|The parties had concluded a contract for the sale of cars to be shipped on the terms of a C.F.F.O. clause. After discovering that the steel had oxidized, the buyer commenced a legal action alleging that the seller was liable because the damage to the goods had occurred before they were loaded aboard the ship.
The first instance Court rejected the claim. The buyer appealed.
The appellate Court confirmed the first instance decision, stating that the C.F.F.O. clause only obliged the seller to pay all the expenses to be sustained for the shipment of the goods to destination, including the freight, but had no relevance to the matter of the passing of the risk. According to Arts. 31 and 67 CISG, the seller was not liable because the risk had passed on to the buyer when the goods were handed over to the carrier for shipment, regardless of whether the risk was covered by insurance or not. Moreover the carrier had signed a document certifying that the goods were loaded "clean on board", i.e. in perfect condition, and the buyer had failed to give evidence to the contrary, in particular to prove that the deterioration had occurred before the loading.