implied, that reliable common carrier. Federal’s truck was hijacked and the goods were never delivered. Joe refused to pay Mike. Mike sued Joe for breach of contract. Joe defended on the grounds that he was not liable for the goods, that only the common carrier was liable. Decide

Answer 1

In this instance we need to look at three important points

1. The point at which the ownership of goods being transferred from Mike to Joe.
2. Who has the ownership while goods are in transit
3. Liabilities of the common carrier for goods lost in transit

When we consider the three key elements,

1. Mike has shipped goods with the terms FOB, Free on Board Destination, where the seller will pay for the transport charges and the ownership of goods will be transferred only when the goods reaches the destination of Joe.
2. While goods are in transit, the ownership lies with Mike as the goods have not reached the premises of Joe. Hence the ownership is not transferred.
3. The common carriers are liable for loss or damage to the goods they carry, but with few exceptions, especially when those damages are caused by "An act of the public enemies". Here the goods were lost because of the action of public enemies who had hijacked the carrier and the goods were never delivered.

Considering the above points, Joe is not legally liable for paying, as he is not the owner for the goods until it reaches his premises. Mike does not have right to sue Joe as he was still the owner as the goods were never delivered. Even Federal implied is not responsible for damage of goods as it was An act of the public enemies. The entire damages to goods will be the responsibility of Mike and he has to bare the loss.