Commercial Law: CIF Contracts, Letters of Credit, Autonomy and Strict Compliance Principles, UCP 600 Standards, and Legal Position

Commercial Law

Table of Contents
INTRODUCTION ..........................................................................................................................2
MAIN BODY...................................................................................................................................2
Key features of CIF contracts:....................................................................................................2
Types of Letters of Credit: .........................................................................................................4
The principle of autonomy and the principle of strict compliance of letters of credit:...............5
Standards for the examination of documents under the UCP 600:.............................................6
Relevant provisions of UCP 600:................................................................................................6
Advise to the bank on its legal position: ....................................................................................7
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................9
INTRODUCTION
Commercial law can be defined as those laws that regulate the business and the sale and
purchase of goods and services that is included under it. These define the legal services that are
laid down in order to support the businesses on various aspects that can affect them. This law
primarily deals with two branches which are law of contract and tort laws. Commercial law
creates a type of obligation among the parties with respect to the commercial transactions that
are carried out between them. Thus, it can be said as a branch of civil law that deals with
business issues. CIF Contracts basically indicate that the price of anything must always comprise
Cost, Insurance and Fright(Aladwan, 2020). This report will cover in detail the key features of

the CIF contract, the different types of letters of credit, the principle of autonomy and the
principle of strict compliance under the letter of credit. It shall also explain the standards for the
examination under UCP 600 while also covering its relevant provisions and reference case laws
that relate to it.
MAIN BODY
Key features of CIF contracts:
CIF Contracts stands for Cost, Insurance and Fright and it is a type of international
agreement that is made on shipping and which confers a list of rights and duties on both the
parties which are the buyer and seller that are included in the contract. In this contractual
agreement, it is agreed to sell the goods at an inclusive price that covers the cost of the goods,
insurance and the freight that is payable for the carriage of the goods to the specified destination
in the contract (Alavi, 2019) .
The central feature of this contract is that it relates to shipment contracts. The essential
features of CIF contracts are that the seller is required to ship and also acquire after the shipment
takes place the defined goods in the contract because, if there is a situation of uncertainty the
seller is required to provide a notice of appropriation. They have to obtain proper bills of lading
and proper policies of insurance on the date of shipment or after the shipment. The contract is
fulfilled by the seller when they transfer those bills and policies to the buyer. But this is only
done against the payment of the price in which the buyer has to pay less the freight.
The key feature of CIF contracts are the rights and obligations of both the parties that are
seller and buyer in respect of the goods and the documents. It is believed that under the CIF
contract, the seller is under the obligation -
 to ship the goods according to the description made in the contract at the agreed port of
shipment or to procure the goods to meet the requirements of the contract
 to enter into a contract relating to a carriage which includes the delivery of goods by the
carrier to the agreed port of discharge and also acquire a bill of lading of the goods
 to have a proper contract of insurance for the goods which are made available to the
buyer(Asanwana and Efombruh, 2018)
 to attach a commercial invoice with the goods that must be according to the description
of goods made in the contract