International Maritime Sales: FOB and CIF Contracts (Part One)

Abstract

This article develops in detail the central aspects of international maritime sales. Through an exhaustive analysis, the author addresses the differences between FOB and CIF commercial terms, highlighting the need to develop clear stipulations in order to avoid interpretative disputes and litigation. This refers to central aspects such as delivery of goods, place, date, costs, risks, time of payment and transfer of risks and liability. Along these lines, the author points out that, in a sale and purchase on FOB terms, the seller fulfills its obligations by making the free delivery of the goods, without getting involved in the transport and maritime insurance, the costs of which are borne by the buyer. On the other hand, in a sale and purchase on CIF terms, the seller assumes additional responsibilities, including transportation and insurance to the agreed point of destination. In this regard, in addition to highlighting the importance of the precision of central elements, the legal and financial implications of the contractual clauses in the context of containerized transport are examined. Based on the above, the author emphasizes the need for absolute precision in the drafting of maritime contracts in order to avoid conflicts and ensure a smooth execution of commercial operations.