Cif Contract

In: Business and Management

Submitted By Lichie
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Duties of the seller in a C.I.F contract and its counterpart: the right of rejection of the buyer

‘A C.I.F. contract ... is a type of contract which is more widely and more frequently in use than any other contract used for the purposes of sea-borne commerce’ . Nowadays, it is necessary to ensure the international trade throughout the world and in so doing, a seller and a buyer coming from different countries and entering into a contract of sale can have various interpretations about trading practices. Moreover, such contracts expose the both parties to a lot of risks and more than in a purely domestic sale because for instance of the physical risks associated with transport of goods, financial risks, political risks and also legal risks if a foreign system of law is involved Thus, in order to avoid those risks and to make it simply, the International Chamber of Commerce (ICC) has established from 1936, but subsequently revised, a set of rules for the interpretation of trade terms, also known as incoterms or international commercial terms, which are used to divide transaction costs and responsibilities between buyer and seller and reflect transportation practices. Therefore, the different interpretations of such terms can be avoided or at least reduced considerably. Amongst those incoterms, there exists the C.I.F (Cost, Insurance and Freight) contract.

This latter trade term is not defined by English law but rather its terms have been worked out judicially because it is the out-growth of the customs and usages of merchants instead of the product of legislation . Therefore, the standard incoterms of trade made by the ICC have customary or even statutory force in some jurisdiction, but will be applied in English law only if the both parties have chosen to do so. Indeed, it is of greater importance that the parties know which law applies to a…...

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