Transaction Frameworks
A high-level overview of delivery, inspection, documentary and payment structures.
Delivery structures
The appropriate Incoterm depends on the parties’ capability, logistics arrangements, destination and risk allocation. The contract—not informal procedure wording—governs the transaction.
CIF / CFR
The seller contracts carriage to the named destination under the applicable Incoterm. Insurance obligations differ between CIF and CFR.
FOB
The buyer generally nominates the vessel and takes responsibility according to the agreed FOB terms and loading-port requirements.
Other structures
DAP, storage-linked or other frameworks may be considered where the operational and contractual basis is suitable.
Core execution components
| Area | Commercial focus |
|---|---|
| Contract | Product, quantity, specification, price basis, Incoterm, title, risk and remedies. |
| Inspection | Recognised independent inspection at the agreed point for quality and quantity. |
| Shipping | Vessel nomination, terminal compatibility, loading or discharge documentation and scheduling. |
| Payment | Documentary credit, bank transfer, escrow or another agreed bankable mechanism. |
| Documents | Commercial invoice, transport documents, inspection certificates, origin and other contractually required documents. |
Payment terms must be agreed before instrument issuance
Letters of credit and other bank instruments are effective only when their wording, documentary conditions, timing and bank acceptability align with the underlying contract.
- Issuing and advising bank acceptability
- Sight or deferred payment terms
- Transferability only where expressly agreed
- Document presentation requirements
- Confirmation requirements, where applicable
- Amendment process for non-compliant terms