Understanding Cost Insurance Freight or CIF: A Comprehensive Guide
Definition & meaning
Cost Insurance Freight (CIF) is a term used in international sales contracts, particularly for goods transported by sea or inland waterways. Under CIF, the seller is responsible for the cost of the goods, insurance, and freight charges to deliver the goods to a specified destination. The seller's obligations are fulfilled once the goods are loaded onto the ship at the port of shipment. After this point, the risk of loss or damage transfers to the buyer.
Legal use & context
CIF is commonly used in international trade agreements and contracts. This term is relevant in various legal contexts, including commercial law and contract law. Users can manage CIF-related contracts using legal templates from US Legal Forms, which provide guidance on drafting and understanding such agreements.
Real-world examples
Here are a couple of examples of abatement:
Example 1: A company in the United States sells machinery to a buyer in Europe. The sales contract specifies CIF terms, meaning the seller will pay for the machinery, insurance, and shipping to the European port. Once the machinery is loaded onto the ship, the buyer assumes the risk of loss.
Example 2: A manufacturer in Asia ships textiles to a retailer in North America under CIF terms. The manufacturer is responsible for all costs until the textiles are loaded onto the vessel at the port of origin. (Hypothetical example.)