The Conditions of Sale 1

price, weight, included, tare, free, net, trade, freight and buyer

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In some cases the price is not agreed upon at all. Metals are frequently bought in Europe at an aver age price which is based upon the quotations of the London metal exchange for that month. In this country zinc ore is bought on the basis of the quota tions for metal in the St. Louis market. In Italy, raw silk is also bought at an average price. In some trades a "fluctuation clause" is included in the price agreement to guard against losses due to violent fluc tuations of market prices. In the London egg trade the price for the first half of the week is governed by the quotations of the Monday market. Sales made during the latter part of the week are frequently made "subject to the ,alteration of next Monday's market." 7. Gross weight vs. net goods are sold by weight it is essential to indicate whether the price refers to net or to gross weight. Usually net weight is made the basis, but where the tare cannot be readily separated from the goods they may be sold "gross for net." In many lines the inner package, paper winding or cardboard boxes, are included in the net weight. To differentiate between this net weight and the actual weight of the goods the term "net-net weight" is sometimes used. When it is vir tually impossible to separate the goods from their container, an arbitrary tare is figured. This usually corresponds closely to the normal actual tare, but in some trades it is purposely set higher than normal. In the Hamburg coffee trade a two per cent deduction is made for tare unless the actual tare is above one and one-half per cent when for every one-quarter ad ditional, the same amount is added to the trade tare. In the Liverpool cotton market, a flat six per cent deduction is made for tare.

8.. Who pays for the foreign trade the high cost of packing goods for transport forms a noticeable part of the cost of the goods. In order to protect metals against the effects of over-sea-voyages, heavy boxes lined with tin, hermetically sealed, are frequently indispensable. It is by no means always necessary for the seller to bear the entire burden. In the sales contract a clause may be inserted by which the expense of packing falls largely upon the buyer. Such goods are then quoted "package excluded," as against "package included," for those cases where the costs are borne by the sellers. Not infrequently the cost of packing is calculated in percentages of the amount of the invoice.

9. What is included in the price may be quoted for the goods as they lie in the warehouse, all charges for transportation, insurance and other in cidentals being additional. This is called an "ex warehouse" quotation or sometimes loosely an "f. o. b." offer. As a matter of fact, "f. o. b.," strictly speaking, should be understood to mean "free on board" the vessel. In order to guard against mis understandings, it is well to qualify the "f. o. b." clause and to speak of "f. o. b. railroad car our factory," or "f. o. b. steamship New York." This qualification

may also prove helpful in case of litigation, since "f. o. b. steamship New York" beyond any question places the risk of transportation upon the shoulders of the purchasers. Sometimes the term "free along side" is used to indicate sharply the place where re sponsibility for outlays passes to the buyer.

If the price is quoted so as to include the freight to the port of destination the term "cost & freight" or "c & f" is applicable. More usual is an offer "c. i. f." which means cost, insurance and freight included. Sometimes the French abbreviation is used, "c. a. f." and infrequently the German "k. f. a." Under these terms the price includes all expenses up to the point where the goods are taken from the vessel at the port of destination. The expenses of unloading, if any, must be borne by the buyer.

A "c. i. f." contract is most usual and most satis factory all around. The seller is in a position to as certain both freight and insurance charges, while the buyer can easily find out what unloading and further transportation will cost him. The goods travel, how ever, upon the ocean at the risk of the buyer and not, as is commonly supposed, at-the risk of the exporter. When the cost of unloading is included, the term "free at quay," or "free overside" is used, but this method of quoting is not very common.

In Continental trade, firms go further and quote Trices "free godown," or "free in store." In this price is included every possible expense, not excepting import duties. Thoro familiarity with foreign tar iffs, local freight and drayage rates makes such quo tations possible, and the firm in a position to quote such prices is at a considerable advantage when com peting with firms unable to quote any but "f. o. b." prices. Sometimes prices are quoted "in bond," indi cating that the goods are delivered in a designated warehouse, but that the seller does not undertake to Pay the duty.

In order to remove another uncertainty from the sales transaction, the seller is frequently willing to shoulder any fluctuations in exchange which may oc cur during the period between the closing of the sale and the date of payment. This is indicated by the form "c. i. f. & e." or "f. o. b. & e." Chinese import ers prefer to carry the exchange risks themselves, hoping to make an additional profit by this specula tion.

In indent transactions "c. i. f. & c." prices are not infrequent. This means that the commission charged by the middle man is also included in the price. "C. i. f. i. c." goes even further and includes also the interest charges which frequently accumulate to con siderable amounts in indents. The indent will be discussed later in this chapter..

10. Conditions of closing a sale the conditions of delivery often receive too little attention. Difficulties may arise thru no other cause than neglect to state clearly when and where the delivery of the goods is to take place.

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