International coffee transactions are executed by
transfer of title rather than by the physical handing over of coffee. Title to
goods shipped under contract by sea from one country to another is represented
by the bill of lading, accompanied by a set of additional documents, together
known as the shipping documents. The document of title for goods already stored
in the port or place of delivery under a spot contract can be a warehouse
receipt or storage warrant issued by a recognized public warehouseman. The only
difference between the traditional chain of paper documents and electronic documentation is that the paper is
largely eliminated. This is why electronic documentation is sometimes also
called paperless trading. Using electronic documentation does not change the
contractual responsibility of the seller or the buyer: the only differences are
in how and when documents are issued, and how and when they are made available
to the buyer.
Shipping
documents must always comply in all respects with the conditions of the contract
between the parties. If they do not, a seller may not be paid on time, or, in
extreme circumstances, may lose the money altogether. The shipping documents
must therefore show or state (i) that they represent the contracted and shipped
coffee, (ii) that a known series of shipping rules has been complied with, and
(iii) that they conform in all respects to the sales contract between the
parties and to the standard form of contract on which that sales contract is
based. Shipping documents must also be presented on time. Nothing is more
annoying than late documents.