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

Lumen Ltd sells a consignment to Teska Co on FCA Lumen's premises terms (Incoterms 2020). Teska's carrier collects the goods, and Lumen's staff must load them onto the carrier's truck. Later, the goods are damaged in transit. Which statement is correct?

Under FCA at the seller's premises, delivery and risk transfer occur when Lumen loads the goods onto Teska's collecting vehicle. Because that loading has been completed, damage in transit falls on Teska, whereas bearing risk until arrival would be a delivered term like DAP.

  1. ALumen delivers once the goods are loaded onto Teska's collecting vehicle, and risk passes to Teska at that pointCorrect
  2. BLumen delivers only when the goods reach Teska's premises, so Lumen bears the transit damage
  3. CLumen delivers when the goods are ready for collection but unloaded, and the risk passes on signing the contract
  4. DLumen delivers once the goods are loaded onto the ship at the destination port

Explanation

Under FCA at the seller's premises the seller delivers once the goods are loaded on the buyer's collecting transport, and risk passes then. The seller is responsible for loading at its own premises. Delivery on arrival at the buyer's premises describes DAP. Transit damage therefore falls on Teska.

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