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Trade terms: time, place, manner
Parties define terms: ICC, US, UK, Japan, CISG (Art 6) - Parties should be clear
INCOTERMS:
- private trade terms (ICC) apply to contracts of sale NOT carriage
- 4 groups - E,F,C,D: maritime/any means
www.iccwbo.org/incoterms
Passing of Risk:
Delivery - place & time
Obligation Transport Costs - inspections
Customs Formalities - which party?
Shipping Documents - which party?
'Free': Seller's obligation to deliver to named place for transfer to carrier
E-group: EXW - named place (seller's pob)
F-group: FCA, FAS, FOB - seller pays transport to named place of shipment
C-group: CFR, CIF, CPT, CIP - buyer pays transport to named place of destination
D-group: DAT, DAP, DDP - seller pays all costs to named place of destination
Liability:
EXW, FCA, FAS, FOB, CFR, CPT = buyer
CIF, CIP = seller
DAT, DAP, DDP = no obligation
"FAS (FOB) Rotterdam, Incoterms 2010"
Seller ships potatoes FOB Washington to Japan - buyer chooses ship to take delivery - potatoes dumped - buyer sues seller
IS SELLER LIABLE? Yes
FOB: seller to deliver, clear, - risk at rail
Seller responsible even after buyer's ship begins to take goods off dock - goods did not cross ship's rail
Seller agrees to ship goods CIF San Francisco to London - goods loaded & documents SF - seller asks immediate payment - buyer refuses, cites right to inspect goods in London - seller sues for immediate payment
WILL SELLER WIN? Yes
CIF (CFR + insurance): seller to pay to port, load, insurance & risk at rail (CISG, Arts 30, 33, 38)
Buyer may claim insurance if goods lost - seller's obligations complete when documents tendered to buyer - so buyer obliged to pay - buyer can inspect goods after delivery (Art 38(2))
Carriage: Obligation of delivery, resulting from international sales contract
Carrier > goods on behalf of sender
Contract of Carriage: Freedom of sender & carrier limited by international treaties
CoC - between carrier & seller or buyer
Parties: Sender (3rd Party loading)
Consignee (3rd Party accept delivery) & goods at own risk Carrier (3rd Party transport) then carrier is sender
Seller ships potatoes FAS Washington to Japan - buyer chooses ship to take delivery - potatoes dumped - buyer sues seller
IS SELLER LIABLE? No
FAS: seller to place goods at port, clear for export & risk passes alongside ship
Seller's responsibilities end upon delivery of goods alongside - buyer to pay for lighter alongside Russet
Seller agrees to ship goods CIF Sydney to Honolulu - late delivery but rail & ship bills of lading & insurance - buyer refuses to pay - seller sues buyer to enforce contract
WILL SELLER WIN? No
CIF (CFR + insurance): seller to pay to port, load, insurance & risk at rail (CISG, Arts 30, 33)
Seller failed to ship by 31 Dec - deficiency of service - did not deliver goods at contracted date, place & time
Documents tendered to buyer, so seller's obligations complete, buyer liable - BUT - seller failed to perform, so buyer can avoid