SHIPPING DOCUMENTS THAT A CARRIER MUST DELIVER TO A BUYER UNDER COST C.I.F CONTRACT

 

The shipping documents in C.I.F contracts are basically three unless otherwise agreed by parties other documents can be attached together with the following:

1. Bill of Lading.
2. Marine Insurance.
3. Policy and Invoice.

Bill of Lading

This valued document in international trade is used in both C.I.F. and F.O.B. contracts. The authoritative definition of bill of lading was uttered in the case of Lickbarrow v Mason (1974). In this case, it was stated that, a bill of lading is the formal receipt by ship owner that good have been received for shipment in the stated condition and quality, is the memorandum which evidence and repeats in detail the contract of carriage by sea and lastly it is a document of title to the goods which enable the consignee to dispose the goods by endorsement or delivery.

Marine Insurance Policy

This document provide constant cover from the port of shipment to the port of discharge in the manner that whatever peril happen in the goods during transit the buyer will have a cause of action on the bill lading against the carrier or against the underwriters on the insurance policy. Marine insurance is used mutually under C.I.F. and F.O.B. contracts particularly in F.O.B. Contract with additional services.

A contract of marine insurance is an agreement of the parties or custom of trade extended so as to protect the assured against losses on inland waters or land which are incidental to the sea voyage.

The terms of the international contract of sale provides as to who bares the costs for the marine insurance in international export and imports of goods. For example, where parties engages C.I.F contract, it is the duty of the seller to undertake marine insurance policy and settle all the demanding costs. On the other hand, in F.O.B contract as the name suggests, the question of insurance is not that contemplated.

Thus, where parties engages F.O.B terms it is the principle duty of the buyer to undertake marine insurance unless it is F.O.B with additional services where the seller may undertake such insurance policy upon the request of the buyer and in account of the buyer.

The Invoice

This is another vital document preferred in both F.O.B. and C.I.F. contracts. Invoice normally debits the buyer with the agreed price or the actual cost, commission charges, freight and insurance premium. The invoice must be fulfilled in strict agreement with terms of contract to avoid difficulties in payments particularly when documentary credits are involved.