Prior Uniform Statutory Provision: None.
1. The "no arrival, no sale" term in a "destination" overseas contract leaves risk of loss on the seller but gives him or her an exemption from liability for nondelivery. Both the nature of the case and the duty of good faith require that the seller must not interfere with the arrival of the goods in any way. If the circumstances impose upon him or her the responsibility for making or arranging the shipment, he or she must have a shipment made despite the exemption clause. Further, the shipment made must be a conforming one, for the exemption under a "no arrival, no sale" term applies only to the hazards of transportation and the goods must be proper in all other respects.
The reason of this section is that where the seller is reselling goods bought by him or her as shipped by another and this fact is known to the buyer, so that the seller is not under any obligation to make the shipment himself or herself, the seller is entitled under the "no arrival, no sale" clause to exemption from payment of damages for nondelivery if the goods do not arrive or if the goods which actually arrive are nonconforming. This does not extend to sellers who arrange shipment by their own agents, in which case the clause is limited to casualty due to marine hazards. But sellers who make known that they are contracting only with respect to what will be delivered to them by parties over whom they assume no control are entitled to the full quantum of the exemption.
2. The provisions of this article on identification must be read together with the present section in order to bring the exemption into application. Until there is some designation of the goods in a particular shipment or on a particular ship as being those to which the contract refers there can be no application of an exemption for their nonarrival.
3. The seller's duty to tender the agreed or declared goods if they do arrive is not impaired because of their delay in arrival or by their arrival after trans-shipment.
4. The phrase "to arrive" is often employed in the same sense as "no arrival, no sale" and may then be given the same effect. But a "to arrive" term, added to a C.I.F. or C. & F. contract, does not have the full meaning given by this section to "no arrival, no sale". Such a "to arrive" term is usually intended to operate only to the extent that the risks are not covered by the agreed insurance and the loss or casualty is due to such uncovered hazards. In some instances the "to arrive" term may be regarded as a time of payment term, or, in the case of the reselling seller discussed in point 1 above, as negating responsibility for conformity of the goods, if they arrive, to any description which was based on his or her good faith belief of the quality. Whether this is the intention of the parties is a question of fact based on all the circumstances surrounding the resale and in case of ambiguity the rules of sections 2-316 and 2-317 apply to preclude dishonor.
5. Paragraph (b) applies where goods arrive impaired by damage or partial loss during transportation and makes the policy of this article on casualty to identified goods applicable to such a situation. For the term cannot be regarded as intending to give the seller an unforeseen profit through casualty; it is intended only to protect him or her from loss due to causes beyond his or her control.
Point 1: Section 1-203.
Point 2: Section 2-501(a) and (c).
Point 5: Section 2-613.
Definitional Cross References:
"Buyer". Section 2-103.
"Conforming". Section 2-106.
"Contract". Section 1-201.
"Fault". Section 1-201.
"Goods". Section 2-105.
"Sale". Section 2-106.
"Seller". Section 2-103.
"Term". Section 1-201.