Goods from China Damaged in Transit: Is the Supplier Still Liable?

A shipment from China arrives damaged, and the supplier replies: “The risk passed when we shipped it.” That statement does not resolve the claim. A buyer needs to separate accidental transport loss from a breach by the seller, identify the agreed handover point, and preserve evidence of the goods’ condition before and after that point.

This guide concerns commercial goods purchases from Chinese suppliers. It addresses the sales-contract claim; a claim against a carrier, freight forwarder or insurer requires its own analysis. 中文版

1. Separate transport risk, ownership and the seller’s obligations

Risk allocation answers who bears certain loss or damage during the transaction. It does not, by itself, determine ownership, whether the seller supplied conforming goods, or which insurance policy responds. Paying the invoice or receiving a bill of lading is not a universal rule for resolving all these questions.

First establish the applicable rules. The United Nations Convention on Contracts for the International Sale of Goods (CISG) may apply to a qualifying international sale, subject to its scope, relevant declarations and any effective exclusion. Articles 1–6 must be checked; Article 4 generally leaves the effect on property in the goods outside its scope. The official status table records entry into force for China on 1 January 1988 and its declaration concerning Article 1(1)(b).

Where Chinese domestic sales law governs the issue, Civil Code Article 604 generally allocates risk before and after delivery, subject to law or agreement. Do not apply it merely because the supplier is in China: the contract, treaty rules and applicable-law analysis come first. Article 41 of the PRC Law on the Application of Laws to Foreign-Related Civil Relations, effective 1 April 2011, addresses the law applicable to contracts.

2. Identify the contractual handover, not just the destination

Read the full delivery clause: trade term and version, named place or port, transport mode, agreed modifications and the actual handover. Under an agreed Incoterms® 2020 CIF arrangement, for example, the seller’s responsibility for freight to the named destination does not mean risk normally remains with the seller until arrival: the standard delivery and risk point is on board the vessel at the shipment port. The contract may modify that allocation. See the ICC Academy explanation of delivery and risk. Do not infer a destination-risk promise merely from a freight-inclusive price.

Where CISG Article 67 supplies the applicable rule for carriage, the first-carrier handover matters if the seller is not bound to hand over at a particular place. If the seller must hand the goods to a carrier at a particular place, risk does not pass until that handover there. Under Article 67(2), the goods must also be clearly identified to the contract, for example through markings, shipping documents or notice. A generic warehouse receipt unconnected to the order may not answer that question.

Article 67 also makes clear that retaining documents controlling disposition does not itself prevent risk passing. Sales of goods already in transit and other delivery arrangements require separate consideration under Articles 68–69. Under Chinese domestic law, Article 607’s carriage rules likewise need their factual conditions checked; “the supplier booked a truck” is not a complete legal analysis.

3. Risk passing does not erase a packaging or quality breach

CISG Article 66 addresses the buyer’s price obligation after risk passes, with an exception where loss or damage is due to the seller’s act or omission. Articles 35–36 separately address contractual packaging and conformity: a defect existing when risk passed can remain the seller’s responsibility even if it becomes apparent later. Article 35(2)(d)’s default packaging standard must be read with the parties’ agreement and the other qualifications in Article 35. Article 70 preserves the buyer’s breach remedies where the seller committed a fundamental breach; not every damaged item establishes that threshold.

Two hypothetical situations illustrate the difference. Goods conforming to the contract and adequately packed are damaged solely in a later transport accident after risk validly passed. A supplier refund is not automatic. By contrast, components break during ordinary agreed transport because the seller supplied packaging that failed an applicable contractual or legal requirement. The later discovery of damage does not by itself excuse that earlier breach. Evidence of the packing obligation, the deficiency and its causal role matters in the second situation.

The Civil Code, effective 1 January 2021, draws a similar distinction in Article 611: the buyer’s bearing risk does not remove its right to pursue the seller’s non-conforming performance. Article 610 addresses non-conformity preventing the contractual purpose, rejection or termination, and the resulting risk allocation. A full-order refund therefore needs more than photographs of some broken goods.

4. Build a condition-and-handover timeline

Keep original files and identify the order, batch and people who created each record. A clean transport receipt can be relevant to apparent condition without proving that every sealed carton had adequate internal protection. An arrival photograph alone may show damage without establishing when or why it occurred.

Evidence group	Question to resolve
Contract and specifications	Which risk point, packaging, moisture protection, loading instructions and transport conditions were agreed?
Before handover	What do batch-linked inspection records, packing photographs, carton labels, seal numbers and loading records show?
Custody and transport	Who received the identified goods, where and when, with which reservations, incidents or recorded temperature and humidity conditions?
Arrival and examination	What was observed before unloading, opening or redistribution, and what do retained packaging, samples and a reasoned inspection report establish?
Notices and loss	Who was notified of which defect, when, and what repair, salvage, replacement or mitigation costs are supported by records?

A survey should explain its method, sample and limits, rather than merely assign blame. Preserve relevant packaging and samples where safe and practical, give other relevant parties a reasonable opportunity to inspect, and document any urgent steps needed to prevent further loss. Do not recreate an opening scene and present it as an original record. Quantity discrepancies require a separate reconciliation; see the short-shipment guide.

5. Notify each relevant party and assess remedies separately

Notify the seller promptly with the order, affected goods, nature of the damage, discovery date and available evidence. Under CISG Articles 38–39, examination and a sufficiently specific notice have their own timing rules. A notice to a carrier or insurer should not be assumed to satisfy the seller-notice requirement, or vice versa. The inspection and notice guide explains the separate qualifications.

Check each carrier or insurance contract, the claimant’s standing, coverage, exclusions, notice and claim deadlines, and the competent forum. A policy’s existence is not proof that this loss is covered. Transport and insurance claims can involve different governing rules from the goods-sale dispute; this article does not calculate their deadlines.

Repair, replacement, a price adjustment, damages or termination must be matched to the applicable conditions and evidence. Do not assume that withholding the entire unpaid balance is lawful simply because goods arrived damaged. Keep a loss calculation that distinguishes damaged and usable goods, reasonable mitigation costs, credits and amounts already recovered. CISG Article 77 and, where applicable, Civil Code Article 591 address mitigation; responsibility for each claimed cost still needs support. Review procedural time limits separately using the goods-sale limitation and demand-evidence guide.

6. Prepare a focused review of a claim against the Chinese supplier

For an initial enquiry, provide the parties’ registered names for conflict checking, the goods and amount involved, the delivery clause, handover and damage-discovery dates, the condition evidence, notices and the supplier’s response. Identify any carrier or insurer already contacted and any approaching deadline. Distinguish what the records establish from what is still suspected.

A focused review can assess whether the loss falls on the buyer as transport risk, whether a seller breach remains arguable, what evidence is missing and which negotiation, litigation or arbitration route may be available in China. Scope, necessary documents, fees and engagement arrangements should be confirmed before representation begins. See cross-border business legal services and the consultation page, or email panjianxing46@gmail.com. An enquiry does not itself establish an engagement or guarantee recovery.

Sources reviewed: 5 October 2026. CISG Articles 1–6, 35–40, 66–70 and 77; PRC Civil Code Articles 604–611 and 591; and the applicable-law and ICC materials linked above. Incoterms are contractual trade rules, not a substitute for the governing law. The examples are hypothetical.

Author: Jianxing Pan, lawyer and partner at Beijing Chang’an Law Firm, working in Beijing and Shenzhen. General information only; a particular transaction requires document-specific review.

Cover: AI-generated conceptual illustration, not a photograph of an actual client, case or shipment.