Cif stands for cost, insurance and freight. it is the seller's obligation to ship the insured contractual goods to the agreed destination under a CIF terms contract and the buyer may also purchase goods afloat, which are already bound for that destination.
The advantages are, seller does not bear any risk during transits of goods because the buyer still has to fulfil his contractual duties regardless the goods arrive or lost. However, buyer can try to get redress against the carrier and insurer by producing the tendered documents (Arnold Karberg)
Buyer has to arrange for import licenses and pay any import duties and charges at the port of destination. Seller will get his payment by tendering valid documents regardless the goods arrive or lost.
If the buyer purchase goods afloat, the buyer still bearing the risk because the presumptions of s 20 and s 32(1) of the SoGA 1979 do not apply.
The disavantages are the seller has to bear the risk of fluctuation in the cost of carriage and insurance.
If the seller fails to ship the goods, tender the documents of the goods does not arrive at the destination on time would result in breach of condition in each case (Bunge Corporation)
Buyer has the right to reject goods on a valid ground and claim for repudiation and damages for non-delivery (Kwei Tek Chao & Others)
In conclusion, CIF contract provide a fair protection to both seller and buyer.
(251 words)
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