Cost , Insurance and Freight contract

Cost , Insurance and Freight contract

(CIF contract under Incoterm 2000)

The duties of the seller in a CIF contract [1]:

1.) Compose an invoice for the goods  :

2.) Ship the goods that respond accurately to the explanation of those ordered;

3.) Produce a contract of affreightment ;

4.) Assure the goods ; and

5.) Forward the needed shipping documents.

The profits and risks of CIF contract

               Their profits are obtained from the difference at which the booked freight and marine insurance and the final price were paid[2].

               Risk below a CIF contract usually passs ‘on shipment or as from shipment’. Implied here is the fact that ,where the goods are sold and consequently shipped ,the risk will pass on shipment[3].

               Likewise, where the goods are already afloat at the time the contract was closed, it does show that it would be more suitable to observe the risk as having passed as from shipment and not on shipment. This is because , the goods having been primary shipped and then sold ,the risk began running as from shipment and not on shipment ;it is obvious that the sale was headed by shipment  .It has been recommended that it will be more precise to say that the risk passes on sale’[4].

               Moreover[5] , the risk passes only after the goods are not in “on board” or “pass the ship’s rail”  ; in contrast , since we have just been , recent trade meaning occur risk pass as the goods are transported into the protection or transform of the carrier . Moreover, current practice in given that that risk passes after the goods are “handed over” to the carrier. After the

carriers is in a place to allow custody prior to loading it is complex to decide whether destroy noticed at destination occurred before , during or after loading. In some cases  , as when the seller has conveniences for pier loading such as granules or other size commodities .Then , the seller will not “ hand over” the goods to the carrier until they go through the ship’s hold ; when the seller transports the goods to an go-between at the port or a port power it will be particularly significant for the contract to identify the aim at which risk passes.

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[1] Sweet and Maxwell , C.I.F. and F.O.B. contracts ,(1995) 41

[2] A.A. Precede , Exporting to the World ; A Manual of Practical Export for All Who Are Interested or Engaged in Foreign Trade, 104

[3] I Carr , International Trade law , (3^rd edn , Great Britain  , London , 2005 ), (n9) 35-38

[4] J Honnold and H.M. Flechtner , Uniform law for international sales under the 1980 United Nations convention , Kluwer Law International , Bedfordshire , 2009 )312-316

[5] J Honnold and H.M. Flechtner  , (n13) 519