Seller Obligated To Disclose Goods Price &Freight Separately

The forum is dedicated to all who deals with LCs. Please share your experiences, problems and opinions with us. You are requested to be confined to LC related issues only. Let us together discover the beauty of Letter of Credit. Thank and regards – admin; besttradesolution.com
Post Reply
User avatar
sultanhbl
Posts: 47
Joined: Sun Sep 16, 2012 1:31 pm
First Name: S M SULTAN
Last Name: KABIR
Organization: HBL
Filter: Two Plus Two =: 4
Location: BANGLADESH

Seller Obligated To Disclose Goods Price &Freight Separately

Post by sultanhbl » Sat Feb 08, 2014 8:51 am

Refer to INCOTERS 2010;

CFR (Cost and Freight)
The seller bears the freight and costs to bring the goods in the port of destination agreed, but the risk of loss and damage, as well as any additional costs due to events occurring after the goods have been delivered on board are transferred from the seller to the buyer. Now I would take the opportunity to discuss the Sellers and Buyer’s obligation regarding the cost of goods and freight:

The Sellers Obligation:
A3 (a) Contracts of carriage (The seller must contract or procure a contract for the carriage of the goods from the agreed point of delivery, if any, at the place of delivery to the named port of destination or, if agreed, any point at that port. The contract of carriage must be made on usual terms at the seller’s expense and provide for carriage by the usual route in a vessel of the type normally used for the transport of the type of goods sold).

The Buyer’s Obligation
A6 Allocation of costs
The seller must pay
a) all costs relating to the goods until they have been delivered in accordance with A4, other than those payable by the buyer as envisaged in B6;
b) the freight and all other costs resulting from A3 a), including the costs of loading the goods on board and any charges for unloading at the agreed port of discharge that were for the seller’s account under the contract of carriage; and
c) where applicable, the costs of customs formalities necessary for export as well as all duties, taxes and other charges payable upon export, and the costs for their transport through any country that were for the seller’s account under the contract of carriage.

Now my questions are:

• Is the seller obligated to disclose the Price of the goods and the freight separately?
• What will be happened, if the seller fails to mention the freight charge separately?
• If the freight and cost of goods doesn't quote separately in Commercial Invoice, then will the invoice be discrepant?

User avatar
abelhoci
Posts: 24
Joined: Wed Jan 22, 2014 11:32 pm
First Name: Majeed
Last Name: Bel
Organization: velan
Filter: Two Plus Two =: 4
Location: canada

Seller Obligated To Disclose Goods Price &Freight Separately

Post by abelhoci » Wed Feb 19, 2014 7:25 am

Hi Pal
If the credit requires the breakdown of charges , the invoice must indicate the freight and or the insurance separately from the cost of the goods.
If the seller does not comply this will automatically be a discrepant and documents will not be a complying presentation.
It all depends how the LC is drafted

Post Reply