COST AND FREIGHT（…named port of destination）---Means that the seller must bear all costs and risks of loss of or damage to the goods until they have crossed the ship's rail and are responsible for chartering or booking the goods at the port of shipment on board the ship bound for the designated port of destination during the period of shipment specified in the contract, Payment of normal freight charges for arrival at the port of destination. According to the 1990 General Principles, the main obligations of the buyer and seller of CFR contracts are as follows:
(3) the main obligations of the seller
1. Be responsible for the delivery of conforming goods at the port of shipment to the ship bound for the designated port of destination within the date or period specified in the contract and give adequate notice to the buyer;
2. Responsible for processing the export of goods, obtaining an export licence or other authorization;
3. Responsible for chartering or booking and payment of freight charges to the port of destination;
4. bear all costs and risks for the goods until they have crossed the ship's rail at the port of shipment;
5. Responsible for providing commercial invoices and the usual transport documents for the goods to the port of destination. If the parties agree to use electronic communications, all documents may be replaced by electronic data interchange information with equal effect.
(4) the main obligations of the buyer
1. Responsible for the payment of the price as stipulated in the contract;
2. Responsible for the import of goods, obtaining import licences or other authorizations;
3. bear all costs and risks of the goods after they have crossed the ship's rail at the port of shipment;
4. Responsible for insurance procedures and payment of insurance premiums;
5. Receive the goods delivered by the seller in accordance with the terms of the contract and accept documents conforming to the contract.
To conclude a contract in CFR terms, special attention should be paid to the following points:
1. In CFR terms, you must pay attention to the issue of shipping notifications. Because under the CFR term, the seller is responsible for arranging the transpoRTA
tion and the buyer handles the insurance on its own, it is a crucial issue in the CFR contract that the buyer promptly completes the insurance with the insurance company before the goods are loaded on the ship, that is, before the risk is transferred to the buyer. IVCOTERMS therefore stressed that the seller must notify the buyer without delay that the goods had been loaded on board. Otherwise, the seller is liable for breach of contract.
2. In CFR terms, the burden of unloading costs is usually deformed by CFR terms, such as:
3, CFR liner terms(CFR liner terms), which means that the unloading costs are treated according to the liner conditions and are borne by the party paying the freight(ie, the seller); 2 CFR ex ship's hold, which means that the seller bears the cost of lifting the goods from the bilge to the side of the ship until the hook is removed;
4, CFR ex tackle means that the buyer bears the cost of lifting the goods from the bilge to the dock;
5, CFR unloading to shore(CFR landing) means that the seller is responsible for the cost of unloading the goods to the shore of the destination port.
Related Product tags: Trade Terms,CFR