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3. The fact that that documents can be tendered as normal for the full purchase price when goods are lost further results in the strengthening of the position of the documents in a CIF contract.
This strong point would appear to be a little unfair to the buyer who in reality would not just want to buy a pile of papers instead of goods under the CIF contract. However, those who argue for the importance of documents claim support for this viewpoint from the statement made by Donaldson J in M Golodetz & Co Ltd v Czarnikow-Rionda Inc (The Galatia)8 that the fact that the ship and the goods have been lost after shipment or that a liability to contribute in general average or salvage has arisen is no reason for refusing to accept and pay for the documents. It is further stated in some cases that it is irrelevant even though both buyer and seller knew of the loss of the ship before the latter tendered the documents. Indeed, from the judgments of both Manbre Saccharin Co v Corn Product Co 9and Groom (C) Ltd v Barber10, it has been confirmed that in the case of loss the buyer will receive not the goods but the documents for which he bargained. It may happen that goods are lost or damaged in transit and the buyer for some reason is not in a position to make a claim against the carrier or the underwriters. Nevertheless, though it may seem inequitable the seller may still tender the proper documents and expect payment and if the buyer has already paid the purchase price he is in no position to demand its return. Thus, a seller under a CIF contract for the sale of goods who has shipped the appropriate goods under a proper contract of carriage and obtained the proper documents, can effectively tender those documents to the purchaser notwithstanding that he knows at the time of such tender of the loss of the goods.
These opinions seem to put forward that tendering and accepting documents are the essential goal of a CIF contract, even though the buyer who wants to buy goods could also be satisfied by offering the right to claim compensation from insurance policy or carrier. If the buyer is reluctant to pursue this right,, he can easily transfer the right of claiming compensation to the sub-buyer in the name of sale of goods. However unbelievable it is, the conclusion could be drawn that a CIF contract allows the tender of the documents to replace the tender of the goods.
4. International trade practice also appear to substantiate the documentary character of CIF contracts.
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