PPCC Training Manual 9 (1).doc

The buyer or for clearing the goods for export unless

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the buyer or for clearing the goods for export, unless otherwise agreed, the buyer bears all the costs and risks involved in taking the goods from the sellers premises to the desired destination. This term thus represents the minimum obligation for the seller. This term should not be used when the buyer cannot carry out directly or indirectly the export formalities. In such circumstances, the FCA Term should be used. 12.1.3 The T' Terms The FCA term could be used whenever the seller should fulfill this obligation by handing over the goods to a carrier named by the buyer. It is expected that this term will also be used for maritime transport in all cases where the cargo is not handed to the ship rail. Needless to say the, traditional FOB term is in appropriate where the seller is called upon to hand over the goods to a cargo terminal before the ship arrives, since he would then have to bear the risks and costs after the time when he has no possibility to control the goods or to give instructions with respect to their custody. It is emphasized that, under the F-terms the seller should hand over the goods for as instructed by the buyer, since the buyer would make the contract of carriage and name the carrier. 12.1.4 The 'C Terms Under the C-terms the seller must contract for carriage on usual term at his own expense. Therefore a point up to which he would have to pay transportation costs must necessarily be indicated after the respective C-term. Under CIF and CIP terms the seller also has to take out insurance and bear the insurance cost. The C- terms are of the same nature as the F-terms in that the seller fulfills the contract in the country of equipment of dispatch. While the seller will have to pay normal transportation for the carriage of the goods by a usual route and in a customary manner to the agreed place of destination, the risk for loss of damage to the 82
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goods, as well as additional costs resulting from events occurring after the goods having handed over for carriage, fall upon the buyer. Hence, the C-Terms as distinguished from all other terms contain two "critical" points one for the division of costs and another for the division of risks. 12.1.5 The 'D' Terms There is a distinction between the 'D' term and 'C' terms, since the seller according to the 'D' terms is responsible for the arrival of the goods at the agreed place or point of destination. The seller must bear all a risks or costs in bringing the goods there to. Hence, the 'D' terms signify arrival contracts, while the 'C' terms points to shipment contracts. The 'D' terms fall into two different categories. Under DAF,DES and DDU the seller does not have to deliver the goods cleared for import, while under DEQ and DDP he or she would have to do so. Please see diagram in Appendices (2 ).
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