What is a destination contract?

A destination contract is characterized by the stipulation that the seller retains responsibility for the goods until they reach the buyer's specified destination. This means that the risk of loss or damage during shipment remains with the seller, and only transfers to the buyer once the goods arrive at the agreed location and are made available to them. In this context, the correct choice signifies that the buyer is relieved of responsibility for any damages that occur during the shipping process.

This type of contract is significant in commercial transactions because it offers the buyer a level of protection; if the goods are damaged while en route, the seller must address those issues, not the buyer. Factors like this are crucial for businesses when they negotiate terms of sale, as they impact cost, liability, and risk management. The other choices represent scenarios wherein the responsibility for the goods might shift at different points in the shipment process, but they do not align with the specific protections offered by a destination contract.