Question

I. True or False Questions :

1. The parties who have contracted on CIF terms may have varied some of the obligations undertaken by them. It is also possible that a contract expressed on CIF terms may contain clauses that suggest the parties never intended to contract on CIF terms. In this case, the nature of the contract would change.

2. The seller under CIF must obtain, at its own expense, cargo insurance complying at least with the minimum cover provided by Clauses (A) of the Institute Cargo Clauses (LMA/IUA) or any similar clauses.

3. The basic distinction between C- and D-terms becomes crucial when goods are damaged in transit. With D-terms, the seller is not liable for it, while with C-terms the seller may be liable for it.

4. As with other ICC rules, such as INCOTERMS, URC (Uniform Rules for Collection) needs to be specifically incorporated in the contract.

5. Where the cargo is sufficient to fill the entire cargo space of a ship, it is normal for the shipper to find space on a cargo liner service.

6. Tramp transportation means a Shipping Company engage their fleet of ships to carry cargo between predetermined ports at regular intervals, under publicly advertised schedule.

7. Unless received for shipment bill of lading contains an additional "on board notation", it does not confirm that goods have been shipped on board to a named vessel.

8. Under the doctrine of subrogation, the insurer will be entitled to recover from the liable party more than what he has paid out.

9. Since the UCP does not have the force of law, it will apply subject to any express terms. If an express term in the contract contradicts the UCP terms, the former prevails.

10. A negotiating bank will not normally have recourse to the seller if the issuing bank does not reimburse the negotiating bank due to discrepancies in the documents presented by the beneficiary.

Answer 1

1) True Explanation - When the contract expressed on CIF contains a clause that suggest the parties never intended to contract on CIF terms then in that case that contracts nature changes.

2) False Explanation- The seller should obtain cargo insurance as stated complying with Clauses (C) of of the Institute Cargo Clauses not Clauses (A).

(3)True-  with C-term seller may be liable for it however with D-terms seller is not liable.

(4) True- The INTERCOMS and URC has to be specifically mentioned in the contract.

(5)True- It is  common practice for shipper to find space on cargo liner service and then he obtains bill on landing.

(6)False- It is known as Liner shipping not Tramp transportation.

(7)True - "on board notation" is an important aspect to confirm goods are shipped on board on vessel.

(8) False- It should be assignee not insurer.

(9) True- The former will prevail if the express term contradicts UCP term.

(10) True- Yes the negotiating bank will have recource in this state.