Question

Sns g contract, is he exporting or importing? II Case studies 1. An FOB contract stipulated "The shipment will be effected in March 2011. When the goods were ready on 10 March 201 1, the seller contacted the buyer for shipment details. The buyer faxed "Please send the goods to the port for loading on 21 March. The vessel will depart on 22 March." The seller sent the goods to the port accordingly. However the nominated vessel did not turn up and the goods had to be stored in the warehouse at the port. On the night of 21 March a fire happened in the warehouse area and part of the goods was damaged. When the vessel arrived two days later the seller and the buyer had an argument about the settlement of the loss. The seller required the buyer to bear the loss caused by the fire, but the buyer believed that the vessel arrived within the shipment period and the loss occurred before the seller delivered the goods therefore the seller should bear the loss. Please provide your solution 2. A contract to sell grain used a CFR term. The grain was officially certified as Grade One at the time of being delivered on board at the port of shipment. After making the shipment, the seller gave the buyer timely notice. However, due to the long voyage, some grain went bad. At the destination, the grain could only be sold as "Grade 3 ". Consequently, the buyer claimed compensation for the damage. Should the seller pay?

Answer 1

1. THE SELLER SHOULD BEAR THE LOSS, BECAUSE HERE THE "FOB" CONTRACT IS STIPULATED. THE TERM FOB IS THE ACRONYM FOR THE TERM "FREE ON THE BOARD". IT IS A CONTRACT WHEREBY THE SELLER OF GOODS AGREES TO ABSORB THE COSTS OF DELIVERING THE GOODS TO THE PURCHASER'S TRANSPORT OF CHOICE. THE DELIVERY FREE ON BOARD (FOB) ONLY MEANS THE PRICE SHALL BE THAT WHICH WE STIPULATE FOR, AND YOU SHALL NOT HAVE TO PAY FOR THE WAGONS OR CARTS NECESSARY TO CARRY THE PRODUCT FRO, WHERE IT IS DUG. WE WILL BEAR ALL THOSE CHARGES AND PUT IT FREE ON BOARD THE SHIP, THE NAME OF WHICH YOU ARE TO FURNISH. SO IT IS CLEAR FROM THE TERMS OF THAT CONTRACT ITSELF THAT THE SELLER SHOULD BEAR THE LOSS.
   
   
2. THE SELLER SHOULD NOT PAY THE LOSS, BECAUSE HERE THE CONTRACT IS "CFR" WHICH IS THE SHORT FORM FOR THE TERM "COST AND FREIGHT". IT IS A LEGAL TERM AND TYPE OF CONTRACT IN INTERNATIONAL TRADE, WHICH SPECIFYING THAT A SELLER IS REQUIRED TO ARRANGE FOR THE CARRIAGE OF THE GOODS BY SEA TO A PORT OF DESTINATION AND PROVIDE THE BUYER WITH THE DOCUMENTS NECESSARY TO OBTAIN THEM FROM THE CARRIER. UNDER "CFR"THE SELLER DOES NOT HAVE PROCURE MARINE INSURANCE AGAINST THE RISK OF LOSS OR DAMAGE TO THE CARGO DURING TRANSIT.