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ACCA Applied Skills · Corporate and Business Law (Global) · Transportation documents and means of payment

Hadley Co in Country A sells goods to Vosk Ltd in Country B on DAP Vosk's warehouse terms (Incoterms 2020). Which statement about the parties' obligations is correct?

Under DAP, Hadley bears risk until the goods arrive at the named place on the transport vehicle, ready for unloading, and are placed at Vosk's disposal. Vosk then bears unloading and import clearance, because the seller taking on import formalities and duties is DDP.

  1. AHadley bears risk until the goods are placed at Vosk's disposal on the arriving vehicle ready for unloading, and Vosk handles import clearanceCorrect
  2. BHadley bears risk until the goods are unloaded, and Hadley handles import clearance
  3. CVosk bears risk from when the goods are handed to the first carrier, and Hadley handles import clearance
  4. DHadley bears risk only until the goods leave Country A, and Vosk handles import clearance

Explanation

Under DAP the seller delivers when goods are placed at the buyer's disposal on the arriving means of transport, ready for unloading, at the named place. The seller bears risk to that point. Import clearance and duties are the buyer's under DAP; the seller handling import clearance is DDP. Unloading costs fall on the buyer.

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