Group members – Group 2:

1. Huỳnh Thị Thảo

2. Nguyễn Lê Mỹ Linh
3. Đoàn Đức Tâm
4. Bùi Lê Bích Thương
5. Đỗ Anh Tú
6. Lê Quỳnh Giảng Nguyên
7. Trần Hồ Đức Huy
8. Tạ Nhật Nam
9. Nguyễn Thị Hà Vy
10. Trương Công Huy Hoàng.

GROUP ASSIGNMENT CHAPTER 2 – GROUP 2

Exercise 1:

1) FOB => CIF = (FOB + Freight) / (1-R) = (700,000 + 150,000) / (1 – 0.2%)

= 851,703 > 850,000 USD

=> Choose CIF 850,000 USD

Next:

CIF => DAP = CIF + On carriage + DAP * R – CIF * R

= 850,000 + 80,000 + 950,000*0.2% - 850,000*0.2%

= 930,200 < 950,000 USD

=> Choose CIF

=> So the buyer choose CIF

2) If the buyer wants to buy under the term of DDP, the seller will:
- pay costs:

DDP = DAP + Import duty

= EXW + pre-carriage loading + pre-carriage fee + pre-carriage unloading +

main-carriage loading + Freight + main-carriage unloading +export duty +

on-carriage loading + on-carriage fee + Import duty.

- bear risks:

DDP is the same as other conditions such as: Delivery at the factory (EXW), Delivery
to the carrier (FCA), Delivery at the port (DAT), Delivery at the destination (DAP),
Delivery of tax (DDP), Delivery along the side of the ship (FAS), Delivery on board (FOB),
the designated place is the place where delivery takes place and also the risk of transferring
from the seller to the buyer. Therefore, it is necessary to specify the place or port as
accurately as possible when agreeing on the contract of delivery terms

 Bear all risks from the beginning of shipping to the final destination (at the buyer
’warehouse in Tokyo)

3) DAP and DDP differ only in that the seller is the importer of customs clearance for the
buyer.

Case 7.1:

Summary:

A contract of sale for the sale of a mobile MRI machine:

- Seller is Tola, a German corporation.
- Buyer is BAT Inc., an American company.
- When the machine reached its final destination, it had been damaged and was in need of extensive
repair.
- BAT and its insurance company believe that the MRI machine was damaged in transit and they
intends to recover from Tola.
- Tola claims that the goods were ship under CIF so the risk of loss ended when it delivered the
machine to the vessel at the port of shipment.
Analyze the case:

In this case, there may be two situations:

1. If in the contract, there is a clear mention of CIF, Incoterms application, there is no

provision except CIF, the Purchaser is wrong. Because the buyer and the insurance
company believe the damages was occurred in transit so under a CIF contract when
receiving damaged goods, the Buyer is obliged to notify the Seller and the Insurance
will pay for this damage.
2. If inn the contract, the terms of risk transfer are excluded, part of CIF is excluded and
there is no mention of the entire Incoterms application, Incoterms does not adjust the
entire Contract. When the goods reached to destination, it had been damaged. Thus, the
buyer has the right to reject the goods because it was considered as not in conformity
with the contract and claims compensation from the Seller. This is seen as breach of
contract.

However, the delimitation of the fault by either party depends on many other factors such as
the terms of the contract signed and approved by the two parties, the exemption of some
provisions in Incoterms, the terms that lead to CIF disabled ...