Hypothetical Question, CIF Vs CIP?

[ErnstRabel]

Hi everyone,

I have a hypothetical question about discrepancy of delivery terms.

Party A (a seller in Hong Kong) and party B (a buyer in Australia) enter into a contract for a CIF shipment to a port in Sydney.

Party A receives a letter of credit that has CIP Incoterms instead of CIF and now the place of destination is the address of the Australian company which is inland a few kilometres from the agreed port of discharge.

Party A obviously does not want to cover the cost & insurance of the additional inland transportation.

Can party A ship to the port in Sydney only and still receive payment from the bank under this letter of credit?

Thank you for your help, any thoughts or comments is greatly appreciated!

[picant]

Good day,

banks will follow the l/c terms, if you received such l/c , and you disagree you have to ask buyer to modify the l/c terms.
Otherwise do not ship the goods, and if it is possible, sue the buyer for contract breach.

Good luck

Ciao

[billgoughSMICE]

This illustrates why everything must be correct from the start. Incoterms CIF and CIP are not interchangeable, CIF is for non break cargo and CIP is for containerized goods. If the supplier knows they are going to ship via container and\or the buyer knows they are going to receive containerized goods both should insure all documents and negotiations leading to the final contract are using proper terms. To do anything else is foolhardy and opens the transaction to the possibility of hostile and expensive litigation once either partner to the trade attempts to use their “hidden” knowledge to their advantage.

The only safe way to trade is strict adherence to the standards available in Incoterms 2010 and other internationally recognized formats such as UCP600 and URC522. Attempting to hide a discrepancy from an established standard then use such discrepancy to one’s advantage later is a fool’s errand at best.

With regards to the DLC, there is not enough information available to formulate a helpful response. Only with access to the full text of the terms of the contract and the DLC can one give more than the advice the previous poster offered.

[ErnstRabel]

Thank you for your comments!