1、I.Guidance Note“Cost and Freight”means that the seller delivers the goods on board the vessel or procures the goods so delivered1)Transfer of risksThe dividing point of risks is the same as that of FOB:on board the vessel.2)Allocation of costsThe dividing point of costs is the port of destination.Tw
2、o critical points are involved,which is different from FOB,only one point.3)Additional costsThe risks and additional costs after the goods are placed on board the vessel are to be borne by the buyer,same as FOB.4)Export clearanceby the seller,same as FOB.5)Obligation to deliver When CPT,CIP,CFR or C
3、IF are used,the seller fulfils its obligation to deliver when it hands the goods over to the carrier in the manner in the chosen rule and not when the goods reach the place of destination.The seller must pay and freight necessary to bring the goods to the named port of destination,but not deliver th
4、e goods to the destination.6)CFR may not be appropriate where the goods are handed over to the carrier before they are on board the vessel,for example,goods in containers,which are typically delivered at a terminal.In such circumstances,the CPT rule should be used.II.Sellers and Buyers Obligations 1
5、.A3.Contracts of carriage and insurance:Contract of carriage:1)The seller must contract for carriage with the carrier at his own expense,charter the ship or book the shipping space.2)The seller must pay the freight necessary to bring the goods to the port of destination.3)Article 32.2 of CISG:“If th
6、e seller is bound to arrange for carriage of the goods,he must make such contracts as are necessary for carriage to the place fixed by means of transportation appropriate in the circumstances and according to the usual terms for such transportation.(如果卖方有义务安排货物的运输，他必须订立必要的合同，以按照通常运输条件，用适合情况的运输工具，把货物
7、运到指定地点。)Therefore,if the seller does not arrange for the carriage of the goods to the destination,he violates the contract.4)Contract for insurance:The seller has no obligation to the buyer to make a contract of insurance.32.3 of CISG:“If the seller is not bound to effect insurance in respect of the
8、 carriage of goods,he must,at the buyers request,provide him with all available information necessary to enable him to effect such insurance.”如果卖方没有义务对货物的运输办理保险，他必须在买方提出要求时，向买方提供一切现有的必要资料，使他能够办理这种保险。B3.Contract of Carriage and Insurance:The buyer has no obligation to the sellerUnder CFR contract,the
9、 seller is responsible for the carriage of the goods,so the buyer has no obligation to the seller to sign a contract of carriage.As to the insurance,the buyer has no obligation to the seller.(对卖方无义务办理保险，办理保险对自己有利，对卖方无义务办理保险，办理保险对自己有利，而不是对卖方尽义务。）而不是对卖方尽义务。）But,it is in the buyers interest to procure
10、insurance for the goods when they have place on borad the vessel.Under CFR,the buyer usually procures insurance for the goods.When the goods are on board,the risks of loss of,or damage to the goods are then transferred from the seller to the buyer.So whether the goods are to be insured and against w
11、hat risks the goods should be insured rest wholly with the buyer.A4:Delivery The seller must deliver the goods on board the vessel at the port of shipment on the date or within the agreed period.B4.The buyer must take delivery of the goodsand receive them from the carrier at the named port of destin
12、ation.货物已按 A4条的规定交付时，买方必须提取提取货物，并在指定目的港向承运人收取收取货物。Two receiving points under CFR:1)on board the vessel at the port of shipment.In practice,at this point the carrier receives the goods delivered by the seller.2)at the port of destination.In practice,at this point the buyer receives the goods from the
13、 carrier,which is a contractual obligation of the buyer to the seller.If the buyer fails to fulfill this obligation,it should reimburse the seller the additional costs incurred because of the buyers violation of the contract.A5:Transfer of risks “risks of loss of or damage to the goods”here do not i
14、nclude the risks caused by the buyer.For example,if the buyer fails to give notice in accordance with B7,the risks of loss of or damage to the goods should be borne by the buyer(Premature transfer of risks).B5.The buyer bears all risks of loss of or damage to the goods from the time they have been d
15、elivered as envisaged in A4.a.“risks of loss of or damage to the goods”are related to risks of contingencies on the sea,such as storm,fire,collision,etc.The risks do not include the loss or damage to the goods caused by the seller,such as insufficient packing,the goods that contain defects,etc.Even
16、if such risks happen after the goods are on board,the seller is still responsible as long as such loss or damage is caused by the his misconduct.b.“The buyer must,from the agreed date or the expiry date of the period fixed for shipment”This stipulation tells us in what circumstances the risks are tr
17、ansferred prematurely.According to CFR term,sometimes,the buyer has the right to determine the time of delivery.In this case,the buyer should give sufficient notice to the seller.If not,the contract goods have to be stored somewhere at or near the port of shipment.The risks and additional costs sust
18、ained by the seller shall be borne by the buyer even if the risks and costs occur before the goods are on board the vessel.Article 143 of Law of Contract stipulates因买受人的原因致使标的物不能按照约定的期限交付的,买受人应当自违反约定之日起承担标的物毁损、灭失的风险。“provided,however,that the goods have been clearly identified as the contract goods”
19、This is a precondition of premature passing of risks.If the goods are not set aside as the contract goods,the risks do not transfer prematurely even if the buyer fails to give sufficient notice to the seller.A6,B6.Allocation of cost What should the seller pay under CFR terms?a.all the costs until th
20、e goods are delivered on board at the port of shipment.b.the normal freight from the port of shipment to the port of destination c.and all other costs including the costs of loading the goods on board and any charges for unloading at the agreed port of discharge,that were for the sellers account und
21、er the contract of carriage.d.where applicable,costs of customs formalities for export and all duties,taxes and other charges payable upon export,and the costs for their transport through any country that were for the sellers account under the contract of carriage.B6:The buyer must,subject to the pr
22、ovisions of A3 a),pay(除A 3条 a)款规定的情形外.The buyer is responsible for all costs and additional costs from the time they have been delivered on board excluding freight(“lighterage”（驳船费）“warfage”（码头费）)A7&B7 A7:Notice to the buyer:“The seller must give the buyer any notice needed in order to allow the buy
23、er to take measures that are normally necessary to enable the buyer to take the goods.”The notice should be sent without any delay in time,and must be detailed in content so as to enable the buyer to take measures to take the goods including procuring insurance.If the seller fails to do so,it should
24、 bear the responsibility of breach of the contract.B7.Notice to the sellerThe buyer must,whenever it is entitled to determine the time for shipping the goods and/or the point of receiving the goods within the named port of destination,give the seller sufficient notice thereof.The buyer must give the
25、 seller sufficient notice as to the time for shipping and port of destination.If the buyer fails to do so,the risks of loss of or damage to the goods are transferred to the buyer before the goods are delivered in accordance with A4.The additional costs incurred will also be borne by the buyer.If the
26、 seller pays first,then it has the right to get reimbursed from the buyer.A8&B8:A8.a.the usual transport document may be a negotiable bill of lading,a non-negotiable sea waybill or an inland waterway document.1)It must be dated within the period agreed for shipment.2)If the buyer wants to sell the g
27、oods in transit,then a negotiable bill of lading must be presented.3)a full set of originals must be presented to the buyer.4)If not,any one taking one original bill of lading may take delivery of the goods at the port of destination from the carrier.B8.The buyer must accept the transport document p
28、rovided as envisaged in A8 if it is in conformity with the contract.If the buyer refuses to accept the transport document,it breaks the contract.The seller may lodge a claim against the buyer.But if the documents presented have discrepancies,the buyer has the right to refuse the documents and instru
29、ct the issuing bank to refuse to pay.Sometimes,the seller asks the carrier to issue a clean bill of lading against a letter of indemnity,even if several cartons are broken.But if the buyer can prove that the defects or damages existed before they were loaded on board,the buyer can lodge a claim agai
30、nst the carrier with a clean bill of lading,or lodge a claim against the seller according to the sales contract.The carriers responsibilities can not be released against a letter of indemnity.Case Analysis CIF 1.The biggest difference between CIF and CFR is that in CIF the seller also has to 1)procu
31、re marine insurance against the buyers risk of loss of or damage to the goods during the carriage.(卖方还应当为货物在运输中卖方还应当为货物在运输中灭失或损害的买方风险办理保险。灭失或损害的买方风险办理保险。)2)contract for insurance and pay the insurance premium.2.The seller is required to obtain insurance only on minimum cover.Under CIF,the seller has
32、 the obligation to procure insurance for the benefit of the buyer.However,sometimes,it would not know the buyers precise requirements.Under the Institute Cargo Clauses（协会货物保险条款 ICC）drafted by the Institute of London Underwriters(伦敦保险人协会),insurance is available in“minimum cover”under Clause C.（C款规定办理
33、“最低程度”的保险。）ICC(C)clause(1982):The insurance company is only responsible for the losses or damages to the goods caused by serious accidents excluding losses or damages caused by natural disasters or non-serious accidents.Risks covered 1.loss of or damage to the subject-matter（标的物）（标的物）insured reasona
34、bly attributable to1)fire or explosion2)vessel or craft（驳船）being stranded（搁浅）grounded（触礁）sunk（沉没）or capsized（倾覆）3)overturning（倾覆）or derailment（出轨）of land conveyance（陆上运输工具）4)collision or contact of vessel craft or conveyance with any external object other than water（船舶、驳船或运输工具同除水以外的任何外界物体碰撞）5)discha
35、rge of cargo at a port of distress（避难港）2.loss of or damage to the subject-matter insured caused by1)general average sacrifice2)jettison（抛货）CIC clause(1981):The seller will insure the goods against FPA as per Ocean Marine Cargo Clauses(1/1/1981)of the Peoples Insurance Company of China.3.Should addit
36、ional cover be required by the buyer,it should agree with the seller that the latter could take out additional insurance,but the additional insurance premium should be borne by the buyer.Or,the buyer may arrange for extended insurance cover himself.For example,risks beyond ICC(A)such as war risk and
37、 SRCC.4.The insurance value/amount（投保金额，保险金额）:Since the seller is procuring insurance for the benefit of the buyer,the minimum insurance value should be the 100%of the contract value plus 10%to cover a reasonable profit and some expenses,i.e.110%of the invoice value.If the buyer requests insurance to cover more than 110%,say 120%,130%,the extra premium will be for the buyers account.
