Part A

1. EXW -Ex Works

FCA- Free Carrier

CPT - Carriage Paid To

DDP- Delivered Duty Paid

CIP – Carriage Insurance and Freight

2. Incoterms are internationally agreed set of rules that are meant to eradicate the uncertainties
that exist as a result of the differences in the interpretations of these terms between different
states in their application under foreign trading arrangements. Their scope extends to the sale
of goods contracts as regards the obligations and duties that are imposed upon the buyer and
seller. These terms are only applicable to the delivery of tangible goods only.

3. The ruling authority on the definition of FOB contracts is found in the Pyrenes case. It
distinguishes between three types of fob contracts first of which is the Strict or Classical fob
contract. In Wimble & Sons Co v. Rosenberg. The classic fob imposes strict burdens on the buyer
and is quite advantageous to the seller. The buyer has to nominate the ship for which the goods
are to loaded. The seller then has the obligation of loading the goods onto the ship and
complete a clean bill of lading which she then has to forward to the buyer. Insurance cover and
freight charges are the exclusive responsibility of the buyer.

The second type of fob is the fob with extended provisions. It is similar to the classic fob only
that it contains extra provisions inn that the responsibility for the nomination of the ship is now
transferred to the seller instead of the buyer. This is quite advantageous to the seller since this
allows them to us their local business expertise in this process. Besides the nomination of the ship,
the seller also partakes the contract of carriage with the ship and provides for the insurance cover
for the freight.

The last type of fob contract is known as the simple fob contract. In the case of India President v.
Metcalfe Shipping Line this type of contract5 is well explained. Under the provisi0ons of this fob
contract, the buyer has the direct responsibility of making the contract of carriage and also the
nomination of the ship. In this contract, the seller is not party to the contract of sale and when
providing the goods for shipment, then will be given what's known as a mate's receipt and sends it
to the buyer.
 4. The abbreviation term CIF is used to represent the terms, cost, insurance and freight. It only
applies to water based trnsport. The responsibilities for this term were explained by the ICC. As
usual, the seller has the responsibility for delivering the goods for shipping and the completion
of a clean bill of lading. The seller makes completes all the license requirements and customs
charges necessary. the buyer is responsible for the payment of the freight costs and any other
incidental costs that may be incurred along the journey. The seller is supposed to insure the
good along the way but I not obligated to provide any additional cover that goes beyond the
minimum expectation of the trade. This insurance is supposed to cover for the possibility of
damage and sometimes the loss that may be suffered during the transportation period.
Additional cover can be permitted if it is provided for within the terms of the contract between
the buyer and the seller, otherwise it would be the sole responsibility of the buyer to provide for
these extra measures.

5. The seller has the mandate to provide the goods in line with the provision of the contract and as
such this covers the necessary documents incumbent upon the delivery process like customs
and licenses. Seller must deliver these goods to the port of shipping and load them on board the
ship for transportation. Seller must make all the necessary documentation from customs
licenses and also the payment of charges need in order to load the goods. As for the buyer, she
is supposed to receive the goods and pay all the freight charges due. This process also involves
the requirement to inspect the conformity of the goods to the contract and as such to report
back to the seller any non-conformity 5that might be discovered. Duty is also on the buyer to
ensure that the payment is effected before the expiration of the agreed time period.

Part B

Right to reject the shipping documents is available for the buyer under different reasons that are
permissible under the rules of trade agreed on internationally. To begin with, the most obvious reason
for re3jection is if there is no conformity between the shipping documents and the provisions contained
within the contract of sale. In Green Jourdain it was held that the buyer has the right to reject the
documents even when delivered because the obligations of the seller are not delivery but rather
delivery in conformity with the contractual terms agreed on. This is the general standard of expectato9n
for all the three types of fob contracts but they can however be side lined on the premise were the
seller has provided insurance cover for the goods under ordinary destination bound carriage. This means
that by rejecting the documents, the buyer is essentially rejecting the goods represented by the
documents. Non-conformity is the fault of the seller sine documentation takes place before the
shipment and thus any discrepancies are a result of the seller's fault. Insurance cover for the goods is, by
law, required to extend the whole duration of the shipment of the goods and failure to do so gives the
buyer grounds for rejection of the documents. It is interesting to note that the duty of the buyer to
effectively inspect the documents and goods is taken to mean that were the buyer accepts the
documents and makes payments, it is assumed that he has inspected them and as such there is no right
for rejection were the objections are not communicated before the completion of this process.
According to Davidson. J, the provisions for which the buyer has the right to reject the documents are
limited to the obligations of the seller not met before the loading of the goods and documents aboard
the ship and any other calamity that happens in transit is not reasonable ground giving the buyer the
right to reject the goods

Part C

Fob contracts are quite flexible instruments and as such they exist in quite a wide variety for which
there cannot be established any one satisfactory definition to completely explain them. this is a result
of the capacity of the contracting parties to modify the provisions but, it is also worth noting that even
though there is a wide discretion, there still exists some minimum obligations for which there can be
no derogation. This is because of the need to establish internationally applicable measures without
inconsistences between states. In the case of Rosenberg, the court highlighted these basic
requirements and they are as follows; the seller is incline to load the goods on sip and to make sure
that these goods fit the description agreed upon in the contract. There is no requirement upon the
seller top offer any shipping reservations and this implies the obligation on the buyer to nominate the
shipping vessel and communicate the information to the seller for loading. This is all supposed to be
executed in a reasonable time that allows the seller to be able to load the goods in time with the
agreed period. Shipment costs and freight charges are all under the responsibilities of the buyer to be
paid upo0n arrival at the agreed point of destination. The nature of the relationship between the
seller and the buyer has bearance on the modifications that may be agreed upon under fob contracts
in the case of Scindia Steam Navigation Co Ltd, it was held that there are three basic obligations
expected to be carried out and the first of them is the requirement upon the buyer to choose and
designate the ship an communicate to the seller. The second is then the obligation of the seller to
make sure that the goods are delivered for shipment and properly loaded on board. Seller is supposed
to obtain the bill of lading and to also complete all the customs and necessary licensing required. The
signing of the bill of lading is the discretion of the parties ad can be cosignatories or individually by the
buyer.

Carrriage arrangements are the office of the seller and insurance may also be part of these duties as
per the agreement of the parties. The seller completes the bi9ll ofr lading in his own name and loads
the goods on the nominated ship. this type of arrangement makes the seller part of the contract of
carriage. This type of contract reduces the costs paid by the buyer as the carriage costs are alsready
coverd for by the seller and only has to cover additional costs and freigt charges.

Under this other type of contract, the seller has the burden of carriage arrangements and under some
circumstances, even the insurance. The seller has to then submit the goods for shipping and a complete
the bill of lading under his own identity after which he also proceeds it to the buyer. The seller is part of
the contract and this is quite similar to the provisions of CIF contracts but, however, the under these
provisions, the contractual price is tendered excluding the costs of carriage and this exists as a way of
safeguarding the seller against any possible increases of the price for which the payment will be
completed by the buyer including any additional fees that may be required.

References
The Vienna Convention on Contracts For the International Sale of Goods

Transnational Commercial Law (2007)

International Trade Law (2005)

Pyrene and Co Ltd v Scindia Navigation Co Ltd

Wimble, Sons and Co v Rosenberg

Dance M. 2002. Loss Damage and Expense to Cargo – Avoiding and Reducing The Risks

Azur Gaz [2006] 1 LLR 163