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      Question

      A buyer and seller entered into a CIF (Cost, Insurance,

      Freight) contract. The seller shipped the goods and handed over the bill of lading and insurance documents to the buyer. Before the goods reached the destination, they were destroyed at sea. Who bears the risk?
      A Seller Correct Answer Incorrect Answer
      B Buyer Correct Answer Incorrect Answer
      C Insurance Company Correct Answer Incorrect Answer
      D Shipping Company Correct Answer Incorrect Answer
      E Both equally Correct Answer Incorrect Answer

      Solution

      In a CIF contract, risk passes to the buyer once goods are shipped and documents are delivered.┬а BuyerтАЩs Responsibilities

      1. Pay the contract price.

      2. Bear all risks after the goods are loaded on board the vessel at the port of shipment.

      3. Accept the shipping documents (bill of lading, insurance policy, invoice).

      4. Claim from insurer in case of loss or damage after shipment.

      5. Arrange import licence and complete import customs formalities.

      6. Pay import duty, taxes, and port charges at destination.

      7. Arrange unloading and onward transportation from port of destination.

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