1. •D E F I N I T I O N O F C I F C O N T R A C T
•R E L A T I O N B E T W E E N S E L L E R A N D B U Y E R
INTRODUCTION
2. SELLER OBLIGATION
To ship goods or to buy conforming goods afloat;
To procure a contract of carriage by sea and to obtain
the bill of lading;
To arrange insurance;
To tender these documents.
3. BUYER OBLIGATION
To accept the documents and pay contract price(if
they are proper with the contract terms);
To receive the goods at the agreed port of destination
and bear all costs and;
To bear all risks of the goods from the time of
shipment;
To pay the costs and charges in obtaining certificate
of origin and consular documents;
To pay Custom duties and taxes and any other duties
including license permit payable consequent upon
the importation.
4. BUYER ADVANTAGES
will be able to know the exact price he has to pay for
the goods including the freight and insurance;
is released from the burdensome duties and cost of
securing shipping space, arranging the carriage
contract, and procuring the insurance policy;
can resell the goods before they arrive, because of the
use of documental contract, whereby the documents
represent the goods;
5. SELLER ADVANTAGES
is assured of getting his payment back through
showing the documents even the goods are damaged
or never arrived;
can charge a higher price for the extra price for the
extra service e.g. obtaining shipping space,
insurance;
get paid as the documents tendered to the buyer or
to the buyers bank, he get paid before the goods
arrival to its destination;
6. DISADVANTAGES
The buyer can recover the accidental loss through his
insurance but that will be time consuming.
The separation of risk and the passing of property may
causes problems to buyer, as he may not be able to bring
an action in tort for damage done to the goods prior to
his obtaining property or a right of possession in those
goods.
According to Scrutton J CIF contract is nothing more
than a sale of document , it is not a contract that goods
shall arrive, but a contract to ship goods in accordance
with contract.
7. CONCLUSION
importers are free from managing shipping space
seller’s payment is secure and he can claim extra
charge also
