An analysis of the risk regimes of a few selected national systems will show that each has their own understanding of these trade terms. It is however common to have a sales contract for goods shipped in containers incorporation the cif or fob term. Feltham j, 1991 cif and fob contracts and the vienna convention on contracts for the international sale of goods, journal of business law september 4425. To conclude, cif and fob contracts are the most important contracts in the field of international trade. The cif seller or fob buyer who charters a vessel to fulfil its. Cost, insurance and freight means that the seller delivers when the goods pass the ships rail in the port of shipment. The cif, as well fob, is one of the most common sale contract forms in nowadays trade, probably morethan any other contract used for the purpose of seaborne commerce it is relatively a recent type of contract in the lex mercatoria, which appears in the middle of the 1800 and it has increasingly spread in the. May 18, 2010 in this case study, patina is the seller and luca is the buyer under an fob free on board agreement. Fifth edition whether drafting contracts or considering the nature of these provisions in the context of a dispute, sassoon offers an easytouse. In 2004, the model ucc dropped references to fob and cif.
This latest edition of a wellknown work on cif and fob contracts is a welcome addition to the literature on the english law of international sale of goods. Share free summaries, past exams, lecture notes, solutions and more. Everyday low prices and free delivery on eligible orders. Cost, insurance and freight cif contracts law times. International commercial contracts incoterms this guide explains international commercial terms incoterms, and how. Fob free on board and cif cost, insurance and freight contracts are related to international exports. Code of practice building control regulations 2014. This chapter surveys the field of export sales governed by english law and concluded on cif or fob terms. So, in case of cif contract the seller undertakes more obligation than the buyer. Notwithstanding anything elsewhere in the sales contract to the contrary, if the buyer fails to.
Cif contract is that when the seller has delivered the goods or provides them afloat. For example, fca atlantic house, holborn viaduct, london, ec1a 2fg. Mainly, under the cif contract, the parties have to deal with delivery of documents and not actual physical delivery of goods. Apr 24, 2018 cost, insurance and freight cif and free on board fob are international shipping agreements used in the transportation of goods between a buyer and a seller. Incoterms envisages different rights and obligations for buyers and sellers. The product shall be delivered by the seller to the buyer in bulk free on board fob, vessels to be provided or procured by the buyer at the loading terminals designated by the seller.
Bradgate r, 2003 commercial law, third edition, butterworths lexis nexis dobson p, 2003 commercial law, third edition, cavendish publishing. There are different terms for sea and inland waterways e. A cif contract is an agreement to sell goods at a price which is inclusive of the cost of goods, insurance charges and freight. These terms have been put in place so as to maintain uniformity, certainty and predictability in international trade agreements. Cif and fob contracts and the vienna convention on contracts for the international sale of goods, j. It is relatively a recent type of contract in the lex mercatoria, which appears in the middle of the 1800 3 and it has increasingly spread in the mercantile practice in. In cif contracts the price of goods inclusive of cost, insurance and freight. The previous fourth edition of sassoon was published in 1995 and a revised edition has long been overdue, particularly in such an incessantly developing area of the law. One of the distinct feature of cif contracts is that the buyer. Cost, insurance, and freight cif and free on board fob are international shipping agreements used in the transportation of goods between a buyer and a seller. Sep 27, 2019 this chapter surveys the field of export sales governed by english law and concluded on cif or fob terms.
B contracts and further the focus will be on the legal perspective and the roles of the shipping documents in c. As far as the payment is regarded, it must be made against the production of the appropriate documents according to the contract. Incoterms as a form of standardisation in international. If the inline pdf is not rendering correctly, you can download the pdf file here. Supplier shall notify companys transportation representative on 303 5388278 or 303 5382907 when material is ready for shipment. The united nations convention on contracts for the international sale of goods cisg does not refer to trade terms. International contracts typically contain shorthand terms incoterms describing when the risk of loss transfers from a seller to a buyer. Fifth edition whether drafting contracts or considering the nature of these provisions in the context of a. Cost, insurance and freight cif and free on board fob are international shipping agreements used in the transportation of goods between a buyer and a seller. Wr71980036 sheet 3 of 31 the material shall be shipped fob suppliers location, 21 meridian road, edison, n. The following difference exists between fob and cif. Free carrier all three incoterms beginning with f free carrier fca, free alongside ship fas and free on board fob mean that the seller is responsible for.
Definition of delivery delivery where the risk of loss or damage to the goods transfers from seller to buyer. The seller is responsible for the contract of the carrier and also for the payment of all, costs of pre. Topics include discussion of the practical impact of the hamburg rules, and a detailed overview of many international cases with over 100 cases added. The seller must contract for and pay the costs and freight necessary to bring the goods to the named port of destination. Lorenzon, filippo and baatz, yvonne 2012 cif and fob contracts. In conclusion, cif and fob contracts are the most important contracts in the field of international trade. The important differences between fob and cif contract is that, fob contract specifies the port of loading, however cif contract. According to case smyth and co ltd v baily son and co ltd, cif contracts summarised by lord wright is a type of contracts which is more frequent and the most popular in use than other contract. Contracts fob law and legal definition uslegal, inc. Cif and fob contracts 5th edition by lorenzon, filippo, skajaa, lynne, baatz, yvonne, sassoon, david m.
A3 contracts of carriage and insurance a contract of carriage. The buyer has to bear all costs and risks of loss of. The price includes all the expenses incurred until goods are actually loaded on board the ship at port of shipment. The seller meets cost of goods, freight and marine insurance. It is a more convenient way of shipping since they dont have to deal with freight or other shipping details, but you must realize that you are probably paying a lot more to get the goods than you should. Implementation plan on the states response to homelessness. Fob contract free download as powerpoint presentation. Use our interactive tool to identify which incoterm you should use. Cost, insurance and freightcif means that the seller delivers when the goods pass the ships rail in the port of shipment. In a cif agreement, the seller sells the good for a price including the cost, insurance and freight. Contract law free on board fob cif essay 1547 words.
Under the ucc version you could have fob destination, which is not allowed in incoterms so which should you use. Its use would be fob where would be the city or place where the goods would be left. The essence of the cif contract law contract essay. This means that the goods will be shipped to a specific place without cost. Importers generally buy cif if they are new in international trade or they have very small cargo. The significant feature of a cif contract is that performance of bargain is to be fulfilled by delivery.
Incoterms 2020 rules are icc defined shipping terms for buyers and sellers. The fob terms are an important part of the purchase contract. The seller must pay the costs and freight necessary to bring the goods to the named port of destination but the risk of loss of or damage to the goods, as well as any additional costs due to events occurring after the time of delivery, are transferred from the. He has to perform the contract by tendering conforming documents to the buyer. This work provides a comprehensive statement of the law and practice relating to cif and fob contracts, the two main international shipping contracts. Contracts dealing with goods to be shipped often include an fob clause, which stands for free on board. Whether drafting contracts or considering the nature of these provisions in the context of a dispute, sassoon offers an easytouse reference to the principles behind cif cost insurance freight and fob free on board contracts. These terms have been put in place so as to maintain uniformity, certainty and predictability in. Cif and fob contracts bill of lading private law scribd. Cif contracts in international sales of goods what is a. They are among the most common of the 12 international commerce terms incoterms established by the international chamber of commerce icc in 1936. Contracts for the international sale of goods cisg does not refer to trade terms. Fob contract recognizes the port of lading and this is the significant difference with cif contract, because in cif contracts recognize the port of arrival. Fob, cif or cfr contract will be entirely inappropriate.
It stands for cost, insurance and freight which effectively describes. Unlimited read and download cif and fob contracts british. The chapter does not provide a full account of the law but instead selects a number of issues. A cif contract requires the vendor to ship at the port of shipment the agreed goods in the underlying contract of sale, to procure a contract of carriage bill of lading under which the goods will be delivered to the agreed destination, to arrange for insurance which will be available for the benefit of the purchaser, to make out a commercial. The fob free on board and cif cost, insurance and freight contracts are involved with international export sale contracts also called export transactions, although the fob contract is loosely used in local commercial transactions. Specify the place or port as precisely as possible. The cif, as well fob, is one of the most common sale contract forms in nowadays trade, probably morethan any other contract used for the purpose of seaborne commerce.
Cost, insurance and freight cif and free on board fob. In general this contract is known as a contract for sale and shipment of goods to the agreed destination. Fob contracts before discussing fob contracts generally, it should be stated that it is not possible to construe the fob terms in a contract as terms of price only, rather than as terms ofshipment and delivery. It focuses on the sale of commodities and takes account of the volatile conditions in which such contracts are concluded and which shape the law in this area. Cif contracts are different from other incoterms especially from fob free on board in certain respects. Difference between cif and fob contracts business law. Cif contracts in international sales of goods cost, insurance and freight means that the seller delivers the goods on board the vessel or procures the goods already so delivered. The fob ter is very flexible, allowing it to take account ofthe various factors con, cerning a particular transaction. The contracts list, reflecting the current versions is set out in summary form below. Download further information on the cif incoterm from the icc website pdf. Chapter 3 laytime and demurrage in cif and fob contracts.
Fob contract can be described as a flexible instrument. This lecture paper explore in succinct the obligations of seller and buyer under c. Group e terms, group f terms, group c terms and group d terms as summarised below. Read more and learn how the performance of a cif contract affects vendors and purchasers conducting international trades. An international cif contract is the preeminent international sale contract on shipment terms. Cif contracts international sale of goods 08 22340 studocu. The seller must pay the costs and freight necessary to bring the goods to the named port of destination but the risk of loss of or damage to the goods, as well as any. However, cif contract has a very significant difference from fob contract. The main differences between cif and fob contracts under english law cif contract is that when the seller has delivered the goods or provides them afloat. Best pdf cif and fob contracts british shipping law library for ipad by david m. Covers the following for each of the cif and fob contracts. These terms promotes uniformity and certainty in international commercial agreements. Building control regulations of 2014 building control amendment regulations 2014 statutory instrument. The risk of loss of or damage to the goods passes when the goods are on board the vessel.
Incoterms as a form of standardisation in international sales. Fob free on board named port of shipment free on board means the seller fulfills its obligation to deliver when the goods have passed over the ships rail at the named port of shipment. Cif rotterdam, incoterms 2010 delivery occurs when. Remember that the incoterms 2010 are not a complete contract of sale. Construction 2020 a strategy for a renewed construction sector. He has to perform the contract by tendering conforming documents to the. Definition of cif contract elements of cif contract advantages of cif contract disadvantages of cif contract conclusion bibliography 3. Topics include discussion of the practical impact of the hamburg rules, and a detailed overview of many international cases with over 100 cases added since the last edition. Feb 27, 2020 cost, insurance, and freight cif and free on board fob are international shipping agreements used in the transportation of goods between a buyer and a seller. The seller must pay the costs and freight necessary to bring the goods to the named port of destination but the risk of loss of or damage to the goods, as well as any additional costs due to events occurring after the time of delivery, are transferred from the seller to the. The international sale of goods and incoterms from a maritime.
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