Point of ‘delivery’ in CIF contracts

I would hope that all those reading this article will be familiar with the CFR and CIF terms and the fact that ‘delivery’ takes place when the seller delivers the goods ‘on board the vessel at the port of shipment on the date or within the agreed period’ (INCOTERMS clause A4). I would also hope that readers are equally aware of the fact that the seller bears ‘all risks of loss of or damage to the goods until such time as they have passed the ship’s rail at the port of shipment’ (INCOTERMS clause A5) and that thereafter the goods are at the risk of the buyer. Some recent cases (Trasimex Holding SA v Addax BV (The Red Sea) [1999] 1 LLR 28 and Fal Oil Trading Co Ltd v Petronas Trading Co [2002] EWHC 1825 (QB) reported by Lawtel) have, however, cast some doubt on whether the full implications of these fundamentals of international trade are appreciated, and some recent contracts seen by the writer indicate that many of the users of INCOTERMS simply do not understand what ‘delivery’ means in a CFR or CIF contract.