[1912] A.C. 18, H.L., affirming [1911] 1 K.B. 214 (Hamilton J.) and reversing [1911] 1 K.B. 934 (C.A.).
A c.i.f. contract also provided for "Terms net cash." The sellers successfully argued that this meant net cash against documents. The buyer unsuccessfully argued that he was not obliged to pay until the goods had arrived at their destination, and a reasonable opportunity had been allowed to him for examination to see if they were in conformity with the contract. The buyer’s argument, that the "expression c.i.f. standing alone is merely a means of calculating the price to be paid for the goods by adding together the various items of which the price is composed" and that the "letters c.i.f. have nothing to say to delivery" was rejected.
Hamilton J.’ judgment, which was approved in the H.L., contains what may be regarded as the standard definition of the c.i.f. contract:
"The meaning of a contract of sale upon cost, freight, and insurance terms is so well settled that it is unnecessary to refer to authorities upon the subject. A seller under a contract of sale containing such terms has firstly to ship at the port of shipment goods of the description contained in the contract; secondly to procure a contract of affreightment, under which the goods will be delivered at the destination contemplated by the contract; thirdly to arrange for an insurance upon the terms current in the trade which will be available for the benefit of the buyer; fourthly to make out an invoice as described by Blackburn J. in Ireland v. Livingston (1872) L.R. 5 H.L. at p. 406 or in some similar form; and finally to tender these documents to the buyer so that he may know what freight he has to pay and obtain delivery of the goods, if they arrive, or recover for their loss if they are lost on the voyage."
There is further discussion in Manbre Saccharine Co. Ltd. v. Corn Products Co. Ltd. [1919] 1 K.B. 198.
Top of case, list of cases, legal top-level page, international trade page
Mail Paul Todd : toddpn2@cf.ac.uk
This page was last updated on 15 Feb 98.