Canadian Accredited Insurance Broker (CAIB) Three Practice Exam

What is a significant provision of the Terms of Sale/Contract regarding ocean marine cargo?

1. It requires pre-insurance before shipment

2. It outlines responsibilities and payment methods for the value of the cargo

3. It permits only cash payments

4. It mandates additional fees for shipping delays

The correct answer is: It outlines responsibilities and payment methods for the value of the cargo

The significant provision of the Terms of Sale/Contract regarding ocean marine cargo is that it outlines responsibilities and payment methods for the value of the cargo. This provision is crucial because it specifies who is responsible for the cargo at different points in the shipping process, as well as how payment for the cargo should be handled. By clearly defining these aspects, it helps prevent disputes between the buyer and seller, ensuring that both parties are aware of their obligations and rights. This clarity is essential for smooth transactions in international trade, where various parties and regulatory requirements are involved. The other provisions mentioned, such as requiring pre-insurance before shipment, permitting only cash payments, and mandating additional fees for shipping delays, do not encapsulate the core intent of the Terms of Sale/Contract in managing the relationship and transaction between buyers and sellers within ocean marine cargo. While they may be relevant considerations in some contexts, they are not fundamental to the primary focus of the Terms of Sale/Contract, which is to establish clear responsibilities and payment methods.