Asked by Juliette Dillon on Apr 27, 2024
Verified
Which statement is correct regarding CIF agreements?
A) Risk of loss occurs when goods are identified to the contract.
B) Risk of loss occurs when the goods are delivered to the buyer.
C) Risk of loss remains with the seller for 5 days after the sale.
D) Risk of loss remains with the seller for 5 days before the sale.
E) The seller puts the goods into the possession of a carrier before the risk passes to the buyer.
CIF Agreements
Contracts that stipulate the seller is responsible for the cost, insurance, and freight of goods being transported to a designated location.
Risk Of Loss
The responsibility for the cost of loss or damage to goods during shipment, distribution, or within a contractual period.
Carrier
A carrier refers to an individual or entity engaged in the business of transporting goods or people for any form of compensation.
- Gain insight into the legal outcomes of dispatching goods using general carriers, and the importance of FOB (Free On Board) and CIF (Cost, Insurance, and Freight) conditions in identifying responsibilities related to shipping charges and risk of loss.
Verified Answer
LP
Luann PetersonMay 01, 2024
Final Answer :
E
Explanation :
Under CIF (Cost, Insurance, and Freight) agreements, the seller is responsible for covering the cost of shipping and insurance to ensure the goods reach the buyer's destination. The risk of loss or damage to the goods passes from the seller to the buyer when the goods are handed over to the carrier, not based on a specific number of days before or after the sale, nor immediately upon identification of the goods to the contract or their delivery to the buyer's premises.
Learning Objectives
- Gain insight into the legal outcomes of dispatching goods using general carriers, and the importance of FOB (Free On Board) and CIF (Cost, Insurance, and Freight) conditions in identifying responsibilities related to shipping charges and risk of loss.