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Simple English definitions for legal terms
carriage and insurance paid to
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A quick definition of carriage and insurance paid to:
Term: CARRIAGE AND INSURANCE PAID TO
Definition: Carriage and insurance paid to (CIP) is a term used in business contracts for buying and selling goods. It means that the seller is responsible for clearing the goods for export, getting insurance to protect the buyer from damage during transportation, delivering the goods to the buyer's chosen carrier, and paying for the transportation costs to the named destination. Once the goods are delivered to the carrier, the seller's job is done, and the buyer takes on the risk of any loss or damage. Any mode of transportation can be used to carry the goods.
A more thorough explanation:
Definition: Carriage and insurance paid to (CIP) is a term used in international trade that outlines the responsibilities of the buyer and seller in terms of delivery, payment, and risk of loss. The seller is responsible for clearing the goods for export, obtaining insurance against damage during transportation, delivering the goods to the buyer's chosen carrier, and paying for the cost of transportation to the named destination. Once the goods are delivered to the carrier, the seller's responsibility is complete, and the risk of loss passes to the buyer.
Example: A company in the United States purchases goods from a supplier in China. The supplier agrees to CIP terms, which means they are responsible for clearing the goods for export, obtaining insurance, and delivering the goods to the carrier. The buyer is responsible for paying for the goods and any import duties, as well as any costs associated with the goods once they arrive at the named destination.
Explanation: In this example, the CIP terms outline the responsibilities of the buyer and seller. The seller is responsible for ensuring the goods are delivered to the carrier and are insured against damage during transportation. The buyer is responsible for paying for the goods and any associated costs once they arrive at the named destination. If the goods are damaged during transportation, the insurance obtained by the seller would cover the cost of the damage.