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ACCA Applied Skills · Corporate and Business Law (Global) · Introduction to the UN Convention on Contracts for the International Sale of Goods and ICC Incoterms

Orla Ltd (Ireland) sells goods to Mekong Trading (Vietnam) on DAP Ho Chi Minh City warehouse terms (Incoterms 2020). The goods arrive on the delivery truck at the warehouse gate. Which statement is correct?

Orla has delivered when the goods are ready for unloading on the arriving vehicle at the named place, and risk passes then. Under DAP, Mekong must unload and handle import clearance and duties; Orla bears the earlier transport risk and cost.

  1. ARisk passed to Mekong when the goods were handed to the first carrier in Ireland
  2. BOrla has delivered once the goods are placed at Mekong's disposal on the arriving vehicle, ready for unloading, and Mekong bears unloading and import clearanceCorrect
  3. COrla must unload the goods and pay import duties before delivery is complete

Explanation

Under DAP the seller delivers when the goods are placed at the buyer's disposal on the arriving means of transport, ready for unloading, at the named place. Risk passes then. Unloading and import clearance are the buyer's responsibility, in contrast to DPU and DDP respectively.

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