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Case 7.1 Incoterms (CIF) A contract of sale was ent between an American company, BAT Inc., of Calu- met City, Ilinois (buyer), and a German

Case 7.1 Incoterms (CIF) A contract of sale was ent between an American company, BAT Inc., of Calu- met City, Ilinois (buyer), and a German scientific equipment manufacturing firm, Tola (seller), for the sale of a mobile MRI machine. Tola (the German corporation) sent the requested MRI machine, in good working condition, to the buyer aboarcd the ship, Superior Carrier. However, when it reached its final destination, it had been damaged and was in need of extensive repair. The buyer and its insurance company believe that the MRI machine was damaged in transit. BAT's insurance comp any, St. Guardian Insurance, covered the cost of the damage, which was $350,000. In turn, the insurance company intends to recover from Tola. However Tola claims that, since the goods were shipped under CIF (New York) term, it is under no obligation for the loss and that its contractual obligation with regard to risk of loss ended when it delivered the machine to the vessel at the port of ship- ment. The buyer's insurance company contends that Incoterms were inapplicable since they were not specifically incorporated into the contract. They also argue that the seller's explicit retention of title modified the risk of loss. Question 1. Do you agree with BAT and Guardian Insurance? Why or why not?

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To determine whether BAT Inc and Guardian Insurance have a valid claim against Tola we need to analyze the relevant aspects of the contract the CIF Incoterm and the arguments presented by both parties ... blur-text-image
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