商务英语case_study.docx

case study【Case 1】 CIF or Not?An import and export company H in China signed with a British company D a contract on CIF basis, whereby company H exported some light industrial products to company D. There were two special clauses in the contract: (1). e goods must be“ Th shipped to a port in Britain from Shanghai in October 1996; the relevant L/C opened by company D should reach company H by the end of August; company H must guarantee that the loaded vessel arrive at the destination not later than December 1. (2) should the loaded vessel arrive at the port of destination later than December 1, company D is entitled to cancel the contract. If the payment has been made at the time, it must be returned to company D exactly the amount. ” After that, in thecourse of clearing up contract files, a controversy arose in company H about the nature of this CIF contract. Some people held the opinion that the contract was on CIF basis in spite of the two particular terms, giving following reasons: firstly, the contract was signed under the trade term of CIF, which indicated the nature of the contract; secondly, company D made such special requirements only to protect their benefits; thirdly, the contract provided payment by L/C, which was in accordance with CIF term ’ sachtearristic of payment against documents. Others believed that according to INCOTERMS 2000, the seller ’ s delivery obligations are fulfilled as long as the seller has completed shipment of goods at the appointed point and handed over to the buyer documents stipulated in the contract and so the seller is not required to guarantee the arrival of goods at the destination. Therefore, this contract was a false CIF contract, as it changed the nature of CIF term by taking physical delivery as a condition of fulfillment. The contract must be renegotiated. Finally, company H reached a common perception and got the two special clauses amended through negotiation with company D. The contract was carried out smoothly.Analysis:Although the contract was concluded on CIF basis, it was not a genuine CIF contract. This case indicates the significance of CIF term ’ s sphere of application. Ttwo special clauses in the original contract not only contradicted with the nature of CIF term, but also disagreed with the practices of international justice and arbitration.First, the original contract not only set a limit to the date of arrival, but also stipulated that the buyer was entitled to cancel the contract or demand back the payment that had already been made. Evidently, the restrictive date of arrival served not as the date of payment, but as a condition of payment. Therefore, legally the contract was not a genuine CIF contract as it made physical delivery a condition of payment.Second, under CIF terms, the risk of loss of or damage to the goods passes from the seller to the buyer when the goods have passed the ship ’ s rail at the port ofshipment. A contract that expands the buyer ’ s risk from the port of shipment to theport of destination is not a CIF contract. According to the provision in the original contract, company H was obligated to refund the payment in case of natural calamities or accidents during the course of delivering the goods, which evidenced that the seller assumed all the risks during the transport.Third, under CIF terms, the buyer must make payment against documents rather than against the arrival of the goods at the port of destination, provided that the seller has fulfilled his delivery obligations and presented the required documents. As per the original contract, whether company H could receive the payment for goods or not depended on buyer ’ s receiving on schedule. Although the seller might receive the payment by means of L/C, the payment would be taken back by the buyer if the goods could not duly arrive at the port of destination. Besides, company D could take advantage of relevant L/C clauses that are in accordance with those in the contract to deny the seller the payment for goods. Company H could hardly make a claim for his rights under a normal CIF contract since this contract was the one “ in name but not in reality ”.【 Case 2】 CFR & Shipping NoticeAn import and export company in China signed an export contract with an importer in Marseilles, France on drawnwork tablecloth with an amount of USD80, 000, payment by D/P at sight.On the morning of January 8, 1997, the goods were all loaded onto the named vessel. The export salesperson in charge of this contract got so busy that he did not remember to send the buyer the shipping advice until the next morning. Unexpectedly, when the French importer went to the local insurance company to insure the goods, the latter had already learned that the ship suffered a wreck on January 9 and refused to underwrite the goods. The French importer immediately sent a telex saying, “ owing to your delayed shipping advice, we are unabrele to insu the goods because the vessel has be。