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Contract of Carriage & INCOTERMS

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by

Geraldine Coughlan

on 10 April 2014

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Transcript of Contract of Carriage & INCOTERMS

August et al. 11A, Exs 1,2,4,5 /Wevers Ch 8

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
Contract of Carriage & INCOTERMS
INCOTERMS 2010
'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"
Ex 1:
FOB
- port of shipment
Seller ships potatoes
FOB
Washington to Japan - buyer chooses ship to take delivery - potatoes dumped - buyer sues seller
IS SELLER LIABLE? Yes
F
OB
: 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
Ex 2:
FAS
-

port of shipment
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
Ex 4:
CIF
- port of destination
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
Ex 5:
CIF
- port of destination
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)
)
Concepts
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?
Full transcript