FAQ - Exports

AT SIGHT
Indicates that payment of a negotiable instrument is due upon presentation or demand.

BILL OF EXCHANGE
Also called a draft.  An unconditional order from the drawer to the drawee, directing him to pay a specified amount to a named payee at a fixed or determinable future time. 

BILL OF LADING
Service as a document of title, a contract of carriage, and a receipt of goods.  Usually prepared by the shipper on forms issued by the carrier, indicating that goods are to be transported from one point to another. 

COST AND FREIGHT (C&F)
C&F means "Cost and Freight".  The seller must pay the costs and freight necessary to bring the goods to the named destination, but the risk of loss of or damage to the goods, as well as of any cost increases, is transferred from the seller to the buyer when the goods pass the ship's rail in the port of shipment. 

COST, INSURANCE AND FREIGHT (CIF)
CIF means "Cost, Insurance and Freight".  This term is basically the same as C&F but with the addition that the seller has to procure insurance against the risk of loss of or damage to the goods during the carriage.  The seller contract with the insurer and pays the insurance premiums. 

CONFIRMED LETTER OF CREDIT
A letter of credit which has been confirmed by a second bank Such confirmation is desirable, since the seller may not be familiar with the foreign bank which issued the L/C.

CONSIGNMENT
A physical transfer of goods from an exporter (consignor) to an importer (consignee) for the importer to sell.  The consignor retains title of  the goods until the consignee has sold the goods.  The consignee sells the goods for commission and remits the net proceeds to the consignor. 

D/A
Documents against acceptance; instructions given by a shipper to his bank that the documents attached to a draft for collection are deliverable to the drawee only against his acceptance of the draft. 

D/P
Documents against payment; instructions given by a shipper to his bank that the documents attached to a draft for collection are deliverable to the drawee only against his payment of the draft. 

E. & 0. E.
Errors and Omissions Excepted; a phrase accompanying the shipper's signature on an invoice, by which he disclaims final responsibility for typographical errors or unintentional omissions.
 

F. I. 0.
Free In and Out.  Refers to loading and unloading costs as they apply to the vessel.  The owner of the goods is responsible for the costs of loading and discharge.

F.O.
Free Out.  Under this term the owner of goods is responsible for discharging costs. 

FORCE MAJEURE
The title of a standard clause found in marine contracts exempting the parties for non-fulfilment of their obligations by reason of occurrence beyond their control, such as earthquakes, floods, or war. 

FREE ON BOARD (FOB)
FOB means "Free on Board".  The goods are placed on board a ship by the seller at a port of shipment named in the sales contract.  The risk of loss of or damage to the goods is transferred from the seller to the buyer when the goods pass the ship's rail. 

L/C
Letter of Credit.  A document issued by a bank at the buyer's request in favour of the seller, promising to pay the agreed amount of money upon receipt by the bank of stipulated documents within a specified time.

 

Courtesy: TDAP