Investigating the insurable interest of the buyer and seller in the import and export business
Dzwairo, Sharon Wadzanai
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In the import and export business, once a buyer and a seller have agreed on the product and price, they also have to agree on special terms that will ensure that the parties’ different obligations are fulfilled. The seller has an interest in the payment he1 receives for the goods and the buyer has an interest in the actual goods. Both parties therefore have to agree on an insurance policy that will protect the goods from harm, from the time they are at the seller’s warehouse to the time that they reach the buyer’s warehouse. Depending on the type of contract they agree on, the risk of loss, damage or destruction in respect of the goods will be transferred from the seller to the buyer at different crucial stages of the voyage. If the parties contract according to the cost insurance and freight 2 terms, then the seller has the responsibility to procure insurance for the goods. If the parties contract on the terms of the free on board 3 contract, then it is the buyer's responsibility to procure insurance for the goods from the time that the seller delivers them past the ship’s rail. Finally, if the parties trade according to the ex works 4 contractual terms, then the buyer’s obligation is more burdensome because he has to insure the goods already when they are on the premises of the seller, from where he has to collect such goods. In international sales contracts, all such issues are covered, some with great flexibility and others with great misunderstanding. All these matters are dealt with in the present research in an attempt to investigate which party to an international trade contract has an insurable interest in the goods and at what stage during the execution of each party’s duties in terms of the sales contract.
- Law