International Commercial Law - Title To Sue

Title To Sue

Where loss or damage to goods is incurred by a party to the contract of carriage, that person may sue directly on that contract. A seller under a CIF (‘cost, insurance, freight’) sale contract will have entered into the contract of carriage directly with the carrier, and can sue as principal. Where loss or damage occurs when risk has passed to the buyer, the buyer may benefit under the contract of carriage with the seller, depending on contract terms between buyer and seller.

Under an FOB (‘free on board’) sale contract the bill of lading determines if either the seller or the buyer is named as the shipper. This will ascertain who has contracted as principal to bring action against the carrier. Where loss or damage occurs before risk passes to the buyer, the seller may benefit under the contract of carriage made with the buyer .

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