INTRODUCTION
C.I.F. stands for "Cost Insurance and Freight". It is a contract which imposes a variety of duties to the seller. In general this contract is known as a contract for sale and shipment of goods to the agreed destination. The payment is this regard is made against the production of the appropriate documents according to the contract.
In such situations goods in transit are always a target for opportunists and thieves. Fire can break out almost anywhere. More rarely, road and rail accidents occur. Goods carried across water are subject to the predictable risks of loss or damage during the course of loading and of discharging, by sinking, stranding, by the ingress of water, by contamination by other goods, sweating and damage through shifting, etc. Perishable goods suffer if delayed. Some cargoes, especially bulk cargoes, suffer a measure of inevitable loss due to natural shrinkage or to the difficulties of accurately measuring or assessing their true weight on loading and discharge. Cargoes carried by air tend to suffer less damage but as non-perishable air cargo is often of high value. International carriage can involve partial carriage by sea, road and rail with transhipment and consolidation for the purposes of making up full loads. Each operation increases the risk of goods going astray or becoming damaged. This makes the condition of both the seller and the buyer miserable. Under the Sales of Goods Act the goods passes at the time when the both parties intend it to pass this way both the both parties have some duties. But in case of a CIF contract the seller undertakes more obligation than the buyer.
Generally, the seller is to ship the goods according to the contract; he is to arrange for carriage of the goods; he makes out the invoices to the buyer; he also tenders these documents to the buyer. The seller must ship the goods, which means that the seller is obliged to ship the goods to the appropriate place and on the agreed date. At this point the seller has the full responsibility to determine exactly the time and the place, when and where he has placed the goods on the port, he is obliged to nominate the vessel as well.
The buyer has to pay the seller upon the documents, such as the bill of lading, insurance policy, seller's invoice and others. When the seller will deliver the goods, the buyer has to receive them, in this case the goods are at the risk of buyer, and the property passes to the buyer. But, the property passes only when the seller makes the bill of lading. The seller must tender the right to possession of the goods to the buyer to be entitled to payment along with the invoices as well as the insurance policy. The most important thing is that the buyer has the right to reject the goods if the documents and the goods are not in order.
Thus, in case of CIF contract for sale the property in goods passes only when the documents are transferred and paid for. In addition, when there is a case of undivided shares of goods, the property passes when the goods are discharged.
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