15 Obligations of buyer under CIP terms of Delivery


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Tips to Buyers when contracting terms of delivery as CIP


Before discussing duties and responsibilities of buyer under CIP terms, let us have an easy and quick reference on CIP terms.


15 Obligations of buyer under CIP terms of Delivery copyHow does CIP term work?

CIP term means ‘Carriage and Insurance paid to’ (named destination).  The seller makes all required arrangements at his on cost and risk to deliver cargo at first carrier of goods nominated by him.  Apart from the cost of carriage up to the destination mentioned in CIP terms, seller arranges insurance up to the said destination at his own cost.  The liability on risk passes to buyer once after delivery of goods to first carrier, if more than one carrier involved under CIP terms. The buyer meets all expenses from the destination point to take delivery of goods to his premises at buyer’s own costs and risks.


I have written elaborately on duties and responsibilities of seller under CIP terms in a separate article in this web blog.   Now, let us find the major responsibilities of buyer, when making terms of delivery as CIP.


15 tips to be noted by Buyer under CIP terms of delivery:


1.    Once goods arrived at port of destination, buyer has to arrange clearance of goods to get at his premises at his own costs and risks under CIP terms.  Necessary import license and other legal documentation at importing country have to be arranged by buyer at his own cost.

2.    Under CIP terms also, Like any business, buyer has to pay the price of goods under mutually contracted terms with seller.

3.    Accepting delivery of goods at destination place mentioned in contract is the responsibility of buyer under CIP terms

4.    All necessary costs at importing country to reach the goods at buyer’s premises is the liability of buyer under CIP terms.

5.    Once after taking delivery of goods, it is the duty of buyer to intimate seller by electronic message or other means of communication.

6.    Under CIP terms, any mandatory pre inspection expenses insisted by government agencies or other concerned at exporting country need to be paid by the seller.  However, if any specific pre inspection advised by buyer other than contracted if required, need to be paid by the buyer.

7.    In a CIP terms, although minimum insurance coverage is under the responsibility of seller at his own cost up to named destination, buyer has to bear the cost of any additional insurance if he (buyer) requires.

8.    Normally seller arranges additional insurance at buyer’s cost under CIP terms of delivery.  However, it is the duty of buyer to provide complete information on such additional insurance details about the goods to seller.

9.    If any loss or damage of goods us under the risks of buyer under CIP terms.

10.    From the point of delivery of goods to first carrier by seller, the risks on goods passes to the buyer up to the final destination under CIP terms of delivery.

11.    Under CIP terms of delivery, the buyer has to complete import clearance procedures within the stipulated period of time, failing which seller is not responsible for any loss on such delay.

12.    In CIP terms, the expenses occurring other than the contract of carriage in transit to final destination is on account buyer.

13.    Loading and unloading expenses up to the named destination other than contract of carriage has to be met by the buyer under CIP terms of delivery.

14.    Under CIP terms, the buyer has to send notice to seller, if seller fails to meet delivery schedule.  The loss on default of delivery schedule and other inconvenience are on account of buyer unless he intimate on the subject matter with the seller on time.

15.    Buyer has to reimburse expenses to seller on additional jobs undertaken by the seller specifically required by the buyer other than contracted carriage.

I hope the above 15 tips  can help  buyers to handle their consignments under CIP terms easily.


Detailed articles about Inco Terms of Delivery under export and import of International business  have been mentioned in  separate category – INCO TERMS – in this web site.  You can click here to read.

Do you have different thought on CIP terms of delivery? Comment below:


The above information is a part of Online Training Course on howtoexportimport

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Johannes Jocobs: Hi guyz just wanna know more about incoterms 2010 rules, and what is the defference between 2000 rules and 2010 rules?

Md. Saeedur Rahman: If under CIP Terms the Port of Entry is not mentioned rather stated as "Port of Entry into Bangladesh", will there be any problem in handling the Goods procurement by the public entity?

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