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What is the primary responsibility of the seller under CIP terms?
Seller delivers goods to the buyer
Seller pays for carriage and insurance
Seller pays for costs and freight of the goods
Seller takes all costs
The correct answer is: Seller pays for carriage and insurance
Under CIP (Carriage and Insurance Paid to) terms, the primary responsibility of the seller is to pay for carriage and insurance for the goods being transported to a specified destination. This means that the seller must arrange and cover the costs associated with shipping the goods and obtaining necessary insurance to protect against loss or damage during transit. CIP terms place a significant burden on the seller, as they are not only responsible for delivering the goods but must also ensure that the goods are insured for the journey. This insurance is critical because it mitigates risk for both the seller and the buyer, ensuring that financial protections are in place should unforeseen circumstances affect the shipment. While the seller also has obligations to deliver the goods and handle certain costs, the defining characteristic of CIP is the provision that the seller bears the responsibility for both freight and insurance, highlighting the importance of risk management in international shipping contracts.