Kumar Corp. v. Nopal Lines, Ltd. 462 So. 2d 1178 (1985) District Court of Appeals of Florida, Third District BACKGROUND AND FACTS Kumar sold 700 television sets to one of its largest customers, Nava, in Venezuela. The contract was on CIF terms, Maracaibo. However, they agreed that Nava would not pay Kumar until Nava actually sold the merchandise. Kumar obtained the televisions from its supplier, received them in its Miami warehouse, loaded them on a trailer, delivered the trailer to its freight forwarder, Maduro, in Florida, and obtained the shipping documents. The trailer was stolen from the Maduro lot and found abandoned and empty. Kumar had failed to obtain marine insurance on the cargo. Kumar sued Maduro and the carrier. The defendants argued that, since the risk of loss had passed from Kumar to Nava, Kumar did not have standing to sue. The trial court agreed with the defendants and dismissed Kumars case. Kumar appealed. DANIEL S. PEARSON, JUDGE Kumars argument that it is the real party in interest proceeds . . . from the premise that its agreement to postpone Navas obligation to pay for the goods modified the ordinary consequence of the CIF contract that the risk of loss shifts to the buyer. A CIF contract is a recognized and established form of contract, the incidents of which are well known. Thus, if a buyer and seller adopt such a contract, they will be presumed, in the absence of any express term to the contrary, to have adopted all the normal incidents of that type of contract, D. M. Day, The Law of International Trade, 4 (1981), one of which is that the buyer, not the seller, bears the risk of loss when the goods are delivered to the carrier and the sellers other contractual obligations are fulfilled. A CIF contract 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 carriage to the place of destination, and the ordinary contract of insurance of the goods on that voyage, and to tender these documents against payment of the contract price. C. Schmitthoff, The Law and Practice of International Trade, 2627 (7th ed. 1980). It is clear, however, that parties may vary the terms of a CIF contract to meet their own requirements. But where the agreed-upon variation is such that it removes a vital ingredient of a CIF contract, then the contract ceases to be a CIF contract. Thus, if according to the intention of the parties the actual delivery of the goods [to the buyer] is an essential condition of performance, the contract is not a CIF contract. C. Schmitthoff, supra. In the present case, Kumar and Nava agreed to payment upon Navas sale of the goods in Venezuela . . . [thereby negating an essential ingredient of the CIF contract]. . . . [T]he use of the term CIF does not ipso facto make the contract a CIF contract if the contract has been altered in a manner that is repugnant to the very nature of a CIF contract. Therefore, because the record before us does not . . . conclusively show that the contract remained a true CIF contract despite the agreement between Kumar and Nava concerning the payment for the goods, it was improper for the trial court to conclude as a matter of law that the risk of loss passed to Nava when Kumar delivered the goods to the shipper. But even assuming, arguendo, that we were to conclude, as did the trial court, that the risk of loss passed to Nava merely by virtue of the label CIF on the contract, Kumar must still prevail. Under the CIF contract, Kumar was obliged to procure insurance, and by not doing so, acted, intentionally or unintentionally, as the insurer of the shipment. As the insurer of the shipment, Kumar was obliged to pay Nava, the risk bearer, for the loss when the goods were stolen. Being legally obliged to pay Navas loss, Kumar would thus be subrogated to Navas claims against the appellees. Since a subrogee is the real party in interest and may sue in its own name, Kumar would have standing to sue under this theory. Reversed and remanded for further proceedings. Decision. The court held that where, under a CIF contract, the seller fails to obtain marine cargo insurance on behalf of the buyer, the risk of loss remains with the seller, who becomes a self-insurer of the property. As such, the seller has standing to sue the carrier for the cargo loss.

Question: Briefing a case in 1). Heading 2). Statements of Facts 3). Procedural History 4). Legal Issues 5). Arguments of the Parties 6). Rule of Law 7). Holding 8). Reasoning of the court 9). Separate Opinions 10). Additional Comments