Standard trade terms

Emilie Schou
Mind Map by Emilie Schou, updated more than 1 year ago
Emilie Schou
Created by Emilie Schou over 6 years ago
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Law second year International commercial transactions (Standard trade terms) Mind Map on Standard trade terms, created by Emilie Schou on 04/28/2015.

Resource summary

Standard trade terms
  1. I. Ex works
    1. S undertakes to have goods available for collection by B at S's premises (factory,...)
      1. Commercial Fibres (Ireland) v Zabaida: likely that the contract stipulates that S is to pack the goods for export at B's expense
        1. If parties have incorporated Ex Works INCOTERMS 2010, S is required to provide 'at its own expense package the goods in the manner appropriate for their transport, unless the buyer has notified S of specific packaging requirements before contract of sale is concluded'
          1. Arrangements of cargo, insurance cover, obtaining export licences and import licences have to be made by B
          2. II. CIF contract (see separate mindmap)
            1. III. C&F contracts
              1. S undertakes to contract for carriage of goods but not insurance
                1. The Pantanasa: C&F contracts only differ from CIF contracts in that S is not required to insure the goods for B
                2. IV. FOB contracts (see separate mindmap)
                  1. Attempts to deal with cross-border sale uncertainty issue
                    1. CISG (see separate mindmap)
                      1. INCOTERMS
                        1. series of pre-defined commercial terms published by the International Chamber of Commerce (ICC) widely used in international commercial transactions
                          1. They are a series of three-letter trade terms (FOB, CIF, FAS ...) related to common sales practices.
                            1. INCOTERMS rules are intended primarily to reducing uncertainty by setting out clearly the tasks, costs and risks associated with the transportation and delivery of goods
                              1. INCOTERMS >< UK trade terms
                            2. Documentary sales
                              1. "… [T]he seller agrees to dispatch goods rather than deliver them at their intended destination, and to procure for the benefit of the buyer the contract of carriage and any other ancillary contracts that may be agreed, e.g. of marine insurance, and make over to the buyer the contract documents or other documents embodying the essential terms. Documentary sells involve as a minimum the transfer to the buyer of documents of control over the goods - typically a bill of lading or a warehouse warrant - to enable the buyer to sell or pledge the goods while they are still in transit or in independent warehouse".
                                1. Two key elements are, for the seller (in addition to transferring property like in any normal sales):
                                  1. procure or help procure the contract for the carriage; and
                                    1. provide documents to the buyer for carriage and, as the case may be insurance
                                    2. Bill of lading
                                      1. Document signed by a carrier (a transporter of goods) and issued to a consignor (the shipper of goods) that evidences the receipt of goods for shipment to a specified designation and person
                                        1. 1) A receipt for delivery of goods
                                          1. The B/L acknowledges receipt of the goods by the carrier. It “itemizes” the goods, and states that they have been received in apparent good condition
                                            1. If the goods are not in good condition, then the carrier should say so on the B/L, eg. “Some barrels leaking”, “packaging damaged” etc. In that case, the B/L is said to be “claused” as opposed to “clean”.
                                            2. 2) Contract of transport: It will contain the terms of the contract for carriage, which normally be a separate document.
                                              1. 3) Evidence of title over the goods
                                                1. Delivery by the carrier at the destination will be made against the presentation by the buyer of the B/L. It proves that the buyer is the right to person to whom the goods can be handed over
                                                  1. In law the bearer or holder of the B/L will be deemed to be the owner of the goods. The B/L is regarded, in law, as evidencing the rights of ownership and possession over the goods, so that the holder may sell the goods or pledge them during transport (that is, before delivery).
                                                2. Nature of documentary sales
                                                  1. Two separate main obligations for the seller: Delivery of Goods and Delivery of Documents
                                                    1. The delivery of documents is entirely independent of the delivery of goods
                                                    2. What are the different types of transactions that can be made under English law?
                                                      1. Ex works: goods made available at the place of the seller, no transport at all, no insurance (very little responsibility on S)
                                                        1. Delivered duty paid (DDP): Seller must pay for all of the costs related to transporting the goods and is responsible in full for the goods until they have been received and transferred to the buyer. This includes shipping, the duties and any other expenses incurred while shipping the goods (very little responsibility on B)
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