Export & Commercial Trade Terms
An educational reference guide for global commodity traders, importers, and procurement directors navigating international rice export contracts.
Incoterms
Free on Board (Named Port of Shipment)
The seller delivers the goods on board the vessel nominated by the buyer at the named port of shipment (e.g., FOB Karachi Port). The risk of loss or damage transfers to the buyer once goods are on board the ship.
Cost, Insurance and Freight (Named Port of Destination)
The seller arranges and pays the costs, ocean freight, and marine cargo insurance necessary to transport the rice to the named port of destination (e.g., CIF Jeddah Port or CIF Felixstowe).
Cost and Freight (Named Port of Destination)
The seller pays the costs and freight necessary to bring the goods to the named port of destination, while marine insurance is procured directly by the buyer.
Payment Terms
Letter of Credit
A binding financial instrument issued by a reputable bank guaranteeing that the seller will receive full payment once complying export shipping documents (Bill of Lading, Phytosanitary Certificate, SGS Quality Certificate, Invoice) are presented.
Confirmed Letter of Credit
A Letter of Credit to which a second bank (typically in the exporter’s country or an international prime bank) adds its confirmation, providing an independent legal payment guarantee.
Payment At Sight (Sight Draft)
A provision in a Letter of Credit or Bill of Exchange requiring immediate payment upon presentation and verification of clean shipping documents to the paying bank.
Documents Against Payment (Cash Against Documents - CAD)
An international trade arrangement whereby the buyer’s bank releases original shipping documents allowing cargo clearance only after the buyer makes full payment.
Documents Against Acceptance
An arrangement where the buyer obtains title documents from their bank after signing an acceptance draft agreeing to pay at a future specified maturity date.
Commercial
Errors and Omissions Excepted
A commercial legal disclaimer applied to quotations, proforma invoices, and specification sheets indicating that the issuer reserves the right to correct accidental errors or omissions.
Force Majeure Clause
A standard contractual provision freeing both trading parties from liability in the event of extraordinary, unforeseeable natural disasters, war, port blockades, or government export embargoes.
Shipping Terms
Free In and Out
A maritime chartering term indicating that the cargo owner or charterer is responsible for loading (In) and discharging (Out) costs of the cargo.
Consignee (Named Receiver)
The party named on the Bill of Lading to whom the carrier is contracted to deliver the cargo upon arrival at the destination port.