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Cif Contract

By | November 2010
Page 1 of 3
A c.i.f. contract made in August, 1951, between the defendants, British Traders and Shippers Ld., London exporters, and the plaintiffs, Kwei Tek Chao and others (trading as Zung Fu Co.), Hongkong merchants, provided for the sale by the defendants of 20 tons of Rongalite, a chemical, at a price of £590 perton. The contract provided for shipment from a continental port by October 31, 1951, latest, and payment was to be against confirmed letter of credit against the defendants' draft, drawn upon the plaintiffs 60 days after sight, accompanied by on board bills of lading and shippers' documents. Rongalite was at the time in great demand on the China mainland and the plaintiffs had entered into a contract to resell the goods to a Chinese merchant.

The goods were delivered to Antwerp by the third party called smits, from whom the defendants had obtained them, and were on the quay by October 31 for shipment on the ship, advertised to arrive at Antwerp on October 31, space having been obtained by Slootmakers, shipping agents acting on behalf of the defendants. The defendants informed the shipping agents that the goods must be loaded on October 31 and instructed them to “take out bills of lading on our behalf … Bill of lading to be dated not later than October 31 … Clean bill of lading evidencing ‘goods shipped on board.’” In fact the ship did not arrive until November 1 and the goods were not loaded until November 3. Without the knowledge of the defendants the bills of lading were qualified by the addition of words so that the relevant clause read “received for shipment and since shipped October 31” but the words were subsequently deleted. Copies of the bills of lading were handed over to Smits' agents and Smits presented them for payment to the defendants' bank in Sweden in accordance with their contract with the defendants. On November 10, the defendants' bank presented the documents to the plaintiffs' bank and on November 12 were paid the sum due under the letter...
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