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International Sale of Goods
International sale of goods isthe exchange of goods and
services between countries.
Goods are to be transportedfrom the sellers premises to
the buyers premises overseas.
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United Nations Convention on
Contracts for the International
Sale of Goods- Vienna Convention UN-sponsored convention that establishesuniform-rules fordrafting
international salescontracts, and sets the
legal rights and obligations of the seller
and the buyerunder such contracts. CISG
rulesapplyautomatically to the
sales contracts between the countries whohave ratified the convention.
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Problems associated in the
international trade transaction
1.An international sale will usuallyinvolve a sea transit
2. Customs need to be cleared
3. Import and export licenses need tobe obtained.
4. International sales raise conflict of
laws problems 5. Financial problems
6. Fluctuations in currency
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INCOTERMS or international
commerce terms
International Chamber of Commerce(ICC) has introduced quite a number ofspecial trade terms in use for international
trade. These terms have simplified the sale of
goods abroad. They are in universal use in
trade transactions Two extremely useful trade terms, namely:FOB and CIF
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FOB ( free on board)
In a FOB contract, the seller has to put the
goods on board a ship.
The price under an FOB contract includes
the cost of the goods and all expenses up
to the board the ship.
Once The delivery is completed then the
property and the risk pass to the buyer.
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Stock v Inglis (1884)12 QBD 573
The words free on board would mean that theshipper (seller) was to put the goods on board athis expense; and the goods so put on boardwould be at the risk of the buyer, whether theywere lost or not on the voyage
Wimble v Rosenberg (1913) 3 KB 743
The FOB is a contract for the sale of goods
where the seller agrees to deliver the goods overthe ships rail, and the buyer agrees to convey itoverseas.
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Types of FOB Contracts
Pyrene v Scindia Navigation-
(1954]
1. (The classic FOB OR classical FOB
2.extended FOB or FOB withadditional Services
3.Strict FOB.
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Duties of the F.O.B buyer
(a) To nominate the port of shipment, the
vessels name and procure the necessary
shipping space
(b) Nomination of a ship (c) To secure shipping space
d) To obtain the necessary import license
e) Pay any cost incidental to the shipment f) Pay the seller for the goods in accordance
with the contract
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Duties of the FOB seller
(1) To ship goods of contract
description at the named port of
shipment
2) To ship goods on time
(3) To obtain Export licenses
(4) To deliver the necessary documents
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CIF contracts
CIF stands for cost, insurance, freight
The letter CIF represents the threecontracts involved
1. The cost the sale contract
Insurance-the contract of insurance Freight- the contract of carriage.
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Shipping documents involved
in CIF contract
1.The commercial invoice,
2.A shipped bill of lading
3. policy of insurance during the seavoyage, and
4.Certificate of quality
5.Certificate of inspection 6.Certificate of origin
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Duties of the seller under a CIF
contract
1.To ship goods according to the
contract description
2.To enter into a contract of carriage in
order to deliver the goods.
3.To ensure that the goods are properly
insured under a contract of insurance
4.To procure and prepare proper
shipment documents.
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Duties of the buyer in a CIF
contract
1.Payment against documents
2. The buyer to name port of
destination
3. Buyer to take delivery
4. Import licenses
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REMEDIES IN INTERNATIONAL
SALES
Buyers remedies under CIF contract
(1) Rejection of the goods on arrival if
(2) Damages for non-delivery of thegoods.
3)Damages could also be claimed forlate delivery.
4. the buyer can reject the documents ifthe seller has not tendered the rightdocuments
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Sellers remedies in a CIF
contract
(1) Action for the price
(2) Damages for non-acceptance
(3) Damages for breach of warranty
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Carriage of goods
A contract whereby a person orcompany agrees to carry goods orpeople from one place to another for a
payment is called contract of carriage. carriage of goods can be
1.Carriage by land (including inland
waterways), 2.Carriage by sea
3.Carriage by air
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Classification of Carriers
(i) common carriers,
(ii) private carriers and
(iii) gratuitous carriers.
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Bill of Lading
Bill of lading is the official Legal
document signed by the captain,
agents, or owners of a vessel,
furnishing written evidence of thequality and quantity of cargo for the
conveyance and delivery of goods sent
by sea to a specific destination.
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Carriage of goods by sea
A contract for the carriage of goods by sea
is called as a contract of affreightment.
The word affreightment means the
hiring of a vessel or ship.
A contract of affreightment may take either
of the two forms
Charterparty
a bill of lading
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Conditions Contained in a
Contract of Carriage by Sea.
(i) Implied warranty of seaworthiness
(ii) Implied warranty of commencement
of voyage
(iii) Non-deviation of voyage
(iv) Shipper not to ship dangerous
goods