Cost Insurance Freight Flashcards
CIF Principle: Under CIF contracts, the seller’s obligations are clear: deliver documents, not goods. However, acceptance of deviation from terms without protest can amount to waiver or estoppel.
Alan & Co v El Nasr [1972] 2 WLR 800
• Facts: Goods were sold on CIF terms. The buyer paid for the goods in sterling, not in the agreed currency (dollars), and the seller accepted without immediate objection.
• Issue: Could the seller later claim for losses due to currency fluctuations?
• Holding: The court held that the seller could not recover the loss since they had accepted payment without protest, leading to a waiver.
CIF Principle: Shipment within the agreed time is a condition. The buyer has the right to reject if this condition is not met.
Diamond Alkali v Bourgeois [1921] 3 KB 443
• Facts: Goods sold CIF but were shipped late. The buyer rejected the documents.
• Issue: Was late shipment a ground for rejecting documents in CIF sales?
• Holding: Yes, timely shipment is essential in CIF contracts. The buyer was entitled to reject the documents.
CIF Principle: CIF contracts transfer risk and ownership upon delivery of documents, but the buyer still retains a right of rejection for goods that fail to conform.
Lindon Tricotage Fabrik v White and Meacham [1975] 1 Lloyd’s Rep 384
• Facts: Goods sold CIF. The buyer claimed that the goods didn’t match the contract description upon arrival.
• Issue: In CIF contracts, can the buyer reject goods that do not conform even after accepting conforming documents?
• Holding: The buyer retains the right to reject non-conforming goods upon inspection, despite accepting documents.
CIF Principle: CIF contracts are documentary sales. Once proper documents are delivered, the buyer must pay, even if the goods perish during transit.
Arnhold Karberg v Blythe, Green, Jourdain & Co (1916) 1 KB 495
• Facts: Goods sold CIF. Seller tendered conforming documents, but the ship carrying the goods was lost at sea.
• Issue: Was the buyer still obligated to pay for the goods?
• Holding: Yes. In CIF contracts, risk passes upon delivery of documents, not arrival of goods.
CIF Principle: The seller must provide a valid contract of insurance. Failure to do so entitles the buyer to reject the documents.
Hindley & Co. v East India Produce (1973) 2 Lloyd’s Rep 515
• Facts: Goods were sold CIF. The seller failed to obtain valid insurance for the shipment.
• Issue: Can the buyer reject the documents if insurance is invalid?
• Holding: Yes, valid insurance is a key seller obligation in CIF contracts.
CIF Principle: Risk passes upon tender of documents, not physical delivery. Buyer cannot reject goods for damage if documents were conforming.
Smyth & Co. Ltd v Bailey Son & Co. (1940) 3 All ER
• Facts: CIF sale of canned fruit. The goods were damaged upon arrival, but the seller had delivered conforming documents.
• Issue: Who bears the risk of the damaged goods?
• Holding: The buyer. In CIF contracts, risk passes to the buyer once documents are properly tendered.
CIF Principle: The seller must strictly comply with shipping terms in CIF contracts. Failure to do so gives the buyer a right to reject documents.
The Julia – Comptoir d’Achat et de Vente du Boerenbond Belge SA v Louis de Ridder Ltd [1949] AC 293
• Facts: CIF contract. The seller shipped the goods on a vessel that was not named in the contract and delivered documents accordingly.
• Issue: Was shipment on the wrong vessel a breach that entitled rejection of documents?
• Holding: Yes. The buyer was entitled to reject the documents due to breach of the shipment terms.
CIF Principle: The seller must provide insurance that covers the full value of goods. Insufficient insurance violates CIF obligations.
Manbre Saccharine v Corn Products Co. [1919] 1 KB 189
• Facts: Goods sold CIF. Insurance policy tendered did not cover the full value of goods.
• Issue: Is the buyer entitled to reject the documents if insurance coverage is insufficient?
• Holding: Yes. The buyer is entitled to reject documents if the insurance is defective.
CIF Principle: Delivery of documents constitutes delivery under CIF. Buyer is obligated to pay regardless of goods’ actual arrival.
Sanders v Maclean (1883) 11 QBD 327
• Facts: CIF sale involving bills of lading and warehouse receipts. The buyer refused payment after delivery of documents.
• Issue: Does delivery of documents give rise to a duty to pay?
• Holding: Yes. CIF sales are documentary; payment is due upon presentation of conforming documents.
CIF Principle: While risk passes with documents, where goods perish and buyer has no title, seller may sue as trustee for buyer’s benefit.
The Albazero [1976] 2 Lloyd’s Rep 467
• Facts: Goods sold CIF. They were lost at sea, and the buyer had no insurable interest at time of loss.
• Issue: Could the seller claim for the buyer’s benefit?
• Holding: In certain cases, a seller may recover on behalf of the buyer where the buyer cannot sue due to lack of title/interest.
CIF Principle: Timely delivery of documents—not goods—is what matters in CIF. Delivery delays do not excuse buyer from paying.
Hickox v Adams (1876) 34 LT 404
• Facts: Sale of goods on CIF terms. The buyer challenged the seller’s right to payment because the goods had been delayed in delivery.
• Issue: Could the buyer refuse payment due to delivery delays if documents were tendered correctly?
• Holding: No. The buyer must pay upon receipt of conforming documents.
CIF Principle: In CIF sales, banks deal in documents, not goods. They must honour credit upon receipt of conforming documents, unless clear evidence of forgery exists.
Borthwick v Bank of New Zealand (1900) 17 TLR 2
• Facts: Bank refused to pay under a CIF documentary credit, questioning the authenticity of documents.
• Issue: Can the buyer or bank refuse to honour a CIF documentary credit based on suspicion of forgery?
• Holding: The bank was not liable unless forgery could be proved.
CIF Principle: Sellers must ship on the agreed vessel or type of vessel. Deviation entitles the buyer to reject documents.
Landauer & Co. v Craven Shipping Bros (1912) 2 KB 94
• Facts: Under a CIF contract, goods were loaded onto a vessel that didn’t comply with the shipment agreement.
• Issue: Was there a breach of contract due to use of an unauthorised vessel?
• Holding: Yes. Strict compliance with shipment terms is essential in CIF contracts.
CIF Principle: CIF sales require precise compliance with contractual terms; any deviation may invalidate the seller’s claim for payment.
Ireland v Livingstone (1872) LR 5 HL 395
• Facts: A seller shipped goods that did not conform to the buyer’s specific order and attempted to enforce payment.
• Issue: Could the seller recover payment despite deviation from order?
• Holding: No. Goods and documents must strictly conform to the contract.
CIF Principle: CIF sellers must not only ship goods but also promptly deliver shipping documents. Delay can result in liability.
Malmberg v H.J. Evans (1924) 1 TLR 38
• Facts: Under CIF terms, the seller delayed in forwarding the bill of lading to the buyer, resulting in a loss.
• Issue: Was the seller liable for failing to transmit documents in a timely manner?
• Holding: Yes. Timely delivery of documents is a fundamental duty in CIF contracts.
CIF Principle: In CIF contracts, the seller fulfills the contract by delivering proper documents. The buyer assumes risk after that point.
Warren Imports v Internationale Tegara [1977] 21 Lloyd’s Rep 58
• Facts: The goods arrived damaged, and the buyer refused to pay, claiming breach of CIF obligations.
• Issue: Could the buyer refuse payment based on condition of goods, despite receipt of conforming documents?
• Holding: No. Payment obligation arises from conforming documents, not the goods’ condition.
CIF Principle: Insurance must meet contract specifications. Defects in insurance documentation justify buyer’s rejection.
James Finlay v Kwi Hoo Tong A/M [1929] 1 KB 400
• Facts: Dispute arose over whether the insurance policy provided was valid under a CIF contract.
• Issue: Was a defective insurance policy sufficient grounds for rejecting documents?
• Holding: Yes. Valid insurance is an essential component of a CIF sale.
CIF Principle: CIF sellers are not responsible for delivery of goods—only for proper shipment and document delivery. Risk passes upon document tender.
Anglo-Russian Traders Ltd v J. H. Butt & Co. (1919) 1 Lloyd’s Rep 119
(Note: You listed this as 1970, likely a typo.)
• Facts: CIF contract where goods didn’t arrive due to war-related delays.
• Issue: Was the seller still entitled to payment since conforming documents were delivered?
• Holding: Yes. War risks didn’t excuse buyer from paying if documents were in order.
Alan & Co v El Nasr [1972] 2 WLR 800
Facts: Goods were sold on CIF terms. The buyer paid for the goods in sterling, not in the agreed currency (dollars), and the seller accepted without immediate objection.
Issue: Could the seller later claim for losses due to currency fluctuations?
Holding: The court held that the seller could not recover the loss since they had accepted payment without protest, leading to a waiver.
CIF Principle: Under CIF contracts, the seller’s obligations are clear: deliver documents, not goods. However, acceptance of deviation from terms without protest can amount to waiver or estoppel.
Diamond Alkali v Bourgeois [1921] 3 KB 443
Facts: Goods sold CIF but were shipped late. The buyer rejected the documents.
Issue: Was late shipment a ground for rejecting documents in CIF sales?
Holding: Yes, timely shipment is essential in CIF contracts. The buyer was entitled to reject the documents.
CIF Principle: Shipment within the agreed time is a condition. The buyer has the right to reject if this condition is not met.
Lindon Tricotage Fabrik v White and Meacham [1975] 1 Lloyd’s Rep 384
Facts: Goods sold CIF. The buyer claimed that the goods didn’t match the contract description upon arrival.
Issue: In CIF contracts, can the buyer reject goods that do not conform even after accepting conforming documents?
Holding: The buyer retains the right to reject non-conforming goods upon inspection, despite accepting documents.
CIF Principle: CIF contracts transfer risk and ownership upon delivery of documents, but the buyer still retains a right of rejection for goods that fail to conform.
Arnhold Karberg v Blythe, Green, Jourdain & Co (1916) 1 KB 495
Facts: Goods sold CIF. Seller tendered conforming documents, but the ship carrying the goods was lost at sea.
Issue: Was the buyer still obligated to pay for the goods?
Holding: Yes. In CIF contracts, risk passes upon delivery of documents, not arrival of goods.
CIF Principle: CIF contracts are documentary sales. Once proper documents are delivered, the buyer must pay, even if the goods perish during transit.
Hindley & Co. v East India Produce (1973) 2 Lloyd’s Rep 515
Facts: Goods were sold CIF. The seller failed to obtain valid insurance for the shipment.
Issue: Can the buyer reject the documents if insurance is invalid?
Holding: Yes, valid insurance is a key seller obligation in CIF contracts.
CIF Principle: The seller must provide a valid contract of insurance. Failure to do so entitles the buyer to reject the documents.
Smyth & Co. Ltd v Bailey Son & Co. (1940) 3 All ER
Facts: CIF sale of canned fruit. The goods were damaged upon arrival, but the seller had delivered conforming documents.
Issue: Who bears the risk of the damaged goods?
Holding: The buyer. In CIF contracts, risk passes to the buyer once documents are properly tendered.
CIF Principle: Risk passes upon tender of documents, not physical delivery. Buyer cannot reject goods for damage if documents were conforming.
