Question

Fine Furniture, Inc. is a furniture manufacturer located in Norfolk, Virginia. Fine enters into a contract with Jaguar Interiors, L. L. C. in Jacksonville, Florida, agreeing to sell Jaguar Interiors 1,000 dining room chairs at a total contract price of $100,000. The contract’s shipping term designates “F. O. B. Destination,” and stipulates that Darnell, Uecker, and Irvin (“D.U.I.”) Shipping, International will transport the furniture from Norfolk to Jacksonville. D. U. I. Shipping has retained the services of a ship steward, Joe Birchtree, to captain the ship en route to Jacksonville. Birchtree has history of alcohol abuse, but his professional record is clear of any mishaps. On a clear day, with calm waters, blue skies and the absence of wind, Birchtree runs his ship aground, and all cargo is ruined as a result of water damage. Evidence indicates that Birchtree was intoxicated at the time of the accident. As between Fine Furniture and Jaguar Interiors, who held title to the chairs when the ship ran aground? As between Fine Furniture and Jaguar Interiors, who bears the loss of the chairs? Ultimately, does D. U. I. Shipping bear legal responsibility for the chairs?

Answer 1

Since incoterms used is FOB which is free on board where seller bears all risks untill goods are transported and loaded onto buyers container.

Since the captain was drunk as per evidence all losses and damages have to be borne by seller and is completely liable as per contractual obligations.

DUI shall not bear any such costs related to shipping of abovementioned products since goods got damaged midway before getting loaded onto DUI terminal.