C.I.F. or F.O.B.: That is the Question! Main Features of the Two Contracts for the International Sale of Goods

Abstract

Despite the development of technology and internet which by far have affected the way how business is conducted and contracts performed, goods (save for intangibles ) are still shipped from the seller’s place to the purchaser’s place in the traditional way, i.e. by road, rail, sea, or air transportation. For the purposes of our paper we will focus on the shipment of goods by sea transportation because the majority of export-import activities are carried out through the sea. It is the goal of this paper to identify the two most employed contracts for the international sale of goods, explain the features characterising each contract and point out the differences between them.

Keywords: International sale of goods, CIF, FOB

JEL Classification: F10, K33, K12, N70