DE LARA, GLENDA R.

BSBA- FM 3-1

A ceramics manufacturer in China promised to deliver 25 crates of

vases to a Japanese importer under a “CFR” Incoterm agreement.
During transit, however, a large number of vases were broken. The
buyer wants to pay the manufacturer only for the ceramic vases
which arrived in good condition saying that the manufacturer is
responsible for the shipment and for paying the freight charges. Is
the importer right on its claim? Assess the situation and justify your
answer.

The importer is invalid in claiming that he pays the manufacturer

only for the ceramic vases that arrived in good condition because the
manufacturer has no control over the shipment of the products, and only
the courier has the ability to preserve and protect such fragile parcel. As
a result, the importer must pay the manufacturer the whole amount of
the purchase. However, s/he is absolutely correct when he states that
the manufacturer is responsible for paying the freight charges.