in February 2015 Castle Pty Ltd entered a contract to sell to Mariko Co "20,000 100 percent

Chromium carburettors CIF Yokohama for $210,000 net cash terms for June delivery." Castle

based its calculation of the sale price on a telephone quotation for insurance from Coverall

Insurance for $10,000. When Castle obtained the insurance policy in May 2015, the premium

had risen to $15,000 in line with general increases in the industry. Castle shipped the goods

from Sydney on SMS Olympic which sank one day after leaving Sydney. A week later Castle

presented proper shipping documents to Mariko together with an invoice for $215,000

including the additional insurance premium paid to Coverall. Mariko refused to accept the

documents or pay any of the contract price.

Required

: Advise Castle.

What difference would it make to your advice to Castle if the contract had provided:

(a) "20,000 100 Chromium carburettors FOB Olympic departing Sydney in June 2015 for

$200,000" and Castle had agreed to arrange insurance cover for the voyage; or

(b) "20,000 100 percent Chromium carburettors delivery per Olympic afloat DES

Yokohama for $210,000 net cash on arrival of Olympic with goods at Yokohama."