Contractor Risk Allocation During Material Transportation

A lower court, relying on a general clause in a construction contract stipulating that the contractor was responsible for all risks unless otherwise specified, held the contractor liable for damage to materials that occurred during transportation to the worksite, despite the contractor arguing that the owner retained possession and risk until the materials were delivered to the site and incorporated. The highest court quashed this decision, reasoning that in the absence of a specific contractual provision shifting the risk of transport damage to the contractor, the general clause concerning risks of execution on the site did not apply to the pre-delivery phase, and therefore the owner, who retained custody and risk of the materials during transit, bore the loss.