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Trading terms
Time:2011-1-31 10:20:29 Author:admin
EX Works (EXW) means that the seller delivers when he places the goods at the disposal of the buyer at the seller’s premises or another named place (i.e. works, factory, warehouse, etc.) not cleared for export and not loaded on any collecting vehicle. This term thus represents the minimum obligation for the seller, and the buyer has to bear all costs and risks involved in the taking the goods from the seller’s premises.
However, if the parties wish the seller to be responsible for the loading of the goods on departure and to bear the risks and all the costs of such loading, this should be made clear by adding explicit wording to this effect in the contract of sale. This term should not be used when the buyer cannot carry out the export formalities directly or indirectly. In such circumstances, the FCA term should be used, provided the seller agrees that he will load at his cost and risk.
Free Carrier (FCA…named place) means that the seller delivers the goods, cleared for export, to the carrier nominated by the buyer at the named place. It should be noted that the chosen place of delivery has an impact on the obligations of loading and unloading the goods at that place. If delivery occurs at any other place, the seller is not responsible for unloading.
“Carrier” means any person who, in a contract of carriage, undertakes to perform or to procure the performance of transport by rail, road, air sea, inland waterway or by a combination of such modes.
If the buyer nominates a person other than a carrier to receive the goods, the seller is deemed to have fulfilled his obligation to deliver the goods when they are delivered to that person.
Free On Board (FOB…Named Port of Shipment) means that the seller completes delivery when the goods pass the ship’s rail at the named port of shipment and the buyer has to bear all costs and risks of loss of or damage to the goods from the point of delivery.
The FOB term requires the seller to clear the goods for exports. The seller pays all costs until the goods have passed the ship’s rail on the named vessel as well as all costs relating to export including duties, taxes and customs formalities. This term can be used only for sea or inland waterway transport. The seller assumes all risks of loss or damage to the goods until they have passed the ship’s rail on the named vessel as provided in the sales contract.
Cost and Freight (CFR…Named Port of Destination) means that the seller delivers when the goods pass the ship’s rail at the port of shipment. The seller must pay the cost and freight necessary to bring the goods to the named port of destination but the risk of loss of or damage to the goods, as well as any additional costs due to events occurring after the time of delivery, are transferred from the seller to the buyer.
Cost, Insurance and Freight (CIF…Named Port of Destination) means that the seller completes delivery when the goods pass the ship’s rail at the port of shipment. The seller must pay the costs and freight necessary to bring the goods to the named port of destination but the risk of loss of or damage to the goods, as well as any additional costs occurring after the time of delivery, are transferred from the seller to the buyer. However, in CIF the seller also has to procure marine insurance.