IIP301

In CIP, when does the risk transfer from the Seller to the Buyer?

• When the goods arrive at the place of destination.

• When the goods are handed over to the first carrier.

• When the Buyer receives the goods at their warehouse.

• When the Seller concludes the insurance contract.

In CIP, what type of insurance must the Seller procure for the Buyer?

• Institute Cargo Clauses (A)

• Institute Cargo Clauses (C)

• Domestic insurance

• No compulsory insurance

Under CFR (Cost and Freight), at which point does the risk transfer from the seller to the buyer?

• When the goods arrive at the destination port.

• When the goods are loaded on board the vessel at the port of shipment.

• When the buyer pays for the goods.

• When the goods are unloaded at the destination port.

Loc Troi Group exports rice to the US under CFR Los Angeles. During sea transport, the cargo is damaged by rough waves. Who bears the risk?

• Seller (Loc Troi Group).

• Buyer (US Importer).

• Shipping company.

• Both seller and buyer.

What is the main difference between FOB and CIF?

• CIF risk passes to the buyer when the goods arrive at the port of destination, FOB when the goods leave the port of departure.

• CIF seller pays freight and insurance, FOB does not.

• CIF applies to air freight, FOB applies to sea freight.

• There is no big difference, just a different name.

Suppose the seller delivers the goods to the ship 3 days late. Who is responsible for the costs incurred under CIF terms?

• Buyer, because the risk has passed to the buyer when the goods are on board.

• Shipping line, because they are responsible for the shipping schedule.

• Seller, because late delivery is a breach of the obligation to deliver on time.

• Both seller and buyer share according to Incoterms.

When does the transfer of risk occur under CPT terms?

• When the goods arrive at the destination.

• When the buyer makes payment.

• When the goods are handed over to the first carrier.

• When the goods have cleared customs for import.

What is the main difference between Risk and Cost in CPT?

• Risk and Cost are borne by the seller up to the destination.

• Risk and Cost are both transferred at the destination.

• Risk belongs to the buyer, Cost belongs to the buyer from the beginning.

• Risk passes to the buyer at the point of departure, but Cost is borne by the seller up to the destination.

Under CIF term, if the insurance premium increases after signing the contract, who bears the additional cost?

• Seller.

• Buyer.

• Both share equally.

• Insurance company.

CIF is beneficial for the buyer because:

• No need to do import procedures.

• No need to pay in advance.

• No need to arrange for chartering and buying insurance.

• Exemption from import duties.