When does "risk of loss" transfer in a destination contract?

In a destination contract, the "risk of loss" transfers from the seller to the buyer when the goods are delivered to the buyer’s specified location. This means that the seller retains the responsibility for any loss or damage to the goods until they reach the agreed-upon destination. The key characteristic of a destination contract is that it obligates the seller to ensure the goods arrive safely at the specified location, thus protecting the buyer against risk until that point.

Other options miss this critical aspect of destination contracts. For instance, in an option where the seller simply ships the goods, there is still potential for loss or damage during transit, implying the risk has not yet transferred. The moment the buyer takes possession of the goods does not apply in destination contracts, as the seller's obligation continues until delivery is complete at the designated location. Similarly, the timing of when the contract is signed does not affect the transfer of risk; the risk aspect pertains solely to the shipment and delivery of the goods.