FCA contracts

FCA is an abbreviation for "Free Carrier", and is defined by Incoterms 2000. Free Carrier contracts are those whereby the seller of goods has the obligation to deliver the goods to a place named or nominated by the buyer. In the event that delivery is to take place at the seller’s premises, the seller has the obligation to load the goods; in any other case, the buyer is responsible for unloading the goods once delivered by the seller. The seller is obliged to arrange for insurance to cover risk to the goods until the goods have been delivered to the place nominated by the buyer, but at the buyer’s expense. The buyer must take delivery once the goods have been delivered by the seller at his own expense.

FCA contracts are usually used in circumstances where one or more means of transport are used to deliver the goods. Also, the seller will be liable for the goods until such time as the goods are delivered, and must procure export licences and other documentation for export of the goods.

The buyer is responsible for import licences and transit through any country after export.

Under FCA contracts, the seller has delivered the goods when:

1. delivery is to take place at the seller’s premises, when the goods are loaded;
2. delivery is to a place other than the seller’s premises, when the goods are made available to the buyer or the buyer’s nominated carrier;
3. in the event that the seller has arranged carriage, once the goods arrive at the destination. The buyer is responsible for unloading. Where there are several points at the place of delivery, the seller may choose the point of delivery at his convenience.

Incoterms are standard terms made by the International Chamber of Commerce in order to standardise terms relating to contracts for the sale of goods and are frequently used as terms in international contracts for the sale of goods.

Usage: The seller complied with the obligation to take out insurance imposed by the FCA contract.

Related Words: Incoterms; CIF contracts; ex works; CPT contracts; CFR contracts; CIP contracts; 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.