|
It is a fact that goods traveling by sea can take up to several months to arrive at their destinations. In the modern world it would be unacceptable that a businessman should wait this length of time before being in a position to deal further, so it would be very helpful if all parties accept the concept that one of the most important functions of the CIF contract is to enable buyers and sellers to deal with goods afloat in order to finance further ventures. As a result, it is widely accepted that the documents in representing the goods have a value equivalent to the value of the goods and they can be bought and sold before the goods ever arrive at their port of discharge. It is also true that many CIF contracts demand the involvement of more than just two parties, for example, where the buyer relies on his bank to settle the invoice at first instance, the bank will want proof that the contract has been performed properly, so the seller should assure the bank by the documents that his performance conforms to the contractual requirements. Furthermore, the documentary nature of a CIF transaction lends itself readily to the introduction of the agents of parties and other intermediaries such as bankers, insurers, carriers and their brokers. The documents are relied upon by all these parties, not only to form the basis for negotiations, but also to represent their legal interests before the goods arrive. The role of documents that cater for the interests of a multitude of parties imposes a documentary character on a CIF contract.
At the same time, these demands of practical convenience frequently find support from judicial authority, because it is doubtless the case that many of the decisions in the relevant case law have been determined by practical as much as legal considerations. It has always been the legal aim to avoid, where possible, the imposition of terms or provisions which were not intended by either party at the outset. Equally, it seems that the courts tend to adapt their decisions in order to facilitate international trade.
As has been discussed above, without examining the opposing views which follow, these would appear prima facie to be strong arguments to suggest that CIF is a contract for sale of documents; however, this is not entirely correct.
III. Why the Essence of a CIF Contract is still
the Sale of Goods
1. It is by no means a unanimous belief that documents can rightly be termed the essence of a CIF contract; indeed not all authorities are of that view.11
|
