CIF contracts

An abbreviation for "carriage, insurance and freight contract". A CIF contract is used in international business to ship the goods by sea or inland waterway.  The purchaser places an order for goods and does nothing more than wait delivery to the designated address. The vendor pays the freight costs to ship the goods which are the subject of the sale to a named destination port and is responsible for insuring the goods from damage until shipped to that destination - the vendor is liable for damage to the goods until delivery to the named port. Thereafter, risk to the goods passes to the purchaser. 

Thus arrangements and costs associated with matters such as clearing customs and other border controls are arranged by the vendor or its agent. 

The meaning of the term may vary slightly from industry to industry, the International Chamber of Commerce publishes the Incoterms, the present edition being Incoterms 2000.  For instance, in CIF contracts within the meaning of the Incoterms 2000, the vendor is only obliged to taking out minimal insurance cover.

Usage: The goods were shipped on the terms of a CIF contract within the meaning of the Incoterms 2000.

Related Words: Incoterms; ex works; CPT contract; CFR contract; CIP contract; FOB contract; retention of title clauses; jurisdiction clause; choice of law clause; damages; account of profits; locus standi; liquidated damages; general damages; special damages; assessment of damages; financial loss; mitigation of loss; contract.