Incoterms are only part of the contract for sale. However, they are an integral part of the international transaction. Incoterms deal with the questions related to the delivery of the products from the seller to the buyer. This includes the carriage of products, export and import clearance responsibilities, who pays for what, and who has risk for the condition of the products at different locations within the transport process. Incoterms are always used with a geographical location and do not deal with transfer of title.
Brief Descriptions of Incoterms
Incoterms are standardized definitions of commonly used shipping and trade terms that cover issues such as control of goods and financial responsibilities such as payment of cargo insurance and freight. Incoterms provide traders with a common set of rules outlining each party’s obligations, thus reducing misunderstandings.
A listing of Incoterms
|Departure||Main Carriage paid by Buyer||Main Carriage paid by Seller||Arrival|
|EXW: EX Works||FCA: Free Carrier||CFR: Cost and Freight||DAT: Delivered at Terminal|
|FAS: Free Alongside Ship||CIF: Cost Insurance Freight||DAP: Delivered at Place|
|FOB: Free on Board||CPT: Carraige Paid to||DDP: Delivered Duty Paid|
|CIP Carriage and Insurance Paid to||
DDU: Delivered Duty Unpaid
Table of Current Incoterms and responibilities