Free Carrier (Fca)

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LAW OF INTERNATIONAL TRADE

RESEARCH TOPIC: FCA INCOTERMS
BY MAGALA FRED
Incoterms are defined to mean internationally recognized rules defining the responsibilities of
sellers and buyers in international trade across national borders. These define and lay down the
different responsibilities such as, “who pays and manages the shipment, insurance,
documentation, customs clearance, and other logistical activities1”
International trade refers to the purchase and sale of goods and services by different companies
and persons across borders of different nations.2 International trade has existed since time
memorial and it has drastically advanced in its way of procedure. International trade can be
equated to the Tran Saharan trade, the long-distance trade as well as the Indian ocean trade. This
is because all the above included commercial transactions across borders.
Due to a number of issues that affected international trade immediately after World War one, it
created a vacuum for innovation of standard measures to govern international traders and
carriers. In order to handle such issues such as; transportation, trust and risk, distance as well
defining the responsibilities of different parties the international chamber of commerce was
formed in 1919.3
The international chamber of commerce immediately started on the task of standardizing
international trade terms and this was as early as 1921 when the first study was made. A number
of 13 countries were put under analysis and study as regards their trade terms. later on, there was
an advancement which now went as far as studying and analyzing trade terms and laws of over
30 countries. By 1936, the first incoterm version was released and all member states where to use
and adopt them while carrying on international transactions. The first three letter terms to first be
formulated included; FAS, FOB, C&F, CIF, Ex Ship and Ex Quay.4
Due to emergency of World War II, revision of international trade terms was not effective until
1953. However, as a standard these incoterms under go revision every after 10 years. This is
always done to enable incorporation of new policies dependent on the advancement in
technology as regards transmission of paperwork and transportation means. Therefore the
1
https://www.trade.gov/know-your-incoterm< Know Your Incoterm> accessed 5th.04.2023
2
International trade, benefits and crisitisms, By REEM HEAKAL
Updated March 20, 2023 >https://www.investopedia.com/insights/what-is-international-trade/
#:~:text=International%20trade%20is%20the%20purchase,sold%20in%20the%20international%20marketplace.
Accessed 5th.04.2023.
3
International chamber of commerce, our mission, history and valueshttps://iccwbo.org/about-icc-2/our-mission-
history-and-values/ accessed 6th.04.2023.
4
Historical Development of Incoterms, by Alan Jervis https://www.linkedin.com/pulse/historical-development-
incoterms-alan-jervis accessed 5th.04.2023.
Magalafred@gmail.com
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various revisions have always been made to add in different means of transportation such as
“ containerization”.
The two recent incoterms version are incoterm versions 2010 and the most recent one incoterm
version 2020. Part of the recent amendments in incoterms 2020 is that the buyer or seller as now
allowed to use their own means of transport if they do have. This was not allowed in the 2010
version since shipping would only be done by their party.5
FCA (FREE CARRIER) INCOTERM.
FCA MEANING;
Free carrier incoterm is one of the many international trade terms that were formalized by the
international chamber of commerce in 1936. Therefore “free carrier (FCA) is defined to mean
“international trade terms where the seller has got the obligation of delivering the goods
ordered by the buyer at the named place to be transferred to the carrier arranged by the
buyer”. Therefore, free under free carrier the seller is obliged to deliver the goods at any place
the buyer has nominated.
The destination at which the goods have to be delivered is known as “the named place” this can
be an airport, a shipping terminal, a container terminal, the seller’s warehouse, or any location in
the seller’s country specified by the buyer.
The named place can be the seller’s premises and where it’s the ware house of the seller then
delivery shall be said to be complete when the goods are loaded on the carrier by the seller.6
FCA is used more in international shipments and works for multiple modes of transport such as
water, air and railway. this can be used in LCL (less than container load), FCL (full container
load), and air when shipping freight.
PARTIES INVOLVED IN FREE CARRIER
1)- THE SELLER
The seller is as well known as the exporter. The seller in an FCA international contract of sale is
that person who has been contacted to supply the goods to the buyer from the exporting country.
This can be a sole trader or a company.
2)- THE BUYER
The buyer is as well-known as the importer. the buyer comes from a different country and
contacts the seller to supply him/ her with a number of goods. Therefore, the buyer is expected to
order and pay for the goods on delivery to any nominated place under an FCA international
contract of sale.
3)-THE CARRIER.
5
Ibid.
6
Understanding the Free Carrier (FCA) Incoterm, by Sam Franklin | June 16,
2022https://www.letsbloom.com/blog/incoterm-fca/ ACCESSED 5TH.04.2023.
3|Page
The carrier refers to the party responsible for transporting the goods from the nominated place by
the buyer or from the seller’s premises to the final destination of delivery. Therefore, the moment
goods get onto the carriers assumes the duty to handle them with outmost skill and care to avoid
damaging them, when the goods are damaged due to the carrier’s negligence then the carrier is
meant to compensate the buyer as held in Interfreight Forwarders(U) Limited v EastAfrican
Development Bank ((Civil Appeal No.33 Of 1992)) [1993] UGSC 16 (2 July 1993)7
SELLER’S RESPONSIBILITIES UNDER FCA.

In the FCA Incoterm, a seller is responsible for:
Delivering goods safely at the agreed-upon date and point. This is because the buyer would
have already named the place of delivery. Therefore, failure to deliver the goods at the nominated
place on time is a breach and can necessitate the buyer to seek for damages or even repudiate the
contract.8 Subject to article 30 and 31 of the United Nations Convention on Contracts for the
International Sale of Goods, the seller is meant to deliver the goods to the nominated place of
the buyer.9
The seller is as well tasked with the responsibility of procuring various documentations such as
creating a sales contract, receipt and commercial invoice. This is provided for under article 34
of the United Nations convention on international sale of goods; “If the seller is bound to
hand over documents relating to the goods, he must hand them over at the time and place and in
the form required by the contract. If the seller has handed over documents before that time, he
may, up to that time, cure any lack of conformity in the documents, if the exercise of this right
does not cause the buyer unreasonable inconvenience or unreasonable expense. However, the
buyer retains any right to claim damages as provided for in this Convention.”
The sales contract will lay down the different conditions as regards payment mode and terms
adopted. The receipt shall be a document acknowledging payment of the goods by the buyer. The
invoice as well shall help the buyer in ascertainment of goods loaded as to whether they fit the
order placed by the buyer.
Under article 41 of the United Nations convention on international sale of goods its clearly
stated that it’s the duty of the seller to deliver goods which are free from any right or claim of
a third party, unless the buyer agreed to take the goods subject to that right or claim. However,
if such right or claim is based on industrial property or other intellectual property, the seller’s
obligation is governed by article 42.10
7
Interfreight Forwarders(U) Limited v EastAfrican Development Bank ((Civil Appeal No.33 Of 1992) ) [1993] UGSC
16 (2 July 1993)< https://old.ulii.org/ug/judgment/supreme-court/1993/16> ACCESSED 5TH.04.2023
8
Understanding Free Carrier (FCA) Shipping Terms, by By WILL KENTON
Updated September 08, 2022< https://www.investopedia.com/terms/f/fca.asp> accessed 05th.04.2023.
9
Article 30,31, United Nations Convention on Contracts for the International Sale of Goods<
https://uncitral.un.org/sites/uncitral.un.org/files/media-documents/uncitral/en/19-09951_e_ebook.pdf> accessed
05.04.2023.
10
Article 41 , United Nations Convention on Contracts for the International Sale of Goods<
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The seller as well is tasked with the duty of packaging. Where in their contract a given form of
packaging was agreed upon then the seller shouldn’t divert from the same. Where the packaging
was not agreed upon, then a reasonable package should be used depending on the nature of the
good to prevent their damage.
Article 35 of the United Nations convention on international contracts of sale of goods is
instructive to the fact that it’s the duty of the seller to deliver goods that fit the description
made by the seller. Therefore, goods should match the exact quality, quantity, color and weight.
Where the seller delivers any goods that are not in conformity with the order made by the buyer
it shall amount a breach remedied by either repudiation or payment of damages. Goods are said
to be in conformity with the order placed by the seller if only;
“(a)They are fit for the purposes for which goods of the same description
would ordinarily be used
(b) are fit for any particular purpose expressly or impliedly made known to the seller at the time
of the conclusion of the contract, except were the circumstances show that the buyer did not rely,
or that it was unreasonable for him to rely, on the seller’s skill and judgement;
(c) possess the qualities of goods which the seller has held out to the buyer as a sample or model;
(d) are contained or packaged in the manner usual for such goods or, where there is no such
manner, in a manner adequate to preserve and protect the goods.”11
The seller as well responsible for payment of the Loading charges unto the vessel procured by
the buyer to carry the goods from his premises. Where any damages occur during the loading,
then that is suffered by the seller. Therefore, where the goods are being loaded the seller should
be extra sensitive to prevent any form of damage.
The seller should as well help the buyer with the different Export formalities such as duty, taxes,
and customs clearance. This is because the buyer is taken to be less knowledgeable about the
export countries’ rules and procedures.
REMEDIES OF THE BUYER INCASE THE SELLER HAS BREACHED ANY OF HIS
DUTIES;
Delivery of substitute goods and Repair.
Under article 46 of the United Nations convention on contracts of international sale of goods,
the seller is bound to deliver substitute goods incase the ones delivered never matched the
description made by the buyer. As well where some goods are damaged on delivery which is
05.04.2023.
11
Article 35(2)(a,b,c,d), united nations convention on contracts of international sale of goods<
6th.04.2023.
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ascertained to have occurred during loading, then the seller is compelled to repair them as a
remedy to the buyer.12
Additional time to specifically perform.
Subject to article 47 of the United Nations convention on contracts of international sale of
goods, the buyer can as well add more reasonable time to the seller to so perform his duty. This is
done on notice where the seller writes to the buyer requesting for some additional time to
perform.13
The buyer can as well declare the contract void.

subject to article 49 of the United Nations convention on contracts of international sale of
goods, the buyer may declare the contract void as a remedy where;
“(a) if the failure by the seller to perform any of his obligations under the contract or this
Convention amounts to a fundamental breach of contract; or
(b) in case of non-delivery, if the seller does not deliver the goods within the additional period of
time fixed by the buyer in accordance with paragraph (1) of article 47 or declares that he will not
deliver within the period so fixed.”
However, where delivery has been made then the buyer losses the right to declare the contract
void unless there has been late delivery which is unreasonable.14
goods, where the goods delivered don’t conform with order made by the buyer, the buyer has a
right to reduce the purchase price whether paid or not to fit the actual values of the goods
delivered. As well where the goods delivered are partly not in line with order made, the buyer
can do only part payment or even reduce the contractual price of those that don’t match the
description to their actual price.15
12
Article 46, united nations convention on contracts of international sale of goods<
6th.04.2023.
13
6th.04.2023.
14
6th.04.2023.
15
6th.04.2023.
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goods, where the goods are delivered before the set date, the buyer can accept the delivery or
refuse to take delivery till the set date.16
Where the goods delivered are in excess compared to the order made, the buyer can accept or
refuse to take delivery of such goods. Where he accepts the goods, he is then bound to pay for
the excesses as laid down in article 52(2) of the United Nations convention on contracts of
international sale of goods, where the goods.17
BUYER’S RESPONSIBILITIES UNDER FCA
In FCA, a buyer is responsible for:
Paying for the goods as dictated in the contract of sale. The buyer is bound to pay the
contractual price the moment the property in the goods have passed to him and has taken
delivery of the goods. This is provided for under article 53 of the United Nations Convention on
Contracts for the International Sale of Goods. Where the prices are fixed by the contract then the
payment should be as stated. Where the price is not expressly provided then then the current
market value is considered. Subject to article 56, where the price is determinate on the weight,
incase of any doubt the measurements should be done.18
The payment should be done on the specified date and time which was agreed upon by the
party’s failure to do so would amount to a breach as laid down in article 59 of the United
Nations convention on contracts of international sale of goods.19
Subject to article 60, it’s the buyer’s duty to take delivery of the goods and where he so refuses
yet all conditions have been meant then it would amount to a breach.
The buyer as well pays for the Pre-shipment inspection costs under FCA. This is always done in
the export country to verify whether the goods match the standards of export set by the seller’s
country.
The buyer as well is tasked with Arranging carriage. That is to say under FCA the buyer shall
nominate the place where the goods are to be delivered and its from there that the goods are
picked by the buyer to the arranged means of carriage. Therefore, under FCA the buyer is part of
the carriage contract whereas the seller isn’t.20
16
6th.04.2023.
17
Article 53, 56, united nations convention on contracts of international sale of goods<
https://uncitral.un.org/sites/uncitral.un.org/files/media-documents/uncitral/en/19-09951_e_ebook.pdf>
accessed 6th.04.2023.
18
Article 52(2), united nations convention on contracts of international sale of goods<
6th.04.2023.
19
Article 59 , united nations convention on contracts of international sale of goods<
6th.04.2023.
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The buyer is also meant to cater for the costs of Loading the goods on the carriage. Since the risk
and property always passes after the goods are delivered at the place nominated by the seller
unloaded. The buyer caters for the unloading costs as well as loading costs unto the carrier.
Since it’s the buyer who nominated the carrier, he is a well responsible for the payment of the
Freight costs. Therefore, the buyer shall have to cater for the transportation costs.21
The buyer as well is responsible for payment of Destination port terminal charges. This is
because the property in the goods would have already passed unto him at the time of delivery of
the goods at any place named by the buyer.22
The buyer as well caters for the Unloading costs at the final destination. This means it’s the
duty of the buyer to pay all those that will unload the goods from the carriage to his or her
warehouse since the property in the goods would have already been vested into him.
The buyer as well pays for Import duty and taxes in the country of delivery. This duty is vested
in the buyer since under FCA the roles of the seller stop at the time the property in the goods is
transferred to the buyer.23
It’s the duty of the buyer as well to pay for insurance since the property in the goods would
have already transferred to him or her at the time of delivery of the goods at the place, he / she
nominated. Therefore, since he is the one to suffer loss incase of any damage during carriage, he
ought to procure insurance to protect his goods against any loss.
REMEDIES TO THE SELLER IN CASE THE BUYER BREACHES THEIR DUTY.
Subject to article 63 United Nations Convention on Contracts for the International Sale of Goods,
the seller can give additional time to the buyer so as to specifically perform his or her duties
such as payment. This done on notice by the buyer that he will be unable to pay or perform and
seeks for some additional time. During this recess the seller cannot claim any remedies.24
The seller can as well declare the contract void as laid down in article 64 United Nations
Convention on Contracts for the International Sale of Goods where there is breach of a major
term of the contract. (1) The seller may declare the contract avoided such as;
“(a) if the failure by the buyer to perform any of his obligations under the contract or this
Convention amounts to a fundamental breach of contract;
or
20
Understanding the Free Carrier (FCA) Incoterm, by by Sam Franklin | June 16, 2022,<
https://www.letsbloom.com/blog/incoterm-fca/> accesed 5th.04.2023
21
Understanding the Free Carrier (FCA) Incoterm, by by Sam Franklin | June 16, 2022,<
https://www.letsbloom.com/blog/incoterm-fca/> accesed 5th.04.2023
22
ibid
23
ibid
24
6th.04.2023
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(b) if the buyer does not, within the additional period of time fixed by the seller in accordance
with paragraph (1) of article 63 of the United Nations Convention on Contracts for the
International Sale of Goods, perform his obligation to pay the price or take delivery of the
goods, or if he declares that he will not do so within the period so fixed.”
Where the buyer fails to make specifications as regards the good after various notifications. then
the seller depending on the past dealings with the buyer can make such specifications or
measurements by himself as laid down in article 65 of the United Nations Convention on
Contracts for the International Sale of Goods25
TRANSFER / PASSING OF RISK AND PROPERTY UNDER FCA

Article 67 of the United Nations convention on contracts of international sale of goods clearly
states that “If the contract of sale involves carriage of the goods and the seller is not bound
to hand them over at a particular place, the risk passes to the buyer when the goods are
handed over to the first carrier for transmission to the buyer in accordance with the
contract of sale. If the seller is bound to hand the goods over to a carrier at a particular
place, the risk does not pass to the buyer until the goods are handed over to the carrier at
that place.” Therefore, transfer of risk property in the good is always dependent on the agreed
terms and the general rule is the “risk passes with the property.”26
Under FCA, the transfer of risk occurs when the seller delivers goods to the carrier nominated
by the buyer at the named place - whether it be a port, the forwarder’s warehouse, or the
seller’s premises. Delivery and transfer of risk takes place when the truck or other vehicle arrives
at this place, ready for unloading27
At that point, the title transfers to the buyer, and the goods become an asset on the buyer’s
balance sheet.
DOCUMENTS USED IN FCA.
Export license. This is acquired from the seller’s country which is granted after inspection
when the goods are inspected to ascertain whether they are fit for export and after paying a
statutory fee.
Invoice. this is procured by the seller to help the buyer ascertain the goods as to whether they
match the description as described in his order.
25
6th.04.2023
26
6th.04.2023
27
Free Carrier (FCA),< https://www.incotermsexplained.com/the-incoterms-rules/the-eleven-rules-in-brief/free-
carrier/#:~:text=Free%20Carrier%20(FCA)&text=Delivery%20and%20transfer%20of%20risk,delivery%20to%20the
%20first%20carrier.)> accessed 07.04.2023
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Insurance certificate. This is always acquired by the buyer so as to protect his goods from
damage incase of any accident during carriage.
Carriage contract. This is an agreement between the shipper and the buyer laying down the
terms and conditions as regards the shipping of the goods.
Payment receipt. This is issued by the seller to the buyer as acknowledgement for having paid
for the goods which he ordered for. Therefore, it gives the buyer a sense of ownership.
Inconclusion we ought to authoritatively agree that, Under FCA shipping terms, the seller is
responsible for pre-carriage to a terminal, delivery to the agreed upon destination, and proof
of delivery. The seller is also responsible for export packaging, licenses, and customs
formalities. On the other hand, under FCA shipments, the buyer pays for the goods, is
responsible for the main means of transportation, and pays for loading charges. The buyer
also covers import duties, taxes, and formalities. As well its no debate that FCA is the best
mode for containerized goods.28
Obligations of parties summarized
seller Buyer
Manage commercial invoices and Pay for the order as per the sales contract.
documentation.
Load cargo into the buyer’s transport if the Unload the cargo if the goods are sent by the
seller is meant to only deliver the goods to seller to a named location, other than the
one of their own premises seller’s premises.
Pay the cost of pre-shipment checks. Pay the post-carriage shipping.
Package and ready the order for shipping to Pay for the shipping insurance.
the buyer.
Manage export license and export formalities. Manage and pay for the main carriage.
Manage pre-carriage of the goods to the Manage import formalities.
named place of delivery.
Offer proof of delivery. Pay for the pre-shipment inspection for
28
Understanding Free Carrier (FCA) Shipping Terms, by WILL
KENTON,<https://www.investopedia.com/terms/f/fca.asp> accessed 05th.04.2023.
Updated September 08, 2022
10 | P a g e
import clearance.
Pay the loading charges.29
29
Free Carrier (FCA) – Shipping Incoterms® 2020 Explained, by By Kristina Lopienski October 13, 2022<
https://www.shipbob.com/blog/free-carrier-fca/> accesed 9th.04.2023

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LAW OF INTERNATIONAL TRADE

SELLER’S RESPONSIBILITIES UNDER FCA.

The buyer can as well declare the contract void.

Subject to article 52 of the United Nations convention on contracts of international sale of

TRANSFER / PASSING OF RISK AND PROPERTY UNDER FCA

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