A Cost, Insurance, and Freight (CIF) contract of sale is
a sale of documents instead of sale of goods
.
What is a CIF contract?
Cost, insurance, and freight (CIF) is an
international shipping agreement
, which represents the charges paid by a seller to cover the costs, insurance, and freight of a buyer’s order while the cargo is in transit.
What are the commercial documents required under CIF contract?
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, …
Who makes the contract of carriage on CIF contract?
The seller
performs his contract by delivering the relevant documents to the buyer: an invoice specifying the goods and their price, a bill of lading evidencing the contract of carriage, a policy of insurance, and any other documents specified in the contract.
What is a sale of goods contracts?
The sale of goods agreement is
a legally binding contract that stipulates an item or items to be sold at a predetermined time and at a predetermined price
. It is an important business tool that protects both the seller and buyer throughout the terms of the business transaction.
What is CIF contact?
Cost, insurance, and freight
(CIF) is an international shipping agreement used when freight is shipped via sea or waterway. Under CIF, the seller is responsible for covering the costs, insurance, and freight of the buyer’s shipment while in transit.
What is the difference between FOB and CIF?
In CIF, the seller is
responsible for transporting goods to
the nearest port, loading the goods on the ship and paying freight for the goods to be delivered to a port chosen by the buyer. … In FOB trading, the seller is only responsible for taking the goods to the nearest port on his or her end.
How is CIF calculated?
(C) Cost (Invoice Value) $10,000. (I) Insurance $1,000. (F) Freight (Shipping) $2,500. = $13,500 (CIF Value)
What is free on board contract?
Free on Board (FOB) is a
shipment term used to indicate whether the seller or the buyer is liable for goods that are damaged or destroyed during shipping
. … “FOB origin” means the purchaser pays the shipping cost from the factory or warehouse and gains ownership of the goods as soon as it leaves its point of origin.
What is the difference between CFR and CIF?
Cost and freight (CFR) is a trade term that requires the seller to transport goods by sea to a required port. Cost, insurance, and freight (CIF) is what a
seller pays to cover the cost of shipping
, as well as the insurance to protect against the potential damage of loss to a buyer’s order.
What are the implied terms in a sale of goods contract?
the
seller has the right to sell the goods
. This is also a condition of the contract. the goods are free from undisclosed security interests. the goods supplied under the contract will be reasonably fit for any purpose which the buyer made known to the seller.
What are the obligations of the seller?
Generally, the seller’s primary obligations are
to transfer ownership of the goods and deliver the goods
. A seller may agree with the buyer to perform other obligations. For instance, a seller may agree to package or label the goods in a certain way or service the goods for a specific period of time.
Who pays for unloading under CIF?
The buyer
must pay the costs and bear the risk of unloading the goods, clearing customs, and transporting the goods to the final destination. If FOB is the customs valuation basis, the international insurance and freight costs must be deducted from the DAF price.
What is FOB CIF and CNF?
There are two major terms of shipment widely used round the globe. These are
freight on board (FOB) and cost net freight (CNF)
. Other terms such as cost net insured (CIF) and cash against document/delivery (CAD) are also used. Based on the relationship between business entities, the terms are set.
