Delivery of possession: Overview, definition, and example
What is delivery of possession?
Delivery of possession refers to the transfer of physical control or ownership of property, goods, or assets from one party to another. It signifies that the recipient has received and taken control of the item, whether it’s real estate, equipment, or goods under a sales contract.
For example, when a tenant moves into a rented office space, the landlord delivers possession by providing the keys and allowing access to the property.
Why is delivery of possession important?
Delivery of possession is a critical step in transactions involving property or goods. It confirms that the buyer, tenant, or recipient has received what was agreed upon and may also trigger payment obligations, warranties, or other legal responsibilities.
For businesses, clear terms around delivery of possession help prevent disputes over when ownership or liability transfers. In real estate leases, this determines when a tenant can begin using the property and when rent payments start. In sales contracts, it establishes when the buyer takes responsibility for the goods.
Understanding delivery of possession through an example
Imagine a company purchases new office furniture from a supplier. The contract states that the supplier must deliver possession by March 1. On that date, the supplier physically hands over the furniture, and the company becomes responsible for it, including any damages or losses.
In another case, a landlord agrees to lease a warehouse to a business. The lease states that possession will be delivered on April 1. If the landlord fails to hand over the keys or allow access on that date, the tenant may have legal grounds to seek damages or delay rent payments.
An example of a delivery of possession clause
Here’s how a delivery of possession clause might appear in a contract:
“The Seller shall deliver possession of the Goods to the Buyer on [date] at [location]. Upon delivery, the Buyer assumes all risk and responsibility for the Goods.”
Conclusion
Delivery of possession marks the moment when control of property, goods, or assets officially transfers from one party to another. It is a key step in contracts, affecting legal rights, responsibilities, and payment obligations.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.