2.2 The Documentary Sale and Terms of Trade Flashcards
Refers to the risks facing the buyer and
seller when they move money and goods in
an international sales.
Transaction Risk
Types of Transaction Risk:
Delivery Risk
Payment Risk
Quality Risk
Fail of shipping goods as called for in the
contract.
Delivery Risk
Failure of payment for what the buyer
promised,
Payment Risk (credit risk)
Unmet product expectations
Quality Risk
A type of contract for the sale of goods in
which possession and ownership of the
goods are transferred from seller to buyer
through negotiation and delivery of a
negotiable document of title issued by an
ocean carrier.
Documentary Sale
-A document that evidences the ownership
of goods it represents.
-Entitles the person who possesses the
document to possess the goods.
-It is created out of special bailment
relationship between the owner of
personal property, the bailor, and to whom
it is entrusted the bailee.
The Document of Title
-States that the goods will be delivered to
the order of a named person or assigns or
to the bearer.
- Negotiable documents can be transferred
by negotiation from one party to another in
return for value of payment.
Negotiable of Document of
Title
is the transfer fo document of
title by its owner to another in a manner
that passes title to the document, title to
the goods and the right to claim the goods
from the issuer of the document.
Negotiation
A document title that an ocean carrier
issues to a shipper upon receiving goods
for transport.
The Bill of Lading
happens when a
negotiable document of title is sold in the
ordinary course of trade by the seller.
Constructive delivery
-It is a receipt for the goods from the
carrier, indicating any damage to the
goods that was visible or apparent at the
time of loading.
- Contract of carriage between shipper and
carrier.
- Document of title to the goods described
in it.
Roles of Bill of Lading
Pertains to the superiority of rights from the
entrusted parties of the good faith purchaser.
Paramount title
This presents the assumption that the
carrier may deliver the goods only to the
holder of an original bill of lading.
Carrier’s Liability for Misdelivery
It permits merchants to trade in cargo while it is
still in float.
Importance of Negotiability to Trade
