《Chapter 5 International Trade Terms》.pptVIP

The Nature of Performance of a CIF Contract ? It is sale of documents rather than goods. ? Three stages of delivery in a CIF contract, i.e. “provisional delivery” on shipment, “symbolical delivery” on tender of the documents, and “complete delivery” when the goods are handed over to the buyer, The contractual obligation of delivery is satisfied just by delivery of documents and not by actual physical delivery of the goods. The buyer cannot refuse the documents and ask for the actual goods, nor can the seller withhold the documents and tender the goods they represent. ? On presentation of the shipping documents, if they are complete and regular, the buyer is bound to pay the price, irrespective of the arrival of the goods. ? Whatever happens to the goods in transit, the bill of lading and the insurance policy provide an almost complete, continuous cover from the port of shipment to the port of destination. Follow-up Practice 1 Review and Discussion Questions 1) What are trade terms? Why are they used in international trade? 2) What is the meaning of Incoterms? What is the significance of using Incoterms? 3) What are the benefits of organizing the terms in Incoterms 2000 into four basic groups? 4) What are the differences between FOB and CFR? 5) Why does an export price need to contain a measuring unit, unit price, employed currency and trade term? 6) Why is it advisable to use CIF in export and use FOB in import? ? 2 Match the trade terms under INCOTERMS 2000 with their Chinese equivalents  ? a. EXW (EX Works) 1. 船边交货 b. FAS (Free Alongside Ship) 2. 运费付至 c. FCA (Free Carrier) 3. 目的港船上交货 d. FOB (Free On Board) 4. 未完税交货 e. CFR (Cost and Freight) 5. 工厂交货 f. CIF (Cost, Insurance and Freight) 6. 货交承运人 g. CPT (Carriage Paid To) 7. 运费、保险费付至 h. CIP (Carriage and Insurance Paid