CIF Contract of International Trade

CIF Contract of International Trade

Under the Cost, insurance and Freight (CIF) contract. The seller has same obligations as under cost and Freight (C&F) contract but with the addition that he has to procure marine insurance against the buyer’s risk of loss or damage to goods during carriage. The seller contract for insurance and pays the insurance premium, However, seller is required to obtain insurance on minimum coverage only. The CIF term requires the seller to clear goods for export. This term can only be used for sea and inland waterways transport.

Seller’s Obligations:

(a) To provide goods and the commercial invoice, or its equivalent electronic message, in conformity with the contract of sale

(b) To obtain any export licence or other official authorisation and carry out all the customs formalities for the importation of goods.

(c) To arrange for the carriage of goods to the named port of destination by the usual route in a seagoing vessel and to pay its costs and freights.

(d) To obtain cargo insurance as agreed in the contract and to provide buyer with the insurance policy or other evidence of insurance cover.

(e) To deliver goods on board the vessel at the port of shipment on the date, or within the period stipulated.

(f) To give buyer sufficient notice that the goods have been delivered on board the vessel.

(g) To pay the costs of checking quality, measuring weighing, counting, packing and marking of the goods.

The Buyer’s Obligations:

(a) To pay the price as provided in the contract of sale.

(b) To obtain import licence or other official authorisation and carry out all customs formalities for the importation of goods.

(c) To take the delivery of goods when the goods have been delivered in accordance with the terms of the contract.

(d) To pay all costs relating to goods from the time have been delivered in accordance with the terms of the contract.

(e) To pay, unless otherwise agreed, the costs of pre-shipment inspection except when mandated by the authorities of the country of exportation.

 

 

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