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Define a cif contract and what are it’s

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Define a cif contract and what are it’s

  1. 1. Define a CIF contract and what are it’s advantages and disadvantages in practice? Prepared By: 1.Md. Rahat ( Lead Writer) 2.Falguni Moyeed 3. Arifur Khan
  2. 2. Contents of my presentation: • Definition of CIF contract • Elements of CIF contract • Advantages of CIF contract • Disadvantages of CIF contract • Conclusion • Bibliography
  3. 3. Definition of CIF contract: • Cost, insurance and freight(CIF) means that the seller delivers when the goods pass the ship's rail in the port of shipment. • CIF contract is a cost, insurance and freight contract. • Lord Atkinson in Jahnson v Trylor Bros
  4. 4. Advantages of CIF contract: 1. The buyer has the advantage of knowing from the date of the contract the exact price he must pay to obtain the goods: the contract price includes freight and insurance. 2. The use of the documents to perform the contract and represent the goods allows the parties to deal with the goods afloat. 3. Ultimately, the buyer has a right once he gets the documents of sale and he may still reject the goods on their actual delivery if they turn out to be not in conformity with the standards he had prescribed. 4. Any one can buy the goods by exchanging documents even if the good is not reached in port. 5. The buyer is generally protected against such losses by the bill of lading, giving a contractual right against the carrier,
  5. 5. Sale of Goods Act 1979 Sec.20 provides: ‘Unless otherwise agreed, the goods remain at the seller's risk until the property in them is transferred to the buyer, but when the property in them is transferred to the buyer the goods are at the buyer's risk whether delivery has been made or not.’ So CIF contract is not governed by Sale of Goods Act 1979 which is the advantages of CIF contract.
  6. 6. Disadvantages of CIF contract: 1. The buyer will have nothing in his hands except documents, which makes his condition more insecure as, he still has to deal with the insurer and the carrier and he may not be able to recover from them. 2. If the goods have merely deteriorated or are damaged it seems more just to permit on a subsequent appropriation since the buyer will still have in his hands the goods, which may still be of some commercial value. 3. If the goods are lost or deteriorate after the goods have been appropriated to the contract, the seller may still tender the documents; once goods have been appropriated to the contract the seller is not entitled to tender any others
  7. 7. Conclusion: In conclusion it can be said that, importers prefer CIF terms when either they’re new to international trade or they have relatively little freight volume. These importers often find CIF easier because the suppliers are responsible for arranging freight and insurance details. Under these terms the importer relinquishes control of choosing freight carriers, routing and other shipping specifics
  8. 8. Bibliography: CASES: Johnson v Trylor Bros [1920] AC 144 at 145. Manbre Saccharine Co v Corn Products Co [1919] 1KB 198 Ross T smyth & Co Ltd v T D Bailey, Son & Co [1940] 3 All ER 60, HL. LEGISLATIONS: Sale of Goods Act 1979, section20. TEXTS: Bradgate Robert, ‘Commercial law’, 3rd edition, Oxford University Press, 2005. Dionysios Flambouras, ‘Transfer of Risk in the Contract of Sale involving Carriage of Goods: A Comparative Study in English, Greek Law and the United Nations Convention on Contracts for the International Sale of Goods’, CHAPTER III, TRADE USAGES RELATED TO CONTRACTS INVOLVING SEA TRANSIT, < http://www.jus.uio.no/pace/transfer_of_risk_contract_of_sale_involving_carriage_of_goods_compa > accessed 28 October 2010. Articles: Gbenga Oduntan, ‘"C.I.F. Gatwick" and other such nonsense upon stilts: Incoterms and the law, jargon and practice of international business transactions’ (2010) I.C.C.L.R. 21(6), 214-223 https://login.westlaw.co.uk/maf/wluk/app/document?&src=rl&srguid=ia744d0650000012c1d2a1db0   WEBSITES: