The global economy has given business broader access to world markets. Goods are being sold in more countries in larger quantities and variety. The higher the volume the higher the possibility of misunderstandings and costly disputes when sale contracts are not adequately drafted.
The Incoterms rules facilitate the conduct of global trade. They clearly define the parties’ respective obligations and reduce the risk of legal complications.
These rules take into account the continued spread of customs free zones, the increased use of electronic communications in business transactions, heightened concern about security in movement of goods and changes in transport practices.
The rules are currently 11 and like previous versions make reference to buyers and sellers gender neutral. Incoterm rules explain a set of three letter trade term reflecting business to business practice in contracts of sale of goods. They mainly describe the tasks, costs and risks involved in the delivery of goods from sellers to buyers.
It is highly recommended that the Incoterms are displayed on the contract of sale.
Rules for any mode or modes of transport
EXW / FCA / CPT / CIP / DAT / DAP / DDP /
Rules for sea and inland waterway transport
FAS / FOB / CFR / CIF