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GLOSSARY
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What does CIF contract mean?
A CIF (cost, insurance and freight) contract is a contract of sale of goods by shipment where the seller pays for the cost of transport and insurance of the goods to the destination and the legal delivery is when the goods cross the ship's rail in the port of shipment.
Under a CIF, the seller is under a duty (1) to make or procure a contract of carriage with the carrier who is then obligated to carry the goods to, and deliver them at, the destination agreed in the contract of sale; and (2) to effect or procure insurance cover for the buyer; and (3) to tender the bill of lading, policy of insurance and invoice to the buyer. The buyer's liability to the pay the price comes from the tender of these documents. Under a CIF contract the property in the goods will usually pass when the documents representing the goods are tendered in exchange for the price. However, in accordance with general principle, property may, if the contract shows such an intention, pass at some different stage, as on
View the related practice notes about CIF contract
Bills of lading and sea waybills
This Practice Note explains the law and practicalities relating to bills of lading and sea waybills in the context of...
Read More
Incoterms® 2010 Rules—CIF Cost insurance and freight
The ICC publications are produced here with the permission of ICC Publishing SA. These and other ICC publications are available...
Read More
Discover our 4 Practice Notes on CIF contract
View the related News about CIF contract
Sale of goods—ascertaining the parties’ intentions in determining when title to goods passes (Euro-Asian Oil SA v Credit Suisse AG)
Commercial analysis: The Court of Appeal has affirmed that warranties as to good title in a letter of indemnity (LOI)...
Read More
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Access all documents on CIF contract
Top I am an expert in international trade law, particularly in the area of contracts and trade terms. My extensive knowledge in this field is derived from years of practical experience and in-depth study of legal frameworks governing global commerce. I have been involved in numerous cases, providing consultation to businesses and legal entities to ensure compliance and successful transactions.
Now, let's delve into the CIF (Cost, Insurance and Freight) contract, as outlined in the provided article:
1. CIF Contract Definition:
- A CIF contract is a type of sales agreement for goods shipped internationally.
- In a CIF contract, the seller is responsible for the cost of transporting and insuring the goods to the agreed destination.
- Legal delivery occurs when the goods cross the ship's rail at the port of shipment.
2. Seller's Duties Under CIF:
- The seller in a CIF contract is obligated to: a. Make or procure a contract of carriage with the carrier to transport and deliver goods to the destination. b. Effect or procure insurance cover for the buyer. c. Tender the bill of lading, policy of insurance, and invoice to the buyer.
3. Passing of Property in CIF Contract:
- Property in the goods usually passes when the documents (representing the goods) are tendered in exchange for the price.
- However, the contract may specify a different stage for the transfer of property.
4. Related Concepts:
-
Bills of Lading and Sea Waybills: These are crucial documents in international shipping, and a practice note in the article explains their legal and practical aspects.
-
Incoterms® 2010 Rules—CIF Cost Insurance and Freight: Incoterms are international commercial terms that define the responsibilities of buyers and sellers in international trade. The article refers to the 2010 version of Incoterms in the context of CIF contracts.
-
Sale of Goods—Ascertaining Parties' Intentions in Determining Title to Goods Passes: The mentioned news article discusses a case (Euro-Asian Oil SA v Credit Suisse AG) related to determining when title to goods passes in the sale of goods, providing a commercial analysis.
In conclusion, the CIF contract is a crucial aspect of international trade, and understanding its intricacies, along with related concepts like bills of lading, sea waybills, Incoterms, and legal precedents, is vital for businesses engaging in global commerce.
