IS a CIF contract simply a sale of documents?

Since the good can be paid for and sold on the strength of the documents, it is commonly said that a CIF
contract is nothing more than a sale of documents. Judicial support for this to be found in the statement
of Scrutton J in Arnhold karberg v Blythe, green, Jourdain and Co.22
.. the key to many of the difficulties arising in cif contracts is to keep firmly in mind the cardinal
distinction that a cif sale of goods but a sale of goods but a sale of documents relating to goods. It is not
a contract that goods shall arrive, but a contract to ship goods complying with the contract of sale to
obtain unless the contract otherwise provides, the ordinary contract of insurance of the goods on the
voyage, and to tender these documents against payment of the contract price. The buyer then has the
right to claim the fulfillment of the contract of carriage or, if the goods are lost or damaged, such
indemnity for the loss as he can claim under the terms of the contracts of insurance and affreightment
he buys no indemnity for the damage that has happened to the goals. This depends on what documents
he is entitled to under the contract of the good?.. but what at time of tender of the documents, was the
condition of those documents as to compliance with the contract of sale?

The above statement, however, was expressly rejected by Bankes and WarringtonL.JJ in the court of
appeal, who said that the correct description of a cif contract is that it is a contract for the sale of goods
to be performed by the delivery of documents. It may, however, be possible to find some support for
Scruttons Js statement that a CIF contract is nothing more than a sale of documents, since a number of
legal rights and liabilities attach to the documents. For instance, the buyers obligation to pay against the
tender of documents,23 and the right to reject a bad tender of documents and cannot be denied, it should
be emphasised that they assume their importance by virtue of the contract of sale. As stated by the
COURT of Appeal in Arnhold karberg,23 a CIF contract is a sale of goods that is performed by the
delivery if the documents.

The duality of obligation of a seller in CIF contact- namely obligation in respect if goods which are the
subject matter of the contract and tender of documents covering the goods-was reiterated in Hindley and
Co ltd.26. In this case, the seller sold to the buyers a cargo of jute in C&F terms. The seller bought goods
from a third party and tender the bill of landing (obtained from the third party) to the buyers. On arrival, it
was found That no good has been shipped. The seller submitted that they were not liable to the buyer,
since a contract of sale C&F and CIF terms was a sale of documents and performance took place with
delivery of goods. The bill of landing they had tendered appeared on the face of it to be regular and on
the face of it, to be regular, and on this they had also relied. Further, they did not ship the goods- they
were merely parties in a string of sales and were in no way connected to that event that led to the issue of
a bill of landing in the absence of goods on board the ship.
Kerr J, referring to passage in Arnhold karberg and Co v Blythe, Green, Jourdain and Co.27
Oversimplification to perceive a CIF contract as a sale of documents. It is instead a contract for the sale of
goods to be performed by the delivering of documents. He also could not see any grounds in the face of
clear statements found in cases as well as textbooks for distinguishing a seller who is the shipper from
one who is not. In the word of Kerr J:

....it follows from all the passage - and is indeed a matter of elementary law that a C&F or CIF contract is
to be performed by the tender of documents covering goods which have been shipped either by the seller
or by someone else in accordance with the terms of the contract. If no goods have in fact been shipped
the seller have now performed their obligation. I cannot see any basis for the distinction which the seller
who is not the shipper. At the date if contract it may well be unknown which means of performance the
particular seller will employ, and in an ordinary CIF or C&F contract, as in the present case, there will be
nothing in the contract which restrict his choice bet ewe the alternative method of performance.