Sale contracts with the Incoterm DAP

In view of several cases managed by our law firm in which the use of the international commercial term DAP (Delivered At Place) has been of special relevance, in this article we will try to shed light on its origin and application.

As a global business organization, the International Chamber of Commerce (ICC) intends to provide the necessary practical tools to activate and simplify world trade through the use of standard terms that allow defining the rights and obligations assumed by of the parties to a sales contract, including those referring to the transportation of the goods from origin to destination. Incoterms or International Commercial Terms affect some relevant aspects of the commercial relation (sales contract) between seller and buyer, but they do not delimit the entire contents of said contract.

European and Spanish courts, to a greater extent the Spanish mercantile courts specialized in transport law, have been aware of the reality of the Incoterms and this is reflected in many resolutions. An example of this is the Judgment of the Court of Justice (EU) C-87/2010 of June 9, 2011, when it states: “In order to check whether the place of delivery is determined ‘according to the contract’, the national jurisdictional body that has knowledge of the matter must take into account all the terms and all the relevant clauses of said contract that clearly designate said place, including the terms and clauses generally recognized and enshrined by international commercial uses, such as Incoterms elaborated by the International Chamber of Commerce.”

DAP is one of the last terms incorporated in the publication “Incoterms 2010” issued by the ICC and, together with the term DAT, it replaces the previous DAF, DEQ, DDU and DES in order to adjust adequately to the current logistic reality. Consequently, as of 1st of January of 2011, date of entry into force of the aforementioned publication, the ICC reduced the Incoterms in use to eleven.

When the parties of a sales contract arrange the inclusion of the term DAP, they essentially agree, among other rights and obligations, that the seller-exporter will comply with its obligations by making available the cargo to the buyer-importer ready for unloading in the used means of transport  at the destination agreed in the contract; the buyer shall therefore be responsible for all expenses associated with the unloading of the merchandise from the means of transport used until destination, as well as for its clearance for importation. Since the seller will assume the organization and materialization of the transport to the place of destination agreed in the contract, he should make sure that this concrete place is duly specified in the sales contract since he runs with the risks of the cargo up to that point. Therefore, buying under DAP conditions will imply a lower risk for the buyer.

The DAP Incoterm is a multimodal term, which means that it can be used regardless of the means of transport used; therefore, its use is justified whether the goods are transported by road, sea, rail or air.

The knowledge and proper use of the terms of international trade is an indispensable part in international sales contracts and increasingly in those of national scope, since their national use has been extended for the benefit of transactions. It is a reality that has been gaining strength since the entry into force of the “Incoterms 2010”.

In short, receiving adequate advice at the time of closing and drafting sale contracts in relation to the Incoterms that best suit the needs of the parties, as well as in relation to the other relevant aspects to be agreed, is essential to protect the position of our clients and achieve the good end of any commercial transaction.

Judgment C-88/17 of 11 July 2018 of the CJEU

Judgment C-88/17 of 11 July 2018 of the CJEU has confirmed that in a transport contract that has several stages and that is carried out by a number of means of transport, both the place of origin and the place of delivery of the goods constitute places where the transport services are provided ensuring a close link between the contract of carriage and the court having jurisdiction. Consequently, and pursuant to Article 5.1.b) of Regulation No. 44/2001, in force at the time of the facts, the plaintiff may choose to place the claim by reason of said contract in one or another jurisdiction.

 

This decision follows the same line of interpretation as judgment C-204/08 of 9 July 2009 (Rehder) issued in the framework of an air transport contract.

Inspection of cargo securing on trucks, clarification by Directorate General of Traffic (DGT)

 

On 17th April 2018, we published a post about the entry into force of the Royal Decree no. 563/2017 related to the technical roadside inspections of the roadworthiness of commercial vehicles circulating in Spain. This article supplemented the previous post published on 13 June 2017 “Royal Decree n. 563/2017 of June 2nd 2017, “Technical Inspection of Commercial Vehicles”. Read more

Royal Decree 563/2017 on Technical Inspection of commercial vehicles, in force on May 20th 2018

In accordance with the publication in our Blog on June 13th 2017, article: “Royal Decree nº 563/2017 of June 2nd 2017 – Technical Inspection of Commercial Vehicles, the mentioned Royal Decree will come into force on 20th of May 2018.
The Royal Decree (R.D.) nº 563/2017 incorporates into Spanish law the Directive 2014/47/EU of April 3rd 2014 on technical roadside inspection of commercial vehicles circulating in the EU, whose entry into force suspends the R.D. 957/2002, of September 13th, which regulates the technical roadside inspections of commercial vehicles that circulate on the Spanish territory, and the Order INT/316/2003 of February 13th on technical inspections of commercial vehicles.

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The validity of insurance clauses in case of failure to supervise the truck during transportation

In a judgment (number 590/2017) dated 7th November 2017, the Spanish Supreme Court has had the opportunity to clarify conflicting case law from different Courts of Appeals regarding the requirements for the validity of insurance clauses that exclude coverage in cargo theft matters when there has been a failure to keep a proper supervision of the truck or container during transportation.

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Royal Decree nº 563/2017 of June 2nd 2017 – Technical Inspection of Commercial Vehicles

In May 2014, the Directive 2014/47/EU of the European Parliament and the Council, of April 3rd 2014, on the technical roadside inspection of the roadworthiness of commercial vehicles circulating in the EU came into force. This Directive updates the regulation of the technical roadside inspections by establishing the minimal requirements for all Member States, in order to improve road safety conditions. The contents of the aforementioned Directive have been incorporated into the Spanish legislation the recently enacted by Royal Decree nº 563/2017 of June 2nd

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Breaking the limitation in transport matters, once again

20161027_121043Article 1911 of the Spanish Civil Code establishes the general principle that debtors will be held accountable for their liabilities with all their present and future assets. Limitation of liability is an exceptional figure under Spanish law. For this reason, Spanish Courts are always reluctant to accept the limitation of liability principles established in international conventions in matters of transport and seek a way to avoid such limitation of liability. Read more

Elements to be analyzed in cargo theft

Among the different analyzed factors, a key element is to choose an adequate and safe resting area. And this is because the rest time during the carriage implies leaving the truck and the cargo unattended directly by the carrier. Consequently, the insurance companies and jurisprudence analyze the following basic points in order to determine whether the effective carrier took the necessary measures to prevent and avert any theft or robbery, taking into consideration the chosen resting area: Read more

Carrier’s liability in cargo theft

Although unwanted, it is an every-day fact to receive news from carriers who suffered theft or robbery while having the truck fully loaded with goods and in transit according to the agreed contract of carriage.   In fact, there are geographical areas which are particularly problematic in this regard on both levels, national and international. The liability system for road carriers is the same in international carriage (CMR Convention, arts. 17-29) as in national carriage in Spain (Law 15/2009 from 9th of November – LCT, arts. 46-63). The carrier is not only accountable for damages or late delivery of the entrusted cargo but also for losses caused by a robbery or any other reason. Read more

Aiyon Abogados in the ‘Forum for the development of logistic infrastructure, growth and employment in Andalusia’

foro-desarrollo-infraestructura-andalucia-transporteOn June 2, 2016, the Andalusian Council of Chambers of Commerce held the ‘Forum for the development of logistic infrastructure, growth and employment in Andalusia’ in Antequera (Malaga/Spain). The main companies of the Andalusian transport sector and our colleagues of AIYON ABOGADOS SLP, Enrique Ortiz and Jose Dominguez, experts in the areas of Shipping Law, Transport Law, International Trade Law and Insurance Law, attended the event.

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