Comparative Study of Seller and Buyer Obligations in FOB and CIF Terms: An Examination of Iraqi and Iranian Law

Abstract

This descriptive-analytical study adopts a comparative approach to examine the civil and commercial laws of Iran and Iraq, as well as international trade practices. In FOB contracts, the seller is obligated to deliver the goods on board the ship, while the buyer is responsible for chartering the vessel and paying the shipping costs. In CIF contracts, the seller, in addition to delivering the goods, is also obligated to enter into a contract for the carriage and insurance of the goods. In both types of contracts, the buyer is obligated to pay the price and take delivery of the goods. The laws of Iran and Iraq have many similarities regarding the parties' obligations in these contracts. However, the Iraqi Commercial Law provides more details on these obligations. Despite the similarities in the laws of the two countries, there are differences in the details and implementation of the obligations. In cases where the contract or law is silent, international commercial customs will govern. The results indicate that the definition of delivery of goods in Iranian law does not fully correspond to the FOB concept, as it places greater emphasis on physical possession of the goods. In contrast, Iraqi regulations are more in line with FOB standards. In the context of cargo insurance under CIF terms, while both countries comply with CIF requirements, Iraq has set more detailed requirements for the amount of insurance, which may lead to more complexities. Regarding packaging, Iraqi laws cover this topic more precisely, while Iranian regulations need amendments to better align with international standards. This comparative study can contribute to a better understanding of the parties' obligations in international trade contracts and reduce potential disputes.