Sunday, 17 July 2022

Ex-ship contract.

                                          Ex-Ship Contracts 

Ex-ship contracts means without shipment costs to the consignee until receipt overside of the shipment at destination, the consignee being required to accept delivery at the ship's side and assume all subsequent liability. I.e the seller has to delivery the goods to the buyer at the port of destination. In such contracts the property in the goods does not pass until actual delivery. The goods are at the seller's risk during the voyage. It is  therefore, for the seller to insure the goods to protect his interest. The seller is to pay the freight, or otherwise release the ship owner's lien and to furnish the buyer with a delivery order or an effectual direction to the ship owner to deliver.

    In this case ex-ship, the seller has to cause delivery to be made by the buyer from a ship which has arrived at the port of delivery, and has reached the usual place of delivery therein for the discharged pf the goods of the kind in question.

      Here the seller saves costs on shipping and customs, along with liability for damaged goods after being delivered, packaged, and labeled at the shipping terminal.

Example of Ex-ship contract- Seller X ships contracted goods to a pier and port in Kennebunkport, Maine. Midway there, the ship encounters a storm and sinks. Seller X absorbs the loss because the shipment has not yet arrived in port.


Duties of seller include:

1. deliver goods to the buyer after the arrival of the ship at the port of delivery at a place where such goods are usually delivered. 

2. to pay the freight, or otherwise to release the shipowners lien.

 3. to furnish the buyer effective delivery order.

Duty of buyer includes:

1. Here buyer is not bound to pay the price of the goods until the seller has done his part.

     The goods are at the sellers risk to the voyage. The seller is not bound to ensure the goods on the buyers behalf. The parties may however vary the conditions of the above shipping contract by express terms. The liability Under an ex ship can be the risk of loss passes to the buyer once the goods leave the ship. It is not always possible to save cost on shipping and customs along with liability of goods, due to customs requirements in certain jurisdictions.

       There is also delivery Ex-ship contract which is an outdated incoterms rule which has been replaced by DAP and DAT. DES means a seller has fulfilled a delivery agreement when the goods are delivered to the port specified by a buyer. The seller only bears the risks and costs related to the delivery from the point of origin to the named port.

     When the goods arrive at the buyer’s named port, the risks and costs are shifted to him. At that time forward, the buyer pays for all custom duties and is responsible for clearing the goods.

        Lastly Seller fulfills the Contract obligations  when the goods have been made available to the buyer on board a ship at the named port of destination. The seller must bear all costs and risks associated in bringing the goods to the named port of destination. The buyer is responsible for all costs necessary to unload the goods and clear them through customs. Unloading costs are included the ocean freight charged by most ship lines. The DES is most often used for charter shipments.



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