This clause establishes who has the authority to select the carrier (shipping company or transportation provider) responsible for delivering goods and determines how payment obligations are allocated between parties. The clause typically specifies whether the buyer, seller, or a third party makes carrier decisions, and clarifies whether carrier costs are included in the purchase price or billed separately. This matters because carrier selection directly impacts delivery speed, reliability, cost, and liability exposure—a party without selection authority may receive goods via an unreliable carrier while still being responsible for payment, or conversely, may face unexpected additional charges if the other party selects an expensive carrier. The clause also affects risk allocation: if one party selects the carrier, they typically bear responsibility for carrier-related delays or damage.
Ensure the clause clearly specifies which party selects the carrier and under what constraints (e.g., "Buyer selects carrier from pre-approved list" or "Seller selects carrier at Seller's expense"). If you lack selection authority, negotiate for approval rights over carrier choice or establish objective criteria (cost, speed, insurance coverage) that the selecting party must follow. Clarify whether carrier costs are included in the contract price or billed separately, and specify who bears the risk of carrier failure, delay, or damage. Consider requiring the selecting party to use only carriers meeting minimum insurance and safety standards.
Frequently Asked Questions
What does this clause mean in simple terms?
This clause establishes who has the authority to select the carrier (shipping company or transportation provider) responsible for delivering goods and determines how payment obligations are allocated between parties.
Why should I care about this clause?
The clause typically specifies whether the buyer, seller, or a third party makes carrier decisions, and clarifies whether carrier costs are included in the purchase price or billed separately.
What are my options?
This matters because carrier selection directly impacts delivery speed, reliability, cost, and liability exposure—a party without selection authority may receive goods via an unreliable carrier while still being responsible for payment, or conversely, may face unexpected additional charges if the other party selects an expensive carrier.
How does this affect small businesses?
The clause also affects risk allocation: if one party selects the carrier, they typically bear responsibility for carrier-related delays or damage.