Rheinberg-Kellerei GmbH v. Vineyard Wine Company
North Carolina Court of Appeals
281 S.E.2d 425 (1981)
Rheinberg-Kellerei GmbH (Rheinberg) (plaintiff), a West German company, contracted to sell wine to Vineyard Wine Company (Vineyard) (defendant) in North Carolina. Vineyard never specified a delivery location and knew nothing about the shipping details. Rheinberg handed the wine to a carrier without telling Vineyard, and the ship was later lost at sea with all cargo. Rheinberg didn't invoice Vineyard's bank until after the loss, and Vineyard didn't learn the shipment was lost until weeks later; Vineyard then refused to pay, and Rheinberg sued for the price. The trial court found Rheinberg failed to promptly notify Vineyard under UCC § 2-504, meaning risk of loss never passed to Vineyard under § 2-509, and dismissed the suit. Both sides appealed.
Whether, under a shipment contract, the risk of loss shifts from the seller to the buyer upon delivery of the goods to the carrier if the seller fails to promptly notify the buyer of the shipment.