Book contents
- Frontmatter
- Contents
- Preface
- List of abbreviations
- Table of Statutory Provisions
- Table of Cases
- Part 1 Agency
- Part 2 Sale of Goods and Services
- Part 3 International Trade and Sales
- Part 3 Chapter 1 Standard Trade Terms
- Part 3 Chapter 2 The Vienna Convention on the International Sale of Goods 1980 (CISG)
- Part 3 Chapter 3 Payment in International Sales
- Part 3 Chapter 4 Carriage of Goods by Sea
- Part 4 Tortious Liability for Defective Products
- Part 5 Unfair Commercial Practices
- Part 6 Banking and Finance Law
- Part 7 Consumer Credit
- Bibliography
- Index
- References
Part 3 Chapter 1 - Standard Trade Terms
from Part 3 - International Trade and Sales
Published online by Cambridge University Press: 05 August 2012
- Frontmatter
- Contents
- Preface
- List of abbreviations
- Table of Statutory Provisions
- Table of Cases
- Part 1 Agency
- Part 2 Sale of Goods and Services
- Part 3 International Trade and Sales
- Part 3 Chapter 1 Standard Trade Terms
- Part 3 Chapter 2 The Vienna Convention on the International Sale of Goods 1980 (CISG)
- Part 3 Chapter 3 Payment in International Sales
- Part 3 Chapter 4 Carriage of Goods by Sea
- Part 4 Tortious Liability for Defective Products
- Part 5 Unfair Commercial Practices
- Part 6 Banking and Finance Law
- Part 7 Consumer Credit
- Bibliography
- Index
- References
Summary
Introduction
Standard trade terms have long been used by tradesmen to establish the duties of the buyer and seller. This chapter will examine two of the main standard trade terms in use in international trade, mainly CIF (cost, insurance, freight) and FOB (free on board). We will also examine variants of these terms, as well as the relevance of INCOTERMS, a series of commercial terms developed and published by the International Chamber of Commerce (ICC), which are widely used in international commercial transactions. First published in 1936, the latest set of these rules was published in 2010.
CIF contracts
As stated above, CIF contracts have long been part of the mainstream of international sales transactions. In Ross T Smyth & Co. Ltd v. TD Bailey, Son & Co. Ltd Lord Wright summarises the characteristics of a CIF contract as follows:
the price is to include cost, insurance and freight. It is a type of contract which is more widely and more frequently in use than any other contract used for purposes of seaborne commerce. An enormous number of transactions, in value amounting to untold sums, are carried out every year under cif contracts. The essential characteristics of this contract have often been described. The seller has to ship or acquire after that shipment the contract goods, as to which if unascertained he is generally required to give a notice of appropriation. On or after shipment he has to obtain proper bills of lading and proper policies of insurance. He fulfils his contract by transferring the bills of lading and the policies to the buyer. As a general rule he does so only against payment of the price, less the freight, which the buyer has to pay. In the invoice which accompanies the tender of the documents on the ‘prompt’, that is, the date fixed for payment, the freight is deducted for this reason. In this course of business the general property in the goods remains in the seller until he transfers the bills of lading.
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- Commercial LawPrinciples and Policy, pp. 183 - 196Publisher: Cambridge University PressPrint publication year: 2012