"Incoterms" (international commercial terms) is a series of standard international terms that defines buyer and seller responsibilities in foreign trade contracts. The terms, compiled by The International Chamber of Commerce (ICC), aim to avoid misunderstanding and are principally used in agreements about the delivery of goods. Each Incoterm outlines who is responsible for transport, insurance, duties and clearance.
The thirteen separate Incoterms are split into
four distinct groups:
E - where the goods are made available to the buyer at the
F - where the seller must deliver the goods to a carrier
by the buyer;
C - where the seller must contract for the carriage of the
without assuming risk of loss of, or damage to the goods or
costs due to events occurring after shipment;
D - where the seller has to bear all costs and risks required
the goods to the place of destination.
Though Incoterms offer a
useful guide to responsibilities for the goods at each point of the
transport process, it is not possible for them to be fully comprehensive
due to variations decided by the custom of particular trades and/or
ports. Care should be taken when applying the rules to account for these
Traders wishing to use these rules should specify
that their contracts will be governed by the provisions of Incoterms
2000, clearly indicating any agreed variations thereto. Incoterms 2000
are available from local Chambers of Commerce or from the
Incoterms give no guidance for such variations.
There are no authoritative definitions of expressions and allocation of
costs for these terms differs from place to place. Where trade terms are
expanded, it is important to clarify in the contract to what extent each
party is responsible for carriage, risks and costs.