Incoterms® 2010 Rules—CFR Cost and freight

The following Commercial practice note provides comprehensive and up to date legal information covering:

  • Incoterms® 2010 Rules—CFR Cost and freight
  • Guidance note
  • The seller’s and buyer’s obligations

Incoterms® 2010 Rules—CFR Cost and freight

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Incoterms® 2010 rules were replaced by Incoterms® 2020 rules with effect from 1 January 2020. For the CFR Incoterm applicable from 1 January 2020, see Practice Note: Incoterms® 2020 Rules—CFR Cost and freight.

CFR (insert named port of destination) Incoterms® 2010

Guidance note

This rule is to be used only for sea or inland waterway transport. ‘Cost and Freight’ means that the seller delivers the goods on board the vessel or procures the goods already so delivered. The risk of loss of or damage to the goods passes when the goods are on board the vessel. The seller must contract for and pay the costs and freight necessary to bring the goods to the named port of destination.

When CPT, CIP, CFR or CIF are used, the seller fulfils its obligation to deliver when it hands the goods over to the carrier in the manner specified in the chosen rule and not when the goods reach the place of destination.

This rule has two critical points, because risk passes and costs are transferred at different places.

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