trade term.ppt

Chapter 5: Trade Terms Discussion 1. What’s the crux(problem ) of the case? 2. Who do you think should pay for the loss? 3. What are the main barriers to understand the case? Answer The contract is on the basis of CIF term. Under CIF, the seller’s responsibility ends when the goods passed the rails of the the ship at the port of shipment. He has no responsibility for the risk after that. But in the contract, the two parties agreed to stipulate a rule that the seller must ensure the delivery by the end of a certain date. This rule obviously goes against the CIF term, so the seller has to bear the losses. So the key point for the loss is the misunderstanding of the trade terms 5.1 Why do we use trade terms Because they can simplify the contract negotiation procedures, and thus save us time and cost to a great extent. Why is that? ---The functions of trade terms They indicate ① the delivery point(交货点)/ point of risk transfer(风险转移点): naming the exact time point at which the ownership of the merchandise (the risk of the goods) is transferred from the seller to the buyer; ② the responsibilities and expenses of both the seller and the buyer; ③ the formation of a unit price. What is Trade Terms The trade terms, are the short terms or abbreviations or brief English concept to indicate the formation of the unit price and determine the (1)responsibilities (2)expenses and (3)risks borne by two parties as well as the time of the passing of the property in the goods(货权转移). shipment (起运)：to put the goods at the disposal of buyer or his carrier or to load them on board carrying vehicles. loading(装运): usually, port/place of shipment is the port/place of loading delivery ( 交货）： The handling over of goods from seller to buyer or; To put the goods at the disposal of buyer or his carrier or; To load them on board carrying vehicles. FOB 的费用 FOB=EXW+货物越过船舷前的风险和费用+出口清关的风险和费用+出口政府规定的装船之前的检疫费用。 CFR It requires the seller to clear the goods for export Can be used