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Additionally, the seller cannot tender documents relating to lost or damaged specific goods. It is undeniable that there have been cases which allowed for tender of documents relating to lost or damaged goods24, but in these cases the time of documentary tender was after shipping; in other words, the sellers had fulfilled the obligation of delivering goods before tendered the documents. However, if it was known or even unknown to the parties that the carrying vessel had become a total loss before the bargain was struck, the result would be different. For instance, under the later circumstance, in Couturier v Hastie25, it was argued by the seller that the buyer had bought in fact the shipping documents, the rights and interests of the vendor. However, this argument was rejected by the House of Lords on the ground that the parties contemplated the existence of the goods. In fact, according to the opinion of the Lord Chancellor, “a CIF contract for the sale of specific goods is void if at the time of the contract the goods had perished, even though there was in existence at that time a set of shipping documents including a valid policy of insurance on the goods.” 26In addition, Couturier would also tend to put a stop or limits27 to Manbre Saccharin Co v Corn Product Co28 and related cases which allow for tender of documents relating to lost or damaged goods. It seems that the effect of the judgements in Couturier v Hastie is that a CIF contract is in fact a contract for the sale of goods, because however symbolic the documents might be of the goods, the existence of the good is essential.
4. After acceptance documents the buyer can still reject the goods or the documents themselves on the basis of goods transaction, that is to say the independence of the documents is conditional and limited.
Tender of the documents is not the final purpose the CIF contract: without goods or without conforming goods, the contract will not be completed. After the tender of documents, the goods might be rejected29 if, when they arrive, they are found to be non-conforming. For instance, in Kwei Tek Chao v British Traders & Shippers Ltd30, where the defect in the documents is discovered before taking delivery of the goods, the buyer are entitled to reject the consignment even though the goods had been paid for and the property had passed to the buyer. Devlin J. held that the buyer were entitled to reject the goods, the title of which was defeasible. In so saying, those who suppose CIF to be sale of documents will perhaps argue that it would be inequitable to allow the buyer to go back on his promise, but in the eyes of sale of goods it would be reasonable. Although the property in the goods transfers from the seller to the buyer on the tender of documents, that transfer is not the fulfillment of the contract and the passage of property is subject to the condition that they re-vest, if upon examination the buyer find them not to be in accordance with the contract. In other words, the buyer gets only conditional property of the goods by possession the documents, thus, his dealings with the documents are merely dealing with the conditional property in the goods, and the seller who transfers the documents on in exchange for payment in merely selling on his conditional property in the goods. This is not an academic conclusion: the decision in the case of Hindley & Co v East India Produce Co Ltd 31 further supports this view.
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