941

areal Trade Teems er &port Sula

Tender of goods afloat Respomlbalant (One Ponies 47

2-4)33 Normally the seller under a CIF contract has the option either to arrange
Loss of goods

the actual shipment of the goods in a ship chosen by him or to purchase

goods which are already afloat. In either case the seller has to tender to the
buyer the appropriate bills of lading. The buyer cannot compel the
seller to adopt one or the other of these alternatives: the choice is with
the seller. If. however, one alternative becomes impossible, in principle
the seller is obliged to use the other to perform. If, for example. the
goods cannot be shipped at the contemplated port of shipment because
the government places an embargo on t hem, the seller is bound to
procure the goods afloat and to tender the buyer bills of lading relating to
them.
It follows from the particular character of the CIF contract that, if the 2-034
goods are shipped and lost during the ocean transit, the seller is still entitled
to tender proper shipping documents to the buyer and to them the
purchase price. Donaldson .J. said' q :
the fact that the ship and goods have been lost after shipment or that a
liability to contribute in general average or salvage has arisen in no reason for
refusing to take up and pay for the documents.

In practice. however, the situation will often be different. The CIF

contract may provide expressly or by necessary implication that the goods It has been held'" 'that these rules apply even when the seller at the time
shall be "shipped" from a particular port. If shipment from that port of tender of the shipping documents knows that the goods are last It is
becomes im possible owing to a frustrating event, the Seller is not immaterial whether before the tender of the documents the property in the
obliged to buy goods afloat and the contract is frustrated.1/5 Commercial goods is vested in the seller or the buyer or a third person ot whether the
considerations may make this result inevitable as in many circumstances goods arc unascertained or have been appropriated:
buying afloat w o u l d b e impracticable a n d not treat y '
viable. Lord Denning The seller must be in a position to pass the property in the goods by
M.R. observed in one casers: the bill of lading if the goods are in existence bu t he need not have
appropriated the particular goods in the particular bill of lading to
the shipper Take the usual case were
of a string of contracts between
doand the receiver. If there to an obligation to to
buy afloat, the particular buyer until the moment of the tender, nor need he
who is to to
obligation thebuyer?
the buying? If Is each
that were seller
so there do
wouldso in
be order
large fulfil
numbers his
of have obtained any right to deal with the bill of lading until the
buyers chasing very
levels. Alternatively, few goods
is theIt first and
seller the
in price
thethat would
string reach
to doisso? unheard
Or the last of moment of the tender.
seller?
export No
or one
force can tell.
majeure, seems
the seller to
areme
not boundif there
to buy prohibition
afloat in orderof
to implement their contract.
The buyer's remedy, in case of loss of the gook in transit, is normally a
claim against the carrier or the insurer. The legal causes of action available
for the buyers claim against the carrier have been considered earlier.'
On the other hand, the OF contract may express& provide that the but normally the buyer will claim against the insurer, in which case he
goods should be shipped "afloat", with or without reference to a particular only has to prove that the loss is caused by a risk covered by the policy. The
ship. insurer, when paying, will demand the assignment to himself of the claim
'Iv 4444 ita.014 olio atticeatkal.14d alio Snot 744Aalopollaota /ay 4/6144-4- • I/4119 against the carrier or to be subrogated to it and he will, if necessary. pursue
2 Lloyd's Rim IRZ
this claim. which will only be successful if it is proved that the CArrier
was at fault.
It may happen that the goods are lest in transit owing to factors which
do not entitle the buyer to make a claim against the carrier or insurer. In
these circumstances it ought to be remembered that under a CIF contract
the buyer. and not the seller, bears the risk hum the moment when the
goods are delivered to the carrier. Therefore the buyer has to pay the
purchase price to the seller upon tender of the appropriate shipping docu-
ments or. if he has already paid cannot recover the price on the ground
that there was a total failure of consideration.