RIGHTS AND DUTIES UNDER PRINCIPAL INCOTERMS: You have learnt various Incoterms. Let us now discuss in brief the provisions for the two major terms viz., FOB and CIF. ,
FOB (named port of shipment) Contract: Following are the duties of exporter under FOB contract:
i) Supply the contracted goods in conformity with the contract of sale and deliver the goods on board the vessel named by the buyer at the named port of shipment.
ii) Bear all costs and risks of the goods until such time as they shall have effectively passed the ship's rail.
iii) Provide at his own expense the customary clean documents in proof of the delivery of the goods.
Duties of the importer include:
i) Reserve the necessary shipping space and give due notice of the same to the exporter and
ii) Bear all costs and risks of the goods from the time they have effectively passed the ship's rail and pay the price as provided for in the contract.
CIF (named port of destination) Contract: Following are the duties of the exporter under CIF contract:
i) Supply the goods in conformity with the contract of sale, arrange at his own expose for the shipping space by the usual route and pay freight charges for the carrier of goods.
ii) Obtain at his own risk and expense all documentation regarding governmental authorisation necessary for the export of goods.
iii) Load the goods at his own expense on board the vessel at the port of shipment. He should procure at his own cost in a transferable form a policy of marine insurance for a value equivalent of c.i.f plus 10 per cent.
iv) Bear all risks until the goods have effectively crossed the ship's rail and furnish to the buyer a clean negotiable bill of lading.
Duties of the importer include:
i) Accept the documents when tendered by the exporter, if these are in conformity with the contract of sale and pay the price.
ii) Receive the goods at the port of destination and bear all costs except freight and marine insurance incurred in respect of the carriage of the goods.
iii) Bear all risks of the goods from the time they have effectively passed the ship's rail at the port of shipment.