Chapter 5 vocabulary

clean bill of lading

A _____ is one that contains no notations by the carrier that indicate any visible damage to the goods, packages, drums, or other containers being loaded. Buyers should insist that all contracts call for the seller to provide a _____.

documentary draft

A ______ is necessary to expedite the exchange of money. If is a negotiable instrument for making payment for the invoice and for the bill of lading. -negotiable "order to pay" made out by the seller, drawn on the buyer for collection, and payable to the order of the seller Its purpose is to tell the parties how much to pay when purchasing the bill of lading

document of title

A negotiable ______ is a document that evidences the ownership of goods it represents. It entitles the person who possesses the document to possess the goods. These are created out of a special "bailment" relationship

Open account

All buyers would like to buy on these terms This is where the seller grants an extended credit period for the buyer to pay, typically 30 days.

on-board bill of lading

An _____, signed by the ship's master or other agent of the carrier, states that the goods have actually been loaded aboard a certain vessel. In most documentary sales, the buyer would want to specify that payment is conditioned upon receipt of a negotiable, clean _______. Gives some assurance that the goods described in the bill of lading have actually been loaded on board and are under way to the buyer. It also insulates the exporter from loss of the goods before loading.

destination contract also known as "arrival contract"

If the contract calls for the seller to deliver the goods to a particular destination, such as the buyer's city or place of business, the contract is a ______. Under the UCC, the risk of loss in a ______ passes to the buyer when the good are tendered to the buyer at the point of destination

shipment contract also known as a "departure contract"

If the contract calls for the seller to ship the goods by carrier but does not require the seller to deliver the goods to a named place, then it is a ______ In a _____, the risk of loss or damage to the goods passes to the buyer when the goods are given to the first carrier - be it truck, airline, or ocean carrier. These are more common in international trade because sellers usually prefer not to be responsible for the goods at sea

multimodal

If the transport is executed using more than one mode of transportation, the transport is ______

certificates of inspection certificates of weight certificates of analysis

In many industries, buyers will require that an inspection report of a reputable, independent testing laboratory or inspection service, usually located in the seller's country, accompany a bill of lading. These might certify the quantity, quality, or other characteristic of the goods being purchased.

straight bill of lading

In nondocumentary sales, a nonnegotiable or ______ will suffice. Ocean carriers only use this if the seller intends that the goods be delivered directly to the consignee, a specific person, named in the bill

air waybills

Most air transport is handled through nonnegotiable _____ issued by air cargo carriers. The carrier will make delivery only to the consignee named in the bill

electronic data interchange (EDI)

Paper transport documents are increasingly being replaced by ______, whereby shipping data are transmitted over the Internet using one of several standards Under this practice, trade documents such as bills of lading, letters of credit, and certificates of origin may be filed electronically at a central database

transport document

Seller places the goods in the hands of a carrier and in return receives a negotiable bill of lading or multimodal ____ made to its order or assigns.

CIF Cost, Insurance, and Freight

Seller's responsibilities: Contract for transport and pay freight charges to the named port of destination. Arrange for loading of goods on board ship, usually of seller's choice, and pay costs of loading. Obtain export license. Notify buyer of shipment. Documentary sale is assumed. Tender documents to buyer. Same as CFR, with added requirement that seller purchase marine insurance. Insurance policy is assigned to buyer. Documentary sale is assumed. Buyer's responsibilities: Purchase document of title and take delivery from ocean carrier. No date of delivery at buyer's port is implied. Pay import duties. Enter goods through customs. Same as CFR, except seller supplies insurance. Buyer may request additional insurance coverage at own expense. Passage of risk: when the goods are on board at port of shipment. If damage or loss, buyer files a claim with insurer.

FOB Free on Board

Seller's responsibilities: load the goods on board the ship specified by the buyer within the time required by the contract. Pay costs of loading. Obtain export license. Buyer's responsibilities: Choose ocean carrier and pay freight charges. Enter goods through customs Passage of risk: when the goods are on board at port of shipment

multimodal transport document combined transport document

The ______, or ______, is a single contract between the shipper and the operator, who, in turn, contracts with each of the carriers involved. They are sometimes referred to as "through bills of lading" The operators become responsible for the shipment of goods throughout the time of their transport

certificate of origin

The customs regulations in the buyer's country may require a ______.

CIF contracts

The seller must not only tender a bill of lading to the buyer for payment but also provide marine insurance on the goods and prepay the freight charges to the foreign port The acronym ____ is a trade term that stands for "cost, insurance, and freight."

commercial invoice

The seller's ____ describing the goods and showing the price to be paid is always required.

collecting bank

The seller's bank forwards the draft and documents to a ______ in the buyer's country, with instructions to release the documents to the buyer only on payment of the draft. This is any bank authorized to collect on an instrument. When the buyer pays the draft, the _______ remits the money back to the seller's bank.

paramount title

Title which is superior or foremost to all others.

F terms

Under _______, the seller must deliver the goods to the designated point of departure "free" of expense or risk to the buyer. At that point, the risk of loss passes from seller to buyer.

constructive delivery

When a negotiable document of title is sold in the ordinary course of trade, the seller is said to have made a ______ of the goods to the seller. The property can stay in the possession of the bailee while the owner or subsequent owners sell or resell it or pledge it as collateral for a loan

trade terms sometimes called shipping terms

While it is possible to draft a detailed agreement for allocating shipping and transportation charges between the buyer and seller and to specify when the risk of loss shall pass, in most routine cases this is done by using ______. These are usually expressed in the form of abbreviated symbols, such as FOB or CIF.

Multimodal transport operators combined transport operations

________, sometimes called ______, are firms that arrange for cargo to be sent via several different carriers in one journey - truck, rail, barge, and/or ship.

bill of lading

a document of title than an ocean carrier issues to a shipper upon receiving goods for transport -It is a receipt for the goods from the carrier, indicating any damage to the goods that was visible or apparent at the time of loading -It is the contract of carriage between the shipper and the carrier (i.e., a transport document) -It is the document of title to the goods described in it

bailment

a relationship involving the separation of ownership and possession of personal property

consignee

a specific person, named in the bill of lading May be the foreign buyer. May also be the buyer's bank or customs agent

documentary sale

a type of contract for the sale of goods in which possession and ownership of the goods are transferred from seller to buyer through negotiation and delivery of a negotiable document of title issued by an ocean carrier

Payment risk

also called credit risk the risk to the seller that the buyer will fail to pay as promised

marine insurance

covers the risks of the ocean voyage

Incoterms

includes 11 trade terms classified into four groups - E, F, C, D- according to the relative responsibilities of each party and to the point at which the risk of loss passes from seller to buyer. Must be stated specifically in contract because they are not automatically part of a contract

received-for-shipment bill of lading

issued by a carrier only upon having received goods for transport It has limited use in cases of a delay between the delivery of goods to the carrier and their being loaded aboard ship.

E terms

place the lowest amount of responsibility on the seller. The buyer must arrange all transportation and bear all risks and expenses of the journey from that point. The buyer must also clear the goods for export by obtaining export licenses from the US government.

holder by due negotiation

referred to as a good-faith purchaser one who purchases a negotiable document -for value (and not in settlement of a past debt) -in good faith and without any notice of any adverse claim against it - and in the ordinary course of business or financing

transaction risk

refers to the risks facing the buyer and seller when they move money and goods in an international sales transaction arise from barriers that separate the buyer and seller, including distance, oceans, the time that the cargo is out of possession of the parties, communication and language difficulties, cultural differences, national boundaries, interference by local customs authorities, and legal systems.

D terms

sale of destination (or "arrival") contracts. May be used for any mode or modes of transport.

negotiable instruments

serve as a substitute for money

C terms

shipment contracts where the seller is responsible for certain costs after the delivery of goods to the carrier. Risk of loss passes to the buyer when the. goods are on board the vessel or carrier.

bailee

the one to whom the personal property is entrusted

bailor

the owner of person property

documentary collection

the process by which banking institutions serve as intermediaries between seller and buyer to handle the exchange of the bill of lading for payment

Delivery risk

the risk to the buyer that the seller will fail to ship the goods as called for in the contract

Negotiation

the transfer of a document of title by its owner to another in a manner that passes title to the document, title to the goods, and the right to claim the goods from the issuer of the document

negotiable documents

used to move goods and to transfer their ownership and possession

freight forwarders

usually also act as customs brokers for importers federally licensed individuals who act as agents for sellers. They handle their foreign shipments, book transportation, prepare documents and customers forms, and perform other functions