Incolearn – Learning more about Incoterms 2000

FREE CARRIER (FCA) PART III
– The Buyer’s Obligations According to the International Chamber of Commerce (ICC), the second Incoterm Free Carrier (FCA), at a named place, is defined as “the seller delivers the goods, cleared for export, to the carrier nominated by the buyer at the named place. The chosen place of delivery has an impact on the obligations of loading and unloading the goods at that place. If delivery occurs at the seller’s premises, the seller is responsible for loading. If delivery occurs at any other place, the seller is not responsible for unloading”. Professor Jan Ramsberg, the chairman of the ICC Working Party on Trade Terms, identified ten obligations that the buyer might need to fulfil in term of FCA: (1) the payment of the price; (2) licences, authorisations, and formalities; (3) contracts of carriage and insurance; (4) taking delivery; (5) transfer of risks; (6) division of costs; (7) notice to the seller; (8) proof of delivery, transport documents or equivalent electronic message; (9) inspection of the goods; and (10) other obligations. The payment of the price requires the buyer to pay the price stipulated in the contract of sale. In respect of the licences, authorisations and formalities the buyer is required at his own risk and cost to obtain such documentation and authorisation, and is responsible for their transit through any country. The buyer must contract the carriage for the goods at his own expense from the named place, except when the seller makes the contract of carriage. The buyer has no obligation in respect of the contracts of insurance. The buyer must take delivery of the goods when they have been delivered in accordance with the contract of sale. As for the transfer of risks the buyer bears all risks of loss of or damage to goods from the time of delivery, and from the agreed delivery date. In relation to the division of costs, the buyer is responsible for all costs relating to their delivery, any additional costs incurred due to his failure to nominate a carrier or if the nominated person fails to take delivery if the goods, or the buyer fails to give sufficient notice to the seller, and, where applicable, all duties, taxes and other charges payable upon import of the goods and for their transit through any country. The buyer must give sufficient notice to the seller of the name of the person or carrier, the mode of transport, the date of delivery of the goods, and the place of delivery of the goods. The buyer must accept the proof of delivery, transport documents or equivalent electronic message. The buyer must pay the costs for the inspection of the goods except when the authorities of the country of export mandate such inspection. As for other obligations, the buyer must pay all costs incurred to obtain the relevant documentation and also reimburse the seller for any costs incurred in rendering such assistance. The buyer must also inform the seller whether his assistance is required in the contracting of the carriage. Next week’s column will provide a summary of the Free Carrier (FCA) term.