Hospital materials managers need to be aware of liability for equipment shipped to hospitals.

A contract for the purchase of hospital equipment provided for shipment free-on-board destination. The equipment arrived via common carrier and was signed for at the unloading dock. When uncrated, concealed damage was discovered and the supplier was notified. The supplier offered to repair the equipment at its expense. The hospital would rather have a replacement unit. The hospital notified the supplier that the equipment was being returned at the supplier's expense. The supplier contended that this couldn't be done as title passed to the hospital upon shipment and that it had been accepted by the hospital when signed for at the unloading dock. In this dialogue, Dr. Decker discusses the legal issues raised in this query from a reader.