Question

3. The. Macon Whoopies, a newly-formed.hockey club, contracts to buy 150 hockey pucks from a whole- saler in Youngstown, Ohio. What are the wholesaler's delivery obligations if the agreement states each of the following? a. F.O.B. Macon b. F.O.B. Youngstown. C. - C.I.F. Macon d. Ship to Macon Whoopies.. Macon, Georgia (Explain.)

Answer 1

This is a question about inco-terms

a) FOB Macon - Means Free On Board at Macon. Thus, the wholesaler has to deliver the goods on the ship till Macon (includes cost of goods, Loading at Youngstown and freight till Macon). There is no insurance specified, thus insurance is not in the scope of the wholesaler

b) FOB Youngstown - Means Free On Board Youngstown. The wholesaler in this case doesnt have to bear the cost of freight (From Ohio to Macon). He's responsible just to load it on the ship.

c) CIF Macon - Means Cost Insurance Freight till Macon - Thus, according to such a contract, the wholesaler has to bear the cost of the goods, the loading and unloading charges and freight till Macon port and also the insurance of the goods.

d) When the address is being specified, the wholesaler has to deliver the goods to the exact address,including inland freight. But since this is not a standard inco-term, the contract will have to be studied to see if insurance is to be covered by the Wholesaler or the Macon Whoopies